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TMI Blog1997 (11) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Tariff Item No. 34-I(2)(ii) to motor vehicles with body 34-I(2)(i)(b) of the first schedule to the Central Excises and Salt Act 1944, after body building amounting to manufacture of motor vehicle. The Collector of Central Excise vide impugned order dropped the proceedings against the respondents. 3. The Revenue filed this appeal on the ground that motor vehicles with chassis manufactured and cleared by M/s. Mahendra and Mahendra falls under Tariff Item 34-I(ii) attracting the excise duty at the rate of 30% and when fitted with body, it becomes motor vehicles with body and therefore is classifiable under Tariff Item 34-I(ii)(ib) of the tariff. The Revenue contended that by fitting Fibre glass reinforced body plastic kit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y before fitment of the vehicles. Therefore the process of fitting the FRP body on the duty paid chassis does not amount to manufacture. He submits that the respondents are carrying out the activity of body building under two different categories. 5. The first category is that the body building is activity on the vehicle which are received by the appellant from Mahindra and Mahindra Ltd. under Rule 56B of the Rules in respect of these vehicles after fitment of the body, vehicles were sent back to the Mahindra and Mahindra Ltd. under Rule 56B of the Central Excise Rules. In the second case the body fitment activity is in respect of other vehicles which are known as NC vehicles. The NC vehicles are fully duty paid when they are brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Tariff Item 34(I)(2)(b) of the First Schedule to the Central Excises and Salt Act, 1944. 9. The Collector of Central Excise in the impugned order observed that the chassis received from the customers on payment of duty were motor vehicles and that remained so even after the fitment on FRP body kit and thus does not constitute manufacture in terms of Section 2(f) of the Central Excise Act, 1944. The Collector of Central Excise in the impugned order contended that parts of FRP body are cleared from the factory on payment of duty. Therefore there was no need to pay further duty on body building. 10. The contention of the Revenue is that motor vehicles with chassis are classifiable under Tariff Item 34-I(ii) and after fitment of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise also noted the fact that from the records it is verified that the appellants are paying duty on the component of FRP body before fitment on the vehicle. It is also not disputed by the Revenue that the chassis fitted with the engine were duty paid. The Hon'ble Punjab & Haryana High Court in the case of Darshan Singh Pavitar Singh v. Union of India and Others reported in 1988 (34) E.L.T. 631 held in Para 10 as under : 10. A person who builds or fabricates a body on a chassis does not, from the notions of a common man, manufacture a motor vehicle. By fitting a body on chassis the petitioners do not cover the same into a motor vehicle. The chassis which are manufactured by a large scale industrial unit under licence from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioners do not proclaim or give out that they are manufacturing or selling motor vehicles. No person who wants to purchase a motor vehicle will go to the petitioners for this purpose, because the people in the transport business do not associate in their minds the body of the motor vehicle with the need which a motor vehicle supplies in real life. There are more than 500 body builders in the small State of Punjab. Such a large number of manufacturers of motor vehicles does not simply exist in the whole world. The people who think to purchase motor vehicles which they have to use for carrying passengers or transporting goods first purchase a chassis from the 4/5 large scale manufacturers. Then they commission the petitioners or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997 (22) RLT 441 (S.C.). 13. In the case, Collector of Customs v. Roplas India Ltd. reported in 1991 (52) E.L.T. 240 the Tribunal after relying upon the decision of Hon'ble Punjab and Haryana High Court in the case of Darshan Singh Pavitar Singh held that converting the duty paid canvas hood jeeps into a Fibre glass reinforced (FRP) jeep build body, no new product emerges. The appeal filed by the revenue against this decision of the Tribunal was dismissed by the Hon'ble Supreme Court reported as 1991 (54) E.L.T. A51. 14. In the present case there is no evidence on record to show that respondents are manufacturing the motor vehicles. 15. Though the above mentioned decisions are in respect of classification of body buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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