2017 (7) TMI 189 - AT - Central Excise

Benefit of N/N. 162/86 dated 1.3.1986 - chassis - Held that - we are not able to express any opinion whether duty was paid or unpaid on chassis that was cleared and reached the premises of the appellant for FRP body building - Learned authority shall examine the same and also the input came to the premises of the appellant as well as the output that was cleared from its premises to ascertain the levy and test the fulfillment of the requirement of the chapter note and the tariff heading 8702 as well as mandate of the notification - appeal allowed by way of remand.

Issues:
1. Interpretation of chapter note under Central Excise Tariff Act regarding the manufacture of a motor vehicle.
2. Allegations of receiving a complete motor vehicle from the chassis manufacturer.
3. Denial of benefit of Notification No. 162/86 dated 1.3.1986.
4. Examination of evidence regarding the supply of chassis and duty payment.
5. Clubbing of clearances of different appeals.
6. Fair opportunity of hearing and evidence leading in re-adjudication.

Issue 1:
The appellant argued that building a body or structure on a chassis constitutes the manufacture of a motor vehicle as per the chapter note under Central Excise Tariff Heading 8701 to 8705. The appellant claimed that the FRP body built on the chassis falls under the tariff headings 8701, 8702, and 8703, entitling them to the benefits of Notification No. 162/86 dated 1.3.1986. The Tribunal emphasized the need to examine the evidence to determine if the appellant's actions align with the chapter note's requirements.

Issue 2:
The Revenue alleged that the appellant received a complete motor vehicle from the chassis manufacturer without any construction done by the appellant. The Tribunal noted the lack of evidence supporting the Revenue's claim and emphasized the importance of conducting an inquiry to ascertain the truth behind the transaction. The Tribunal directed the adjudicating authority to thoroughly examine the evidence to verify whether the appellant indeed built the FRP body on the chassis.

Issue 3:
The appellant contended that they were wrongly denied the benefit of Notification No. 162/86 dated 1.3.1986 when clearing the FRP body motor vehicle. The Tribunal acknowledged the appellant's argument and directed the adjudicating authority to re-examine the issue and ensure that the appellant receives a fair opportunity for re-adjudication.

Issue 4:
The Tribunal highlighted the necessity for the adjudicating authority to investigate whether duty was paid on the chassis received by the appellant and the inputs used in manufacturing the vehicles. The authority was instructed to scrutinize the evidence regarding the input and output to determine compliance with the chapter note and the tariff heading, emphasizing the importance of a thorough inquiry.

Issue 5:
Regarding the clubbing of clearances of different appeals, the Tribunal stated that if the appellant succeeds in one appeal, there should be no clubbing of clearances from other appeals. The Tribunal directed the adjudicating authority to handle each appeal separately based on its merits and findings.

Issue 6:
The Tribunal ensured that the appellant would have a fair opportunity for hearing, leading evidence, and presenting pleadings during the re-adjudication process. Emphasizing the importance of a thorough inquiry, the Tribunal instructed the adjudicating authority to conduct a detailed examination of the evidence presented by the appellant to reach a just conclusion.

In conclusion, the Tribunal remanded all four appeals to the adjudicating authority for re-adjudication by 31st December 2017, with a focus on conducting a comprehensive inquiry, providing a fair opportunity to the appellant, and avoiding any double taxation issues.

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