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TMI Blog2015 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of judicial scrutiny in taxation matter is to reach to the truth of the matter and in reaching to the truth, incorrect interpretation taken by some authority cannot supersede the judicial decision on the issue. We also agree with the Commissioner (AR) that even the circular of 2008 was not binding circular and it would be seen from the circular that it is only suggestive and is not a conclusive or directive circular. We also note that large number of such parts, components and assemblies are interchangeable in different road vehicles including construction equipment vehicles. Thus wider meaning to the term automobile is to be given. Scope of the term Manufacture - deemed manufacture - Held that:- the argument that putting a tag is not labelling or there is absence of container, etc., in our view, will defeat the purpose of definition given in Section 2(f)(iii). In view of the said position, we hold that even putting the tag on the unpacked parts will amount to manufacture and will be covered under Section 2(f)(iii). For determining whether a particular process amounts to manufacture it is not relevant whether the inputs are locally produced or imported. What is imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of Revenue but on limitation, benefit was extended to appellant to which implied dropping of almost entire liability except on seized goods. Against the said order of the Tribunal, both, the appellants as also Revenue filed appeals before the hon'ble High Court of Bombay at Nagpur Bench and the hon'ble High Court vide order dated February 13, 2015 in Central Excise Appeal No. 32 of 2014 filed by the Commissioner of Central Excise, Nagpur II and Central Excise Appeal No. 3 of 2015 filed by M/s. Larsen Toubro Ltd. passed the following order: Both these cross-appeals are filed by the Revenue as well as the Assessee being aggrieved by the order of the CESTAT dated 23.07.2014 The appeal before the CESTAT was filed by assessee challenging the order passed by the Commissioner of Central Excise, Nagpur thereby confirming the order passed by the Assessing Authority and demanding dues to the tune of ₹ 1,61,61,27,251/- ₹ 6,37,544/- along with interest. The learned CESTAT cursorily observed in para 3.2 that the extended period of limitation is not invokable and, therefore, the goods are not liable for confiscation. The learned CESTAT also observed that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the earlier mentioned six items, two items, trucks and dumpers are classifiable under Chapter 87 while the remaining four are under Chapter 84. The second difference that we find in the case of JCB, all the parts were proposed to be valued under Section 4A of the Central Excise Act. In the present case, Revenue has taken the view that activities undertaken by the appellant are covered under Section 2(f)(iii) read with Third Schedule to the Central Excise Act, and hence amounts to manufacture. Further, in respect of packed parts, components and assemblies the same are required to be valued under Section 4A while in respect of unpacked parts, components and assemblies value is required to be determined under Section 4. The third important difference in the present case is that while in the case of JCB Ltd. the demands were for the period prior to February/April 2010 and the appellants in that case were paying duty under Section 4A after February/April 2010, in the present case, demand is even for the period February/April 2010 April 2011, the appellants even after the removal of the word automobiles in February/April 2010 and specifying particular headings and Chapters both in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the same which were raised in the case of JCB India Ltd. (supra). One of the Members deciding the present case was also part of the Division Bench which had decided the case of JCB India Ltd. Shri K.M. Mondal, Special Consultant had argued for Revenue in the case of JCB India Ltd. However, in the present appeals Shri Hitesh Shah, Commissioner (AR) is representing the Revenue. Shri Hitesh Shah has provided additional material in support of Revenues contention. 