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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 ..... hicles 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 kits on the chassis a new article i.e. motor vehicle with defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 to their factory. 6. He submits that the appellants are not makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 body which become motor vehicle with body falling under 34-I(2)(i)(b) of the First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff. The contention of the appellant is that they are not manufacturing the motor vehicles and there is nothing on record to show that the appellant are manufacturing motor vehicles. In the impugned order the Collector of Central 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itive index of the legislative intention when the statute was enacted. Applying these tests, the bodies build/fabricated by the petitioners on the chassis supplied by the customers cannot be terms to be motor vehicles. 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 peop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led the Special Leave Petition against this decision and the same was dismissed by the Hon ble Supreme Court in the case of Collector of Central Excise v. Ram Body Builders reported in 1997 (94) E.L.T. 442 (S.C.) - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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