2013 (9) TMI 496 - AT - Central Excise

Classification of Goods - Assessee was engaged in the manufacture of bodies on the chassis for public transport passenger motor vehicle, ambulance, motor vehicle for transport of goods and special purpose motor vehicle - During the period the respondent claimed classification of above said goods under sub-heading No. 8702.00, 8704.00 & 8705.00 - Department was of the view the same were to be charged under sub-heading No. 8707.00. - Held that - Bus/Truck body built on chassis supplied by the customers were classifiable under Heading 87.07 of the Central Excise Tariff Act, 1985 - Following C.C.E. v. Ram Body Builders 1997 (9) TMI 103 - SUPREME COURT OF INDIA - even if the excise duty had been short paid on the basis of any approval, acceptance or assessment by the department, the aforesaid short levied shall be recoverable from the relevant date. When any duty of excise had not been levied or paid or had been short-levied or short-paid or erroneously refunded, whether or not such non-levy or nonpayment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice - Order of Commissioner (Appeals) was not sustainable Order set aside Decided in favour of Revenue.

Summary

Issues: Classification of goods for excise duty determination.

In this case, the Appellate Tribunal CESTAT, New Delhi considered an appeal against an order passed by the Commissioner (Appeals) Ludhiana, where a duty demand of Rs. 16,10,411 was set aside. The dispute arose from the classification of bodies on chassis for public transport vehicles by a manufacturing company. The Department contended that the bodies should be classified under sub-heading 8707.00 for excise duty, while the respondent cleared them under sub-headings 8702.00 to 8705.00. The Assistant Commissioner and the Commissioner confirmed the duty demand against the respondent. However, the Commissioner (Appeals) set aside the order-in-original, noting that the respondent had cleared the goods as per approved classification and discharged the duty liability correctly.

The authorized representative of the Department argued that the classification by the Commissioner (Appeals) was not in line with legal precedents, citing judgments of the Punjab & Haryana High Court and the Supreme Court. On the other hand, the respondent's counsel contended that the bodies were classified correctly under sub-heading 87.02, as approved by the Assistant Collector, and the duty was paid accordingly. The respondent relied on circulars and judgments to support their position. The Tribunal analyzed the issue of classification based on previous Supreme Court judgments, including the case of C.C.E. v. Ram Body Builders, which held that bodies built on chassis supplied by customers fall under Heading 87.07 of the Central Excise Tariff Act, 1985.

The Tribunal found that the respondent had cleared the bodies on payment of duty as per the approved classification list, which was never reviewed or revoked. Considering the legal framework and amendments to the Central Excise Act, the Tribunal held that the demand for differential excise duty based on a different classification was not sustainable. The Tribunal emphasized that even if duty had been short-paid based on an approval or assessment, it could be recovered within the specified period. Therefore, the impugned order of the Commissioner (Appeals) was set aside, and the demand confirmed by the order-in-original was upheld. The appeal was disposed of in favor of the Department, concluding the classification issue for excise duty determination.