7. Since main issue starts with the scope of the term automobile various case laws and Boards circular are the ones which were discussed at great length in the case of JCB India Ltd., we would be reproducing many parts from the Tribunals order in the case of JCB India Ltd. 8. The learned Senior counsel reiterated various submissions made by him during the hearing of JCB India Ltd. (supra). The said submissions are not being repeated for sake of brevity. Learned senior counsel also submitted detailed written submissions on 8th September, 9th September and after the hearing was over. The main contention in brief are: 8.1. The appellants have not subjected all the parts of hydraulic excavators, dozer, wheel loaders, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s construction equipment vehicle which in turn is defined as: construction equipment vehicle means rubber tyred, (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor roller, dumper, motor-grader, mobile crane, dozer, fork lift truck, self-loading concrete mixer or any other construction equipment vehicle or combination thereof designed for off-highway operation in mining, industrial undertaking, irrigation and general construction but modified and manufactured with on or off or on and off highway capabilities. The learned AR further submitted that the same definition appears in the IS 14272 (2011): Automotive vehicles Types Terminology published by the Bureau of Indian Standards. The above Standards indicate that all self propelled vehicles, whatever may be their use, are considered as automotive vehicles or automobiles. Vehicles with steel drum wheels i.e. crawlers or track laying or chain mounted vehicles are also considered as automotive vehicles. Hydraulic excavators which are self propelled, whether wheel mounted or crawlers, are considered as automotive vehicles. Vehicles designed for off highwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functional machinery is mounted on the automobile. Hence, goods are automobiles. 9.2. The learned AR further submitted that the all the six items undoubtedly indicates that these are self propelled vehicles which works either on rubber or pneumatic wheels or steel drum wheels. Hydraulic excavators are available with rubber/pneumatic tyres or with steel drum wheels. A perusal of the literature of each of the items would indicate that they have automobile aspects as also the machinery aspect. Automobile aspects are like independent power, speed, operating weight specification, etc. 9.3. Learned AR further submitted that all the items are automobiles for the purpose of Section 2 of the Air (Prevention and Control of Pollution) Act, 1981, which defines the term automobile as: 2(e)? automobile means any vehicle powered either by internal combustion engine or by any method of generating power to drive such vehicle by burning fuel; 9.4. It is further submitted by the learned AR that this Tribunal in the case of Sociedade de Formento Ors. vs. Commissioner of Customs 1987 (29) ELT 620 (T), considered crawler type vehicles and held them to be conveyances. It is his submission t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no restriction can be put on the general meaning of any entry in a taxing statute as has been held in the following cases: Commissioner of Sales Tax vs. Agarwal Co. 1983 (12) ELT 116 (Bom.); Indian Tool Manufacturers vs. Collector of Central Excise, Poona 1984 (18) ELT 527 (Tribunal); Indian Tool Manufacturers vs. ACCE 1994 (74) ELT 12 (SC); Standard Pencils (P) Ltd. vs. Collector of Central Excise, Madras 2002 (145) ELT 278 (SC); Swaraj Mazda Ltd. vs. Commissioner of Central Excise, Chandigarh II 2010 (257) ELT 264 (Tri.-Del.); The Western India Plywoods Ltd. vs. Commissioner of Central Excise 1985 (19) ELT 590 (Tribunal) 10. The learned AR further submitted that the goods cleared by the appellants have been subjected to the process amounting to manufacture as even in the case of unpacked goods it is not disputed that they were putting the labels and the definition under Section 2(f)(iii) very clearly mentions that labelling will amount to manufacture. It was submitted that the word label is not with reference to the container. In any case, as admitted by the appellant, these goods are not being packed because of their size. In such a situation even putti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct marketable to the consumer, as manufacture. It was also submitted that the term container has been considered in the following cases: G. Claridge Co. vs. Commissioner of Central Excise 1991 (52) ELT 341 (SC); Parksons Printers vs. Commissioner of Central Excise 1996 (86) ELT 603 (T) It was submitted that when the term container is found independently, in a broad sense it indicates a receptacle which contains and in a narrow sense a receptacle in which articles are covered or enclosed. Hence, the term container cannot be synonymous with a unit packing or a package or a closed receptacle. It was submitted that the goods are received by the appellant in cartons, wooden and tin cases and are subject to, in some cases, unpacking and repacking and labeling and in some cases the goods were unpacked and then put in pre-printed pouches. In some cases, goods are labelled whether with a tag or sticker or label containing relevant information which is important to the appellant and its buyer and to the process of sale and consumption of such goods. It was his submission that in view of this position the process undertaken by the appellant helps in marketing of the goods also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt and the binding effect in terms of Article 141 of the Constitution. 