Customs, Excise and Gold Tribunal - Delhi
Atlas Copco (India) Ltd. vs Commissioner Of Central Excise on 23 June, 1997
Equivalent citations: 1997ECR64(TRI.-DELHI), 1997(94)ELT613(TRI-DEL)
ORDER
U.L. Bhat, J. (President)
1. This appeal is directed against order-in-original dated 6-12-1988 passed by the Additional Collector of Central Excise, Pune against the appellant.
2. Appellant, engaged in the manufacture of Aquadrill 441(1) Water Well Rigs and Air Compressors mounted on carriers, filed price lists in Part I and was clearing such equipment on payment of duty on the approved value. Appellant had declared in the price lists the value of Aquadrill and Compressors but not the value of cabin and rear platform mounted on chassis supplied by the customers on which Aquadrill and Compressor are mounted. Appellant was paying duty on the value of Aquadrill and Compressor as shown in the price lists and duly approved. On 8-4-1987 notice was issued to the appellant stating that during the period 11-10-1986 to 28-2-1987 appellant was liable to pay duty on the value of cabin and rear platform fitted in the chassis on which Aquadrills and Compressors were mounted and proposing demand of duty on the said value. In respect of earlier period 1-4-1982 to 10-10-1986, Collector of Central Excise issued notice on 13-5-1988 making a similar claim in respect of value of cabin and rear platform and also alleging suppression of the value of cabin and rear platform in the price lists and seeking to avail the benefit of larger period of limitation under the proviso to Section 11A of the Central Excise Act, 1944. The notice dated 8-4-1987 was opposed by the appellant but the demand therein was confirmed by the Assistant Collector. However, the Collector (Appeals), Central Excise set aside the demand on the ground that no duty was payable on the value of cabin and rear platform. Department challenged this order before the Tribunal in Appeal No. E/2346/88-A and the same was dismissed by Final Order No. 647/97-A, dated 19-3-1997.
3. Appellant opposed the second show cause notice dated 13-5-1988 on merits as well as on the ground that the notice was barred by the principle of res judicata in view of the decision on the earlier show cause notice. Additional Collector overruled these contentions and confirmed the demand. This order is now challenged.
4. Copy of one of the customers order was placed before us. The order describes the subject matter as Drilling Rig Aquadrill 441(1). The further description is "Truck mounted compressed air operated water well drilling rig Aquadrill 441(1) capable of drilling...." The order describes that drilling rig consists of Supporting Frame, Chainfeed, Rotation Unit, Air Winch/Hydraulic Mast Raising System, two Jacks, Centralized control panel and Diesel Screw Type Air Compressor. Price was shown for Aquadrill with compressor including mounting on truck but excluding cost of truck, cab and platform. It is explained that duty paid Chassis being supplied by the customers would be sent to job worker for construction of cabin and rear platform on the chassis and job worker would clear the same on payment of duty and on receiving the same, the appellant who manufactures Aquadrill and Air Compressor would mount the same on the rear platform and it is in this condition that the entire truck with cabin, rear platform, Air Compressor and Aquadrill is delivered to the customer. Appellant in turn was paying duty on the value of Aquadrill and Air Compressor but not on the value of chassis, cabin or rear platform. Erstwhile T.I. 34 covered motor vehicles, tractors and trailers.
5. Vehicles other than railway or tramway fall under Chapter 87 of the present tariff. Heading 87.05 takes in "Special purpose motor vehicles". The entire final product as cleared from the appellants factory would be a special purpose motor vehicle falling under Heading 87.05. Notification 162/87 exempted goods specified in column (3) of the Table and falling under heading referred to therein from so much of the duty of excise as is in excess of the amount calculated at the rate specified in corresponding entry in column (4) subject to conditions laid down in corresponding column (5). Item (11) of the Table refers to special purpose motor vehicle falling under 87.05. Rate of duty is 'nil' subject to the condition that appropriate duty of excise has been paid on the Chassis of such vehicles and the equipments used in the manufacture of such vehicle. Neither side is in a position to state whether there was any similar exemption under the old tariff.
6. It is important to note that demand is not for differential duty on the vehicle as such which is the final product leaving the factory of the appellant. Demand of duty is only in regard to drilling Aquadrill and Compressor manufactured by the appellant in their own factory. The notification referred to above takes care of motor vehicles as such on the condition that duty had been paid on the Chassis and the equipment used in the manufacture of such vehicle. As indicated above, since the demand is not for duty on the vehicle, this may not have much relevance.
7. Admittedly, appellant paid duty on the value of the Aquadrill and Compressor without including in the assessable value the value of cabin and rear platform for which customer had made payment to the appellant and in respect of which the appellant had paid lesser amount to the job worker. According to the Department, the price of cabin and rear platform would be additional consideration for Aquadrill and Compressor. According to the learned Counsel for the appellant Aquadrill and Compressor are complete once they are manufactured in the factory and mounting on the rear platform of the truck has nothing to do with the manufacturing activity relating to Aquadrill and Compressor and the act of mounting would not amount to manufacture. According to Shri M. Ali, JDR, platform and cabin would be ancillary to the manufacture of Aquadrill and Compressor and, therefore, the value thereof must be included.
8. According to the show cause notice Aquadrill and Compressor are factory made and are subsequently mounted on the platform. Appellant would be undoubtedly liable to pay duty on the manufacture of Aquadrill and Compressor. Appellant had paid such duty. These goods had already come into existence before they were mounted on the platform and the excisable event had already taken place. Mounting goods on the platform cannot be said to lead to manufacture of a different product; in fact the Department has no such case. It is difficult to accept that mounting on platform is ancillary to the manufacture of Aquadrill and Compressor. It may be ancillary to the manufacture of truck but not to the manufacture of equipments which are only mounted on the platform, evidently for the purpose of easy transport and operation. There is no material before us to show that Aquadrill and Compressor cannot function without being mounted on the platform. We fail to see why the value of platform should be added to the assessable value of Aquadrill and Compressor; much less is there any reason for including the value of the cabin in the value of the equipment. Therefore, the demand has to fail.
9. It is contended by the learned Counsel for the appellant that by virtue of earlier order of the Tribunal on earlier show cause notice, the principle of res judicata would be attracted. On the earlier show cause notice, the Assistant Collector held in favour of the Department and the Collector (Appeals) held against the Department. Department filed an appeal before the Tribunal. Copy of the order placed before us shows that on behalf of the Department it was not argued before the Tribunal that value of cabin and rear platform should be included in the value of Aquadrill and Compressor. Copy of Memo of Appeal filed before the Tribunal is not before us. In these circumstances, it cannot be said that the Tribunal had decided any such aspect. Of course, the Collector (Appeals) had decided the aspect and against the department. The question of res judicata would not arise though, ordinarily the statutory authority may not take a view contrary to the view taken earlier unless the previous order was not supported by cogent reason or unless there are cogent reasons warranting a different view being taken. We have considered the matter on merits and recorded our finding. Therefore, it is unnecessary to go further into the matter.
10. Appellant had urged plea of limitation also. Since we have taken a view in favour of the appellant on merits, we find it unnecessary to consider this contention.
11. Impugned order is set aside and the appeal is allowed.