9911796707
TMI Blog1994 (8) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... red 16 Four Wheeled Bare Chassis of 2400 mm WB as chassis for vehicles of Heading No. 87.02 by paying duty @ 20% under sub-heading No. 8706.20. On the basis of an audit objection, the Additional Collector issued a notice dated 1-12-1989 stating that the Bare Chassis of 2400 mm WB being principally designed for vehicles of sub-heading 8703.00 were classifiable under sub-heading 8706.30 chargeable @ 35% ad valorem. The appellants were therefore, asked to show cause as to why differential duty amounting to Rs. 1,51,000/- should not be recovered from them under Section 11A read with Rule 9A(5) and penalty should not be imposed on them under Rules 9(2) and 173Q. The appellants denied the allegation in the show cause notice and contended that the demand was time barred. They also stated that they had not suppressed any information and the classification list having been approved by the proper officer could not be revised with retrospective effect. However, by the impugned order, the Additional Collector confirmed the demand for the differential duty and also imposed a penalty of Rs. 10,000/- under Rule 173Q(1) read with Rule 9(2) on the appellants. 2. On behalf of the appellants, Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Ors. v. Madhumilan Synthetics Pvt. Ltd. - 1988 (35) E.L.T. 349 (SC); Swastik Tin Works v. Collector of Central Excise, Kanpur - 1986 (25) E.L.T. 798; Foods, Fats Fertilisers Ltd. v. Collector of Central Excise, Guntur - 1987 (30) E.L.T. 538. 3. On behalf of the respondents Shri K.K. Dutta, Learned JDR stated that the Additional Collector was competent to issue the show cause notice since in terms of the definition in Rule 2(B) of the Central Excise Rules Collector included Additional Collector . He added that in this regard the judgment of the Gujarat High Court quoted by the appellants was not relevant since it pertains to a case in which the show cause notice was issued by the Superintendent. He submitted that the show cause notice sought to set right the incorrect classification of the goods in question which was approved on the basis of wrong declaration on the part of the appellants. He contended that the Additional Collector had correctly invoked the extended period under the proviso to Section 11A since the appellants had failed to furnish the full information in regard to Bare Chassis of 2400 mm W.B. even though they were aware that such chassis were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 on account of being suitable for motor vehicles falling under sub-heading 8703.00 which are principally designed for the transport of persons (other than those of Heading No. 87.02) including station wagons and racing cars. 7. Heading Nos. 87.02, 87.03, 87.04 and 87.06 being relevant to the issues involved in this case are reproduced below :- Heading No. Sub-Heading No. Description of goods. Rate of duty 1 2 3 4 87.02 8702.00 Public transport type passenger motor vehicles 25% 87.03 8703.00 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of Heading No. 87.02), including station wagons and racing cars. 35% 87.04 8704.00 Motor vehicles for the transport of goods 25% .... .... .... ... 87.06 Chassis fitted with engines, for the motor vehicles of Heading Nos. 87.01 to 87.05 8706.10 For the vehicles of Heading No. 87.01 15% 8706.20 For the vehicles of Heading No. 87.02 25% 8706.30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the chassis of 2400 mm W.B. were classifiable under sub- heading 8706.30, we refer to the following extracts from paras 2, 4, 8 and 9 of the impugned order. 2. This classification list was approved by the Department on the basis of the facts made known to the Department by the assessee. It is seen from the Classification List that the assessee had declared their chassis of the description 2400 mm. at various Sr. Nos. of their Classification List and classified them under Chapter Heading 87.04 and 87.02. The party had also declared similar chassis of the same description classifiable under Chapter Heading 87.03. The Department therefore correctly understood it to be that the chassis which are classifiable under 8706.20 and 8706.40 will be used for the manufacture of motor vehicles falling under Chapter Heading 87.02 and 87.04, since the similar type of chassis were capable of being used for motor vehicles falling under Chapter Heading 87.03 without any change in the description or design of the chassis. It was for the assessee to give full description and show in the Classification List that these chassis are not principally designed for motor vehicles falling under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor vehicle falling under Chapter Heading 87.03." 9. It is seen that the onus to establish that the chassis in question were, by virtue of their special design, meant for vehicles of Heading 87.03 was squarely on the Department. The Additional Collector has held that the chassis in question have to be deemed as principally designed for motor vehicles falling under Chapter Heading 8703 and the assessee had not produced any evidence to show that the chassis in question could not be used for the purpose of motor vehicles under Chapter Heading 87.03. The only reason given by him for holding that chassis in question was principally designed for motor vehicles of Heading 8703 is that they were used for vehicles of Heading 8703 and also for those of Headings 8702 and 8703. It is therefore, evident that the Department had failed to discharge the onus to prove on the basis of enquiries from the trade and other relevant material that the chassis of 2400 mm W.B. were meant for vehicles of Heading 87.03 i.e. for vehicles principally designed for the transport of persons (other than those of Heading No. 87.02) including station wagons and racing cars . For these reasons we hold that the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to herein before do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence. On the ratio of the judgment quoted above, we hold that the Additional Collector s order confirming the demand for the extended period beyond si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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