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2001 (6) TMI 459 - AT - Central Excise
Issues:
Application for waiver of pre-deposit of Central Excise duty and penalty - Interpretation of Notification No. 462/86-C.E. for concessional rate of duty on chassis for vehicles - Classification of chassis under Central Excise Tariff - Eligibility criteria for benefit of Notification - Dispute on whether chassis alone qualifies as a motor vehicle under Chapter 87. Analysis: The case involved an application by M/s. Swaraj Mazda Ltd. seeking waiver of pre-deposit of Central Excise duty and penalty. The dispute centered around the interpretation of Notification No. 462/86-C.E., which provided a concessional rate of duty for fuel-efficient light commercial motor vehicles. The company argued that they manufactured chassis for vehicles falling under Chapter 87, fulfilling the conditions of the Notification. They contended that the benefit should be extended to chassis without bodies, citing relevant Explanatory Notes of HSN under Heading 87.06. Additionally, they referred to clarifications by the Ministry of Finance and Industry supporting their interpretation of the Notification. On the other hand, the Departmental Representative opposed the application, arguing that the benefit of the Notification was limited to complete motor vehicles falling under specific headings of the Central Excise Tariff. They contended that chassis alone did not qualify as a motor vehicle under Chapter 87, relying on a previous decision regarding the classification of "drive away chassis." The DR emphasized that the tests for eligibility were based on engine and payload, not requiring the fabrication of a body on the chassis. After considering the submissions, the Tribunal found the issue to be contentious and requiring detailed examination during regular hearings. As the company did not demonstrate financial hardship and the case lacked a strong prima facie basis for a full waiver, the Tribunal directed the company to deposit Rs. 30 lakhs within eight weeks. Upon compliance, the remaining duty amount and penalty would be waived, with recovery stayed during the appeal process. The Tribunal also scheduled the matter for a final hearing, subject to the company's compliance with the deposit order. In conclusion, the judgment highlighted the complexity of the issue regarding the eligibility of chassis for concessional duty rates under the Notification. The decision to require a partial deposit reflected the need for further examination of the legal arguments and factual aspects of the case during the regular hearing, emphasizing the importance of compliance with procedural orders for the advancement of the appeal process.
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