9911796707
TMI Blog1993 (10) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Tariff Act, 1985, besides other excisable goods. On a surprise visit made by the Asstt. Collector of Central Excise, MOD-III, New Delhi-110015 to the factory premises of the appellant, it was observed that the appellants were clearing the special purpose motor vehicles manufactured by them without payment of Central Excise duty, without their being accounted in the statutory Central Excise records and without issuing Central Excise gate passes. The appellant had filed classification list dated 1-3-1986 as amended declaring that the appropriate duty of Central Excise had already been paid on the equipments used in the manufacture of such vehicles. But, on verification, it was seen that during the month of March, 1986, they had cleared two such special purpose motor vehicles and CED at 25% ad valorem had been paid on the entire equipment vide GPI Nos. 100 101 both dated 31-3-1986. From 1-4-1986 onwards, they had stopped paying CED on the entire equipment issued for the manufacturing of special purpose motor vehicles. The Deptt. took the stand that they were not entitled to the benefit of the exemption Notification No. 162/86-C.E., dated 1-3-1986 for special purpose motor vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the contentions and held that they were not entitled to the benefit of the exemption notification and that they were guilty of not clearing stating above their manufacturing activity and hence held that larger period was invocable. The ld. Collector has held that the activity of fabrication to fit the equipment on the chassis results in the process of manufacture. The ld. Collector has held that the Equipment has not suffered duty under the relevant tariff entry, although on inputs duty had been paid. The two conditions of the notifications not having been satisfied the benefit was thus not available to them. He had held that the party had initially paid on the entire Equipment used by it on such special purpose motor vehicle vide gate passes (G.P. 1) Nos. 100 and 101 both dated 31-3-1986. He has further held that they were aware of the fact that the conditions of Notification No. 162/86, dated 1-3-86 required that the entire Equipment be duty paid before the benefit of Nil rate of duty under the said notification could be availed of. As they knowingly stopped paying duty on the Equipment and had declared in the remarks column of their classification list effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fabrication or mounting or structures or equipment on the chassis shall amount to manufacture of a motor vehicle . Shri Laxmikumaran stated that this Note 4 as above was amended on 24-7-91 and therefore, the said Note 4 would not be attracted in the present case. He referred to the ruling rendered by Punjab Haryana High Court in the case of Darshan Singh Pavitar Singh Others v. Union of India Others as reported in 1988 (34) E.L.T. 631 and argued that the Hon ble High Court has held that motor vehicles will not be classifiable under sub-heading 8705. Therefore, he contended that the classification under 8707 is the correct classification with regard to the present case is concerned. Referring to the ruling rendered in the case of Collector of Central Excise v. Air-conditioning Corpn. Ltd., Calcutta as reported in 1993 (66) E.L.T. 384 (T) = 1987 (9) ETR 435, the ld. Advocate argued that the Tribunal s finding given in this case would apply to the present case also. Para 5 of the order is reproduced herein below : 5. We have given the matter our careful consideration. The ld. representative of the department did not deny the respondents point that in their case the elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges arising from the fitting activity. As the party had not disclosed about the details of payment of duty on the chassis as well as on the equipment, the ld. Collector was justified in invoking larger period as well as on denying the benefit of the notification. 8. Ld. Advocate pointed out that the details of duty payment was quite evident from all the records maintained by the assessee and monthly returns had been submitted also. 9. We have carefully considered the submissions made by both the sides and also perused the various citations referred to before us. Chapter Note 4 to Chapter 87 has been amended on 24-7-91 by which it had been made clear that the activity of body building or fabrication or mounting or structures or equipment on the chassis, shall amount to manufacture of a motor vehicle. However, for the period in question the amended Note 4 would not be applicable. The un-amended Note 4 as it acceded prayer to 24-7-91 referred Heading No. 87.06 shall include chassis, whether or not fitted with a cab . In this case the classification is not disputed. The classification adopted in the present case is 87.05 and sub-heading 8705.00 which reads 87.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elsewhere specified. It is not permissible for the period prior to the introduction of the Finance (No. 2) Bill, 1980 because the specialised equipment was then specified in the explanation below item 34 though for the purpose of exclusion only. For the subsequent period, the goods excluded from the description of other items, no doubt, fell under item 68 but there are other objections to the course adopted by the lower authorities. 4. If the specialised equipments were to be assembled first as such and then mounted on the chassis, one could say that an indentifiable article, not elsewhere specified, had come into being which had a definite utility, value and demand in the market and hence its assessment under item 68, prior to its removal for mounting on the vehicle, would be in order. But in actual fact no identifiable article comes into existence. What exists is only a heap of parts. These are mounted on the vehicle part by part and it is only when the mounting of all the parts is complete that the specified equipment is identifiable but at that stage the whole thing is a vehicle with the equipment fitted on it and not the equipment as such and it is the specified vehicle whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnored for the purpose of levy under item 68, it could not be ignored for the purpose of exemption notifications under the same tariff item. 6. In the result, we hold that no duty was chargeable under item 68 on the specialised equipment which was born as a fixture on the duty paid chassis. Accordingly, we set aside the impugned orders and allow this appeal with consequential relief to the appellants . Even going by this ruling, it cannot be said that what is fitted on the chassis is not equipment. The ld. Collector has attempted to distinguish this judgment, therefore we are not in a position to agree with his finding. The ratio of the ruling rendered in the case of Air Conditioning Corpn. as noted above would also be applicable in the present case. 11. Even on the ground of limitation, we are quite clear that there is no suppression or mis-statement in the present case. We have perused the classification list and we notice that the appellants have given clear description of the vehicle. The show cause notice which has been issued to the appellants from time and again also clearly indicates that the Deptt. was fully aware of the activity being carried on by the appellants. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing cars. 87.04 8704.00 Motor vehicles for the transport of goods. 87.05 8705.00 Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire-fighting vehicles, concrete mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological units). 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 8706.20 - For the vehicles of Heading No. 87.02 8706.30 - For the vehicles of Heading No. 87.03 8706.40 - For the vehicles of Heading No. 87.04 8706.50 - For the vehicles of Heading No. 87.05 87.07 8707.00 Bodies (including cabs), for the motor vehicles of Heading Nos. 87.01 to 87.06 87.08 8708.00 Parts of accessories of the motor vehicles of Heading Nos. 87.01 to 87.06. 14.1 It will thus be seen that from Heading 87.01 to Heading 87.06 different types of motor vehicles have been ..... 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