Motor vehicles - Notification of chassis bodies and vehicles under Rule 191(B) - Export thereof under bond - Clarification regarding - Central Excise - 29/87-CX.6

Motor vehicles - Notification of chassis bodies and vehicles under Rule 191(B) - Export thereof under bond - Clarification regarding Circular No. 29/87-CX.6 Dated 8-7-1987 [From F. No. 209/8/87-CX.6] Subject : Motor vehicles - Notification of chassis bodies and vehicles under Rule 191(B) - Export thereof under bond - Clarification regarding. A reference is invited to Board's letter No. F. 261/56/1/87-CX.8, dated 5-3-1987 on the above subject and to say that certain manufacturers have expressed a number of difficulties in observance of the procedure under Rule 191(B). The point raised by the manufacturers have been examined in the Board's office. The points raised and the decision taken thereon are as under - S. No. Problem Solution /comments 1. The body builders are not willing to be registered under Rule 191(B) because they contend that once they register themselves as the manufacturers of body built vehicles, then total value of the built vehicles will be taken as the value for computation of the aggregate value of clearance for small scale exemption. Small scale exemption is not applicable in respect of motor-vehicles falling under Heading Nos. 87.01 to 87.06. Therefore, whether the body builders build the body on the chassis on job work or build such bodies on the chassis of their own, the question of small scale exemption would not arise. Small scale exemption is available to the manufacturer of bodies only and not to built up vehicles whether on job charges or otherwise. 2. Whether registration for each and every kind of vehicle on which body is built is required or it may be a general registration for all types of built up vehicles. The registration can be applied and granted stating general description of the goods e.g. buses, trucks etc. The registration should be done once for all giving the general description of all types of motor-vehicles to be manufactured and it is not necessary to be done vehicle-wise. 3. The body builders do not have the space to declare a part of their area exclusively for manufacture of goods under Rule 191(B) and this condition be waived. The entire 1-4 premises or such body builders should be treated as manufacturing area for the goods obtained under Rule 191(B). 4. At present value of chassis is not added in the aggregate value of body builders for arriving at their turnover for the purpose of small scale entitlement. It is correct? As already explained at Point No. 1 that manufacturers of built up vehicles are not entitled to small scale exemption. Therefore, the problem is not relevant. 5. What are the bonds and the amounts for which such bonds are required to be executed by the supplier of the chassis, body builders and the exporter of the built up vehicles. As per para 4 of the Notification No. 53/59, dated 9-5-1959, the body builders will be required to enter into a bond in the form annexed to the notification aforesaid to the extent of twice the amount of excise duty payable on the chassis obtained by them during any month for manufacture of built up vehicles. As per para 8A of the notification aforesaid the exporters will be required to execute a bond in the form annexed to the notification for export of built up vehicles. The amount of this bond may be equal to the duty involved on the vehicle less twice the amount of duty involved on the chassis. 6. The body building activities need to be carried out in different places depending upon the process like structural, panelling, painting etc. Vehicle should be allowed to be carried from one place to another without excise formalities. Under 4 A of Rule 191(B), the Collector can permit such movements subject to the conditions and limitations imposed in this regard. 7. Items like glass, aluminium steel sheets, paint etc. should also be included along with the chassis in the notification issued under Rule 191(B) so that these products could also be procured without payment of duty. Whether credit can be availed of the duties paid on inputs used in body building question It is not necessary to include these items under Rule 191 (B) because duty paid on such items can be taken credit of and can be utilised for payment of duty on vehicles cleared for home consumption under Rule 57F(3). Even refunds of such credit is provided under Rule 57F(3) if the same cannot be used on the vehicles cleared for home consumption. You are requested to suitably guide the motor vehicle manufacturers who want to avail of the facility under Rule 191(B) and any other problem which cannot be sorted out at your level may be brought to the notice of the Board.