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TMI Blog2011 (7) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... s sending motor vehicle chassis and motor vehicle chassis fitted with cabin falling under sub heading No. 8706.42 for the purpose of fabrication and mounting of body to M/s. Bhagirath Coach and Metal Fabricators Pvt. Ltd. (herein after referred to as respondent 2). b) The motor vehicle chassis falling under sub heading No. 8706.29 / 8706.42 attract BED of 16% of ad valoram + Rs.10,000/- per chassis. The specific component of basic excise duty of Rs.10,000/- per chassis was imposed with effect from 1.3.2003. However, the body built vehicle was subject to BED of 16% only without the specific BED component of Rs.10,000/-. c) Prior to 1.3.2003, respondent 1 used to clear the motor vehicle chassis on payment of Central Excise duty to respondent No.2 for fabricating motor vehicle body on such duty paid chassis. Without availing cenvat credit of duty paid on the chassis, the respondent 2 was paying Central Excise duty on the value of body by raising invoice only for the value of body so built by them as per the Notification No. 6/2002 CE dated 1.3.2003 read with condition No. 53. d) Consequent to introduction of specific component of basic excise duty of Rs.10,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Such assembled chassis is clearly a final product and stock in trade as far as the respondent 1 is concerned. The chassis cleared by the respondent cannot be considered either as an input or partially processed input as far as the respondent 1 is concerned. The said chassis can be considered as an input only in the hands of body builders. 4.3 Rule 4(5)(a) of the Cenvat Credit Rules only permits clearance of any inputs and not combination of inputs especially after the same have been assembled into a recognised final product. 4.4 As a final product in the hands of respondent 1, the same should have been cleared on payment of duty as provided under Rule 4 of Central Excise Rules 2002 and after preparing excise invoices. Therefore, such clearances are in violation of the provisions of Central Excise Rules. Further, the respondents were aware that the chassis was a final product and still followed dubious methods to evade payment of specific component of BED. 4.5 Learned DR was asked a specific query as to why only specific component of BED stand demanded without the ad valoram component when the department was of the view that clearance of chassis under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Advocate submits that the respondent 1 cleared chassis and other parts and components on which credit has been taken in terms of Rule 4 (5)( a) of the Cenvat Credit Rules. Respondent 1 also gave undertaking to the Asstt. Commissioner in-charge of the second respondent, undertaking to pay the duty involved on the final product and as a result the respondent 2 was permitted to avail the benefit of notification No. 214/86 CE dated 15.4.1986 and return the body built vehicle without payment of duty to respondent 1. . 5.4 The procedure adopted in any case is not against the interest of revenue, learned Advocate submits. At chassis stage the basic excise duty leviable is 16% ad valoram + Rs. 10,000/- specific per chassis. On body built vehicle the Basic duty payable is only 16% which is on a higher value resulting in payment of higher amount of duty. He illustrated the same with the following examples, (a) Chassis No. 17FC 30996221 with a value of Rs. 3,60,525/- was cleared on 13.9.2003 and the duty payable according to the Department is Rs. 57,684/- and the body built vehicle was received back and sold on 15.9.2003 for a value of Rs. 4,87,116/- on payment of basic du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assis No.1. Undoubtedly, the duty at 16% would have been paid only at the lower value applicable to chassis. The department has taken 16% duty paid at the enhanced value of the body built vehicle towards the duty at 16% payable at the time of clearance of chassis by respondent 1 for the purpose of body building. If the duty paid later on the vehicle after body was built could be taken as duty payable at time of clearance in respect of BED ad valoram, there is no reason why the same treatment cannot be extended for the duty payable as specific component. From the examples given by the learned Advocate, it is seen that the duty paid after body building at 16% is clearly higher than the Basic duty including specific component of Rs.10,000/- per chassis payable at the time of clearance of chassis. Learned Advocate submits that this is the position in respect of all the cases. 6.2 We find that no objection has been raised in respect of certain parts and components sent by respondent 1 to respondent 2 under Rule 4(5)(a) of the Cenvat Credit Rules for the purpose of body building. The body building is necessarily on the chassis which has been sent. 6.3 To a specific query as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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