12. As far as the entitlement to CENVAT credit is concerned, the learned AR submitted that the appellants have not submitted any document either before the adjudicating authority or before this Tribunal and hence there is no question of remand for deciding liability of CENVAT credit in view of judgment of Hon'ble Supreme Court in the case of Kores India Ltd. vs. Commissioner of Central Excise 2004 (174) ELT 7 (SC) which is re-affirmed in Kores India Ltd. vs. Commissioner 2015 (318) ELT A252 (SC). 12.1. As far as the plea of benefit of cum-duty is concerned, it is submitted that benefit of cumduty cannot be extended in the present case in view of the following case laws: Amrit Agro Industries Ltd. vs. CCE, Ghaziabad 2007 (210) ELT 183 (SC) Ahmednagar Rolling Mills Pvt. Ltd. vs. CCE, Aurangabad 2014 (300) ELT 119 (Tri.-Mumbai) 12.2. The learned AR submitted that as far as extended period of limitation is concerned, it cannot be said that the appellant were not aware of the provisions of Section 4A or the parts are not covered under Section 4A. In fact they themselves were importing parts of sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le coupling, bracket, oil cooler, fan for ROC, radiator, radiator cap, switch, wiring harness, bearing, pipe, swing machinery case, shaft, cylinder, collar, seal kit stick cylinder, gear assy, hyd tank, fuel tank assy (osp), etc. Most of these items are used in car, trucks and other vehicles. Car, trucks, etc. are even according to appellant are automobiles. Description of parts components and assemblies clearly indicates these are parts, components and assemblies of automobiles. 14. Relevant sections, notifications and circulars are as under: 14.1. Section 2(f)(iii) of the Central Excise Act, 1944 reads as under:- (f) manufacture includes any process,- i) (ii) (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 2/2006-Central Excise (N.T.), dated the 1st March, 2006, G.S.R. 113(E), dated the 1st March, 2006, namely:- In the said notification, in the TABLE, after S. No. 96 and the entries relating thereto, the following shall be added, namely:- (1) (2) (3) (4) 97 Any heading Parts, components and assemblies of automobiles 33.5% 98 3808 30 40 Plant-growth regulator 30% 99 9603 21 00 Toothbrush 28.5%. 2. This notification shall come into force on the 1st day of June, 2006. 14.5. On 24th December, 2008, above Notification was replaced by Notification No. 49/2008-C.E. (N.T.) However, there was no change in the description of entry with which we are concerned except that abatement percentage was reduced from 33.5% to 30%, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 2011 amended/inserted above mentioned entries with retrospective effect i.e. the day where Notification No. 9/2010-C.E. (N.T.) and 19/2010-C.E.(N.T.) were issued. 14.10. It also appears that in the Finance Act, 2011 instead of third Schedule to the Central Excise Act, 1944, Central Excise Tariff Act, 1985 was inadvertently mentioned and the same was corrected by an amendment vide Finance Act, 2012. 14.11. The following three circulars of the Board are relevant. (i) Circular No. 262/15/86-CX.8 dated 14.07.1987 (ii) Circular No. 22/90-CX.4 dated 11.07.1990 (iii) Circular No. 167/38/2008-CX.4 dated 16.12.2008 14.12. The first Circular is regarding leviability of cess under Automobile Cess Rules, 1984 on Earthmoving machinery. The said Circular is as under:- Automobiles - Cess not chargeable on earthmoving machinery F. No. 262/15/86-CX.8, dated 14/07/1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject: Cess on automobiles - Clarification Regarding. A doubt has arisen whether Earthmoving machinery is leviable to cess under the Automobile Cess Rules, 1984. 2. The matter has been examined in consultation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raulic excavators was not but automobile as automobiles are conveyances for transportation of passengers, and goods on road and therefore decided not to extend the benefit of Notification No. 61/86-C.E. dated 10/12/1981 to driver seats of hydraulic excavators. However, this very circular was matter for decision before this Tribunal in the case of Krishna Fabricators P. Ltd. (supra) and after detailed discussion and based upon various judgments of the Hon'ble Supreme Court and Madras High Court, this Tribunal came to the conclusion that Automobile includes tractors and earth moving equipments. Thus Tribunal took a view contrary to the said Circular. Revenue has not challenged the said judgment of this Tribunal and therefore the Circular dated 11/07/1990 is no more valid and this circular does not represent the correct legal position. In our considered view any reliance on the said circular would be contrary to judicial verdict. However, perhaps, unaware of the said judgment, Board issued Circular on 16/12/2008. 