2015 (10) TMI 128 - AT - Central Excise

Denial of benefit of concessional rate of duty as provided in Notification No. 239/86 - fabrication of bodies / tanks for transportation of LPG Gas - they are not mounting the bodies or the tankers on the chassis supplied by the customer. - Demand of differential duty - Held that - Appellant herein had discharged duty liability on the products which roll out of their premises, under Heading 87.04 as motor vehicles for transport of goods, availing the benefit of exemption Notification No. 239/86-C.E. as amended. It is also undisputed that the appellant is fabricating tanks in their premises and attaches one end to the prime mover while attaching the other end to a non-prime mover - lower authorities are accepting the fact that what rolls out of factory of the appellant is a Motor vehicle for transportation of goods , and have accepted the duty liability so discharged. We find that this is the view which has been expressed by the C.B.E. & C. in Circular No. 2/89, dated 13-1-1989 as is relied upon by the departmental representative. - Appellant is eligible for the benefit of Notification No. 217/86, we find that the impugned order confirming the demands on the appellant is liable to be set aside - impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Classification of fabricated tanks under Chapter Heading 87.04 or 87.07, Benefit of Notification No. 217/86-C.E., Interpretation of Circular No. 2/89, Duty liability on products manufactured.

Analysis:
The appeal concerned the classification of fabricated tanks by the appellant, who manufactures LPG tankers, under Chapter Heading 87.04 or 87.07. The appellant had been discharging duty under Heading 87.04 and availing the benefit of Notification No. 239/86. Revenue authorities contended that the tanks should be classified under Heading 87.07, leading to a demand for differential duty. The appellant argued that their tanks should be classified under Heading 87.04 as motor vehicles for transport of goods, as they are used for transporting LPG gas. The departmental representative argued that the tanks are correctly classifiable under Heading 87.07. The Tribunal considered the submissions and perused the records to resolve the classification issue.

The Tribunal found that the appellant had been discharging duty under Heading 87.04 and that the tanks fabricated by them were attached to a prime mover and a non-prime mover. It was noted that the lower authorities had accepted the duty liability discharged by the appellant under Heading 87.04. The Tribunal referred to Circular No. 2/89, which clarified that tanks fabricated for mounting on chassis in the manufacture of road tankers would be regarded as fabrication of bodies for motor vehicles under Heading 87.07. The Tribunal held that the appellant was eligible for the benefit of Notification No. 217/86-C.E. based on the circular and set aside the demands raised by the Revenue authorities.

The Tribunal disposed of the appeal on the legal issue of classification, without delving into other raised matters. The impugned order confirming the demands was set aside, and the appeal was allowed in favor of the appellant. The judgment was pronounced on 6-1-2015 by the Tribunal in Mumbai, with Shri M.V. Ravindran and P.K. Jain as the Members hearing the case.