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TMI Blog2010 (4) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Respondent. [Order per : M.V. Ravindran, Member (J)]. - This application for condonation of delay and all the appeals being inter-connected and in respect of the very same assessee, we take up all these matters for disposal by a common order. 2. Application for condonation of delay No. E/COD/32/10 is filed by the Revenue in appeal No. E/925/09. After hearing both sides, we find that the delay in filing the appeal by the Revenue before the Tribunal is only 11 days. Since the delay is marginal, we condone the delay, admit the appeal and take up the same for disposal. 3. Appeal No. E/520/09 and E/925/09 are directed against the Order-in-Original No. 16/2009 dated 30-4-2009. For brevity sake, appeal No. E/520/09 is filed by the assessee challenging the findings of the Commissioner and appeal No. E/925/09 is filed by the Revenue for non-imposition of penalty. Appeal No. E/715/09 is filed by the assessee against Order-in-appeal No. 25/2009(H-IV) CE date 26-6-2009. 4. The relevant facts that arise for consideration are that appellants are manufacturers of Butyl rubber inner tubes falling under Chapter sub-heading 40.13 of the Central Excise Tariff and they clear fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Duty of Rs. 77,95,800/- on the clearances made by the appellants during the period from 1-7-2007 to 31-5-2008 being the differential duty between the duty liable to be paid on the basis of MRP under Section 4A of the Act, and that paid on their transaction value under Section 4 of the Act. The issue arose with issue of notification No. 11/2006-C.E. (N.T.), dated 29-5-2006 amending Notification No. 2/2006-C.E. (N.T.), dated. 1-3-2006 by inserting serial No. 97 and bringing parts, components and assemblies of automobiles under the preview of MRP based valuation. The contention of the department is that as the inner tubes manufactured by the appellants are used in the automobiles they are to be treated as parts of automobiles and are therefore covered under this notification. The department referred a case law M/s. Perfect Electric Concern Pvt. Ltd v. CCE, Patna [1997 (93) E.L.T. 622 (Tri.)] wherein the Hon'ble Bench mentioned a passing remark stating that the automobile tubes though not classifiable under chapter 87 are nevertheless parts of automobiles. It is pertinent to mention that this case is not with regards to discussion on classification or valuation of inner tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority vide the impugned order confirmed the demand basing on the circular which was not put to the notice of the appellant. He passed the impugned order with discussions and findings in a single page wherein he has categorically mentioned that though the assesses has referred to a number of decision that the inner tubes cannot be classified as parts of automobiles, yet he finds that the issues has clarified by the board in the letter F. No. 167/38/2008-CX-4 dated 16-12-2008 (Para 46 of the impugned order). It is therefore clear that the impugned order has been passed contrary to the findings of the adjudicating authority. Appeal No. E/715/2009 (f) The Order-In-Original was passed without issue of notice and without being heard. When the same was appealed, the Commissioner though notice should have been issued in this case, as there are no merits in the case of appellants, the same is dismissed. Interpretation of the Notification Heading is wrong (g) The issue stated with the mentioning of term 'any heading' in Column No. 2 against Sl. No. 97 covering 'parts, components and assemblies of automobiles'. The column heading is mentioned as "Chapter or heading or sub-heading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eadings in this system. (k) Section XVII of the First Schedule covers automobiles and parts of automobiles in the Tariff. Chapter 87 covers 'Vehicles other than railway, tramway rolling stock parts and accessories thereof. Heading Nos. 8701 to 8705 and from 8710 to 8713 cover different types of automobiles and Headings 8708 and 8714 cover parts and accessories of automobiles. (l) This chapter has specific sub-headings for some of the parts and accessories of vehicles and there is a residuary item 'others' where under all other parts and accessories will fall. Therefore it is incorrect to say that the parts and accessories can fall under any chapter of the Tariff and this is against the principle of Harmonized System of Nomenclature. Inconsistencies in Board Circular (m) CBEC Circular F. No. 167/38/2008-CX-4, dated 16-12-2008 has been issued giving instructions to follow uniform practice of assessment of parts of automobiles. This circular is against the settled legal position and against the stand taken by the Board itself. It has many contradictions in itself. (n) This Circular did not discuss about assessment of accessories of automobiles. The Circular also gives definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial or in heading 8484) or other articles of vulcanized rubber. (q) The inner tubes manufactured by the appellant are classified under Section 40 as per their constituent material i.e. rubber. Therefore they do not fall under the literal/legal expression of "parts or accessories" as per Note 2 of Chapter XVII. (r) Note 3 of the Section stipulates that references in Chapters 86 to 88 to "parts or accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of these chapters. Inner tubes are at best accessories of motor vehicles (s) "The term 'Accessory' has been defined in McGraw Hill Dictionary of Scientific and Technical Terms as follows : "Accessory (Mech Eng): A part, sub-assembly, or assembly that contributes to the effectiveness of a piece of equipment without changing its basic function; may be used for testing, adjusting, calibrating, recording or other purposes." A 'part' has been defined as follows : "Part (Eng): An element of a sub-assembly, not normally useful by itself and not amenable to further disassembly for maintenance purposes." (t) The inner tubes are not used on motor vehicles as they are as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 4A of the Central Excise Act, 1944. He would submit that the Board's Circular dated 16-12-2008 has clearly clarified the situation and hence the demand of the duty as confirmed by the lower authorities is correct. As regards the appeal filed the Department, it is his submission that the Revenue has preferred the appeal for non-imposition of the penalty on the appellant despite there being a finding that the appellant has not discharged the duty liability as per the notification. He would submit that the appellant should be penalized for such an act. 7. We have considered the submissions made at length by both sides and perused the records. The issue involved in this case is regarding the applicability of provisions of Section 4A of the Central Excise Act, 1944 to the products manufactured and cleared by the appellant. The provisions of Section 4A are made applicable to the appellant's product vide Notification No. 11/2006-C.E. (N.T.), dated 29-5-2006. 8. It is undisputed that the appellant is manufacturing "inner tubes" for tyres of automobiles. It is also undisputed that the classification of the said product manufactured by the appellant is under Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inner tubes manufactured by the appellants are only cleared to automobile manufacturers. These inner tubes are used by the automobiles companies for the purpose of using in the tyres and inflate them with air to be used with the tyres. Undoubtedly these products would fall under the categories of 'Parts, components and assemblies of automobiles'. The ld. Counsel's argument that this would be considered as accessories will not carry the case of the appellant any further as the tyre of a car cannot function without inner tube. Further the arguments of the ld. Counsel that the Central Excise Tariff Act does not have definition of automobiles. He would submit that this anomaly has been rectified by the Department by issuing a Notification No. 9/2010 wherein they have very clearly mentioned as any heading excluding the vehicles falling under specific chapter. We find that this entry in Notification No. 9/2010 will have prospective effect only. The issue in the hand would be squarely covered by the entry made in the Notification. We also find that the ld. Commissioner has correctly relied upon clarification issued by the Board on the very said notification. In view of this, we concu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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