14.15. Boards Circular No. 167/38/2008-CX.4 dated 16/12/2008 is as under:- Automobile parts, components and assemblies - Scope, for MRP based valuation F. No. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether parts classified in Chapter 87 shall only be covered under the said entry or all parts irrespective of their classification should be covered. 3.2 The issue has been examined. The said entry provides that parts, components and assemblies falling in any heading in the Tariff are covered. Therefore, it is logical that all parts, components and assemblies, irrespective of their classification shall be covered. It is also important to note that there is no specific entry for components or assemblies of automobiles in the Tariff, therefore, this also supports the view that all goods which are commonly known and sold in the trade as parts, components and assemblies are covered by said entry, irrespective of their clarification in the Tariff. Hence, the term parts, components and assemblies of automobiles includes items like batteries, brake assembly, tyres, tubes and flaps, IC engines, ball bearing etc. 4. The contents of this clarification may be brought to the notice of trade and industry. 15. In the case of JCB India Ltd., after considering earlier mentioned legal provisions, circulars and case laws and arguments of both sides (which were repeated in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the appellants that the excavators and road rollers are suitable for use on roads. However, the contention put forth now is that they are intended for use in the enclosed premises. Merely because a motor vehicle is put to a specific use such as being confined to an enclosed premises, will not render the same to be a different kind of vehicle. Hence, in our view, the High Court has correctly decided the matter and the impugned order does not call for any interference by us. However, the question whether any motor vehicle has entered into a local area to attract tax under the Entry Tax Act or any concession given under the local Sales Tax Act will have to be dealt with in the course of assessment arising under the Entry Tax Act. Appeals are accordingly dismissed. 17.5 We note that Hon'ble Supreme court in the case of M/s. Central Coal Fields Ltd. (supra), while considering the issue about taxation of Dumper and Rocker under motor vehicle Act, 1988 has observed as under:- 7. Learned Counsel for the appellants in these appeals have not challenged the view of the High Court regarding vires of the impugned Act before us or to its retrospectively but have addressed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmission to run on public roads at a speed not exceeding 10 kms. Per hour and on bridges and culverts at a speed not exceeding 8 kms. Per hour. From this it is suggested that they have a minimum weight and safe laden weight fixed on some principles. Pictures of various types of Dumpers have also been sent to us which indicate prominently one factor that these Dumpers run on tyres, in marked contrast to chain plates like cater pillars or military tanks. By the use of rubber tyres, it is evident that they have been adapted for use on roads, which means they are suitable for being used on public roads. The mere fact that they are required at places to run at a particular speed is not to detract from the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles make it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the Dumpers or Rockers as suggested are heavy and cannot move on the roads without damaging them is not to say that they are not suitable for use on roads. The word adapted' in the provision was read as suitable in Bolani Ores case by interpretation on the strengt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court judgment in the case of Goodyear India Ltd. Vs. U.O.I. reported in 1997 (92) ELT 14 (S.C.). We have gone through the said judgment. The issue before the Hon'ble Supreme Court was whether tyres of the size 1800 mn and above meant for fitment to heavy moving vehicles such as dumpers and earthmovers mainly used at construction site is to be classified as tyres for motor vehicle . At the relevant time tyres were classified under three categories viz. for motor vehicles, for cycles all other tyres. Further, Item No. 34 defined motor vehicles. It is in this context that Hon'ble Supreme Court has held that such tyres cannot be considered tyres of motor vehicles. In present case issue is whether parts, components and assemblies of Loader, Backhoe Loader Road Roller can be considered as Parts, components and assemblies of automobiles. In our view, Hon'ble Supreme Court judgment does not help the cause of Respondents. 