2000 (7) TMI 602 - AT - Central Excise

Summary

Issues:
1. Interpretation of exemption Notification No. 162/86-C.E. regarding the coverage of chassis for special purpose motor vehicles.
2. Validity of issuing an omnibus show cause notice for demanding duty for a subsequent period.

Interpretation of Exemption Notification:
The central issue in the judgment by the Appellate Tribunal CEGAT, Chennai was the interpretation of whether the chassis for special purpose motor vehicles manufactured by M/s. Ashok Leyland Ltd. are covered by Sl. No. 9 of exemption Notification No. 162/86-C.E., dated 1-3-1986. The appellants argued that the chassis met the conditions specified in the notification for concessional duty rate, emphasizing that specific headings mentioned in the notification were not relevant for extending the benefit. They relied on a previous decision to support their stance. However, the Departmental Representative contended that the chassis were meant for vehicles falling under a different heading not covered by the notification. The Tribunal analyzed the notification's language, emphasizing the term "chassis therefor" and concluded that the chassis in question did not qualify for the exemption under Sl. No. 9 as they were meant for vehicles under a different heading not specified in the notification.

Validity of Show Cause Notice:
Regarding the validity of issuing an omnibus show cause notice for demanding duty for a subsequent period, the appellants argued that a specific notice quantifying the duty amount is required under Section 11A of the Central Excise Act. They cited a Supreme Court decision to support their position. The Departmental Representative contended that a notice had been issued mentioning the duty demand for a specific period, thus fulfilling the legal requirement. The Tribunal agreed with the appellants, emphasizing that a proper show cause notice is mandatory for confirming excise duty demand. They set aside the demand for a specific period, noting that issuing a second demand for the same period was redundant and invalid.

In conclusion, the Appellate Tribunal CEGAT, Chennai ruled that the chassis manufactured by M/s. Ashok Leyland Ltd. were not eligible for the exemption under Sl. No. 9 of the notification. Additionally, they held that a proper show cause notice specifying the duty amount and period is essential for confirming excise duty demand, emphasizing the legal requirement under Section 11A of the Central Excise Act. The judgment highlights the importance of strict adherence to legal procedures and the need for clarity in interpreting exemption notifications for excise duty purposes.