Custom, Excise & Service Tax Tribunal
M/S. Janata Rubber & Engg. Works vs Commissioner Of Central Excise, ... on 4 October, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/2146/2004-Mum. (Arising out of Order-in-Original No. 525/08/Commr./V/2004 dated 24/5/2004 passed by the Commissioner of Central Excise, Mumbai-V ) For approval and signature: Honble Mr. S.S. Kang, Vice President Honble Mr. Sahab Singh, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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M/s. Janata Rubber & Engg. Works
:
Appellant
VS
Commissioner of Central Excise, Mumbai-V
:
Respondent
Appearance
Shri M.H. Patil, Advocate for Appellant
Shri M.S. Reddy, Deputy Commissioner (A.R) for respondent
CORAM:
Mr. S.S. Kang, Vice President
Mr. Sahab Singh, Member (Technical)
Date of hearing : 04/10/2012
Date of decision : 04/10/2012
ORDER NO.
Per : S.S. Kang
Heard both sides.
2. Appellant filed this appeal against the impugned order passed by the Commissioner of Central Excise, whereby the demand of Rs.4,25,888/- along with interest is confirmed and penalty of equal