17.9 Another judgment quoted is that of Hon'ble Rajasthan High Court, in the case of Commissioner of Income Tax Vs. Gotan Lime Stone Khanij Udyog reported in 2007(173)-GJX-0443-RAJ. Here the issue was road transport vehicles were excluded from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to seats of tractors and earthmoving machinery, to be considered as seats of automobile or not in the case of Krishna Fabricators P. Ltd.(supra). In the said case, this tribunal observed:- 38. The expression automobile' has a wider connotation - one which runs by its own motor - internal combustion engine. 39. Motor vehicle has been defined as a motor driven vehicle for use on roads and highways. 40. In both the exemption Notifications No. 91/68-C.E. and No. 61/86- C.E., the expression automobiles has been used along with the railway carriages and the air-crafts . Railway carriages' move on fixed rails, and the aircrafts' fly in the air and run on the runways. Taken all the three - automobiles, railway carriages and aircrafts - together, they cover a very wide area. 41. The word automobile' was first used in France in the late 1880s. It comes from the Greek word Auto meaning self, and the French word Mobile meaning moving. Literally, it means a self-propelled vehicle. 42. While its dictionary meaning is motor-car', the way the expression automobile has been used in the Notification along with railway carriages and the aircrafts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Any heading is used, we consider that Parts, components, and assemblies of Loader, Backhoe Loader and Road Roller are covered by the said entry/expression. 18.6 We also find that this conclusion of ours also get support from the changes made in February/April 2010. In order to avoid the terminology automobile, (being not defined in Act/Tariff) specific heading of the Central Excise Tariff were introduced in the Notification No. 49/2008-C.E. (NT) in February 2010 vide Notification No. 9/2010-C.E. (N.T.). Apparently this was done in haste and Government had to further amend the amendment made in February, 2010 within two months to specifically include headings relating to earth moving machinery. Not only this, corresponding amendment in Third Schedule was forgotten and the next year retrospectively amendment had to be brought with effect from 27.02.2010/29.04.2010. Thus a holistic look of these amendments, only supports that Parts, components and assemblies of automobiles included that of Loader, Backhoe Loader Road Roller and were covered from June, 2006 onwards. 18.7 One of the contention of Ld. Senior Advocate is that Board's Circular dated 16.12.2008 stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary to clarify Para 9 of Dhiren Chemical's case. One of us (Variava, J.) was a party to the Judgment of the Dhiren Chemical's case and knows what was the intention in incorporating Para 9. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all Courts/Tribunals and Bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical's case because of circulars of the Board in many cases the Department had granted benefits of exemption Notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical's case, the Revenue was likely to reopen cases. Thus Para 9 was incorporated to ensure that cases where benefits of exemption Notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where Revenue/Department had already contended that the benefit of an exemption Notification was not available, and the matter was sub-judice before a Court or a Tribunal, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory mandate? Even after the reason and rationale underlying the circular disappears, is it obligatory to continue to follow the circular? These are the questions which puzzle me and these are the conclusions which follow if the observations of this Court in the two cases of Dhiren Chemicals Industries are taken to their logical conclusion. 26. I am of the view that in a situation like this, the Customs authority should obey the constitutional mandate emanating from Article 141 read with Article 144 rather than adhering to the letter of a statutory provision like Section 151A of the Customs Act. The Customs authority should act subservient to the decision of the highest constitutional Court and not to the circular of the Board which is denuded of its rationale and substratum under the impact of the authoritative pronouncement of the highest Court. Alternatively, Section 151A has to be suitably read down so that the circulars issued would not come into conflict with the decision of this Court which the Customs authorities are under a Constitutional obligation to follow. 18.10 In view of above case laws, we are of the view that even if the Circular dated 16.12.2008 is with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs move on the roads like any other vehicle though the purpose of these equipments may be to move material from one point to other or on a vehicle, etc. Keeping in view the discussion relating to Loaders, Backhoe Loaders in the case of JCB India Ltd. (supra), in our considered opinion, these items will also be covered by the term automobile. 16.4. The remaining items are dozers and hydraulic excavators. These two items, according to learned counsel for the appellant, are crawler type or chain plates i.e., there is a steel drum and below the steel drum there is a chain on which these items move. Learned counsels submission is that since tyres are not used in these two equipments these cannot be considered as automobiles. We would like to mention that in the case of JCB India Ltd. (supra), equipments which have on a steel drum wheel and move on chain system or crawler, were not being discussed and therefore, the discussion was confined to the tyred wheel mounted equipment. 16.5. We also note that the learned AR has also provided very valuable inputs during argument which were not available while deciding the matter in the case of JCB India Ltd. The learned Commissioner (AR) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Tribunals judgment in the case of JCB India Ltd. (supra), wherein, it is mentioned that: Hydraulic excavators having their own track are not considered as motor vehicle or automobile. We find that this sentence is being taken out of context by the learned senior counsel. The said sentence was written while trying to discuss the Boards Circular dated 06/12/2008 as the said circular though talked about hydraulic excavator, but did not clearly spelt out what type of hydraulic excavator they are talking about. There was no question of this Tribunal holding that hydraulic excavator is not motor vehicles/automobile. This would be contrary to the judgment of the hon'ble Supreme Court in the case of Bose Abraham vs. State of Kerala dated 01/02/2001 (Civil Appeal No. 2779 of 1998 Ors.) [2001] 121 STC 614 (SC). 18. We find that the learned senior counsel for the appellant in their written submissions after the hearing, has submitted that the said details relating to AIS/53 or BIS 14172 (2011) should not be taken into account as these are not forming part of the show cause notice and the Commissioner (AR) has not followed the CESTAT procedure to produce the same. We do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the circulars. We also note that the purpose of judicial scrutiny in taxation matter is to reach to the truth of the matter and in reaching to the truth, incorrect interpretation taken by some authority cannot supersede the judicial decision on the issue. We also agree with the Commissioner (AR) that even the circular of 2008 was not binding circular and it would be seen from the circular that it is only suggestive and is not a conclusive or directive circular. 22. We also note from the list of parts submitted during the hearing, the parts are of a type used in various automobile items and keeping in view the fact that the term used in the Notification and Third Schedule is parts, components and assemblies of automobiles, falling under any Chapter (thus not restricted to few parts) which is a very wide term, we are of the view, even the term automobile has to be given a wider meaning. We also note that large number of such parts, components and assemblies are interchangeable in different road vehicles including construction equipment vehicles. Thus wider meaning to the term automobile is to be given. 23. The next issue is relating to the scope of Section 2(f)(iii), learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se are not put in a container is immaterial. 24. We also note that purpose of Section 2(f)(iii) is to capture value addition and tax the same in respect of items when the retail selling price is very high compared to the ex-factory price. This is particularly true in the case of spare parts of automobile. Spare parts of automobiles are generally priced very high compared to the ex-factory values of such parts. In order to capture the value addition in such situation and for similar items, Section 2(f)(iii) was introduced and the purpose of the said Section will be achieved if activity of putting a tag or label which will identify that part number of the equipment is considered as manufacture. 25. The learned senior counsel has submitted that since the definition of manufacture under Section 2(f)(iii) is a deeming provision, strict interpretation of the same should be given. While we do agree that there should be strict interpretation, however, interpretation should not be so strict so as to defeat the very purpose of deeming provision. In this context we refer to the decision of the hon'ble Supreme Court in the case of Industrial Supplies Pvt. Ltd. vs. Union of India Ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in respect of the parts of scania trucks and other parts, which were imported, provisions of Section 2(f)(iii) will not be applicable as the said section would be applicable only for the excisable goods. Learned Commissioner (AR), on the other hand, submitted that the term excisable goods is used under Section 2(d). In third schedule to the Central Excise Act, the term used is goods. Similarly, under Section 2(f)(iii) there is no such requirement that the inputs should be manufactured in India only and cannot be imported. 27.1. We have considered the submissions made by both the sides. For determining whether a particular process amounts to manufacture it is not relevant whether the inputs are locally produced or imported. What is important is the end product and whether the manufacturing process amounts to manufacture or not. In the present case, there is no dispute that the activity undertaken by the appellant amounts to manufacture under Section 2(f)(iii). The fact that inputs were imported is immaterial and hence the submission made by the learned senior counsel is rejected. 28. From the facts of this case, we find that the Notification relating to Section 4A were amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation was extended to the assessee, therefore, similar benefit should be given to them. We have considered this submission. The question of extended period of limitation is a mixed question of facts and law and each case has to be decided on the facts of that case. In the present case, it is an admitted position that the appellant were importing parts of scania truck and while they were clearing the parts of the scania trucks they were paying CVD under Section 4A of the Central Excise Act. Thus, it clearly proves that they were aware that duty under Section 4A is required to be levied. Once the duty under Section 4A is chargeable on any item, then if such an item is again repacked or relabelled or any process are undertaken, such activity is considered as an activity of manufacture, then the appellant is required to pay excise duty on the same. It is a different matter that in such cases, at the time of importation CVD would have been paid and the manufacturer will be entitled to take credit of the same and it is possible in some cases there may not be any additional liability. However, the fact remains that the procedure has to be followed and where there is any ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed. Ratio of JCB India Ltd. case (supra) is not applicable. 32. Another contention of the appellant is that in respect of the unpacked goods where the demand has been raised under Section 4, they are entitled to cum-duty benefit. We find that the learned Commissioner (AR) has opposed the same and quoted certain judgments of this Tribunal. We find that on this issue there were contrary judgments of various High Courts/Supreme Court and in order to resolve the issue, under Section 4(1) an explanation was added in 2003 to sort out the issue. The Explanation is as under: Explanation. - For the removal of doubts, it is hereby declared that the price-cumduty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. 33. As per the said explanation, in the facts of the present case, the appellant would be entitled to cum-duty be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related redemption fine. 36. We find that penalty of ₹ 1 lakh has been imposed on Shri J. Kumar, who is the Head Finance Accounts of L T Construction and Mining Machinery. We have gone through the order. Statement of Shri J. Kumar was also recorded. We do not find anything which would indicate that Shri J. Kumar was in personal knowledge that the goods being cleared were liable to confiscation. Under the circumstances the penalty imposed by the adjudicating authority is not in accordance with law and we set aside the penalty imposed on Shri J. Kumar. Appeal of Shri J. Kumar is allowed. 37. We find that in the present case two show cause notice had been issued. The second show cause notice was relating to the goods seized at the dealers premises, M/s. Proficient Equipment Solutions, Nagpur. As discussed, the searches were carried out in June 2011 and there could have been no doubt whatsoever that the goods were liable to payment of duty under Section 4A/Section 4 and the goods were cleared without payment of duty. The confiscation of the goods is therefore, in order. The penalty under Section 11AC is also in order. In case, these goods in part or full are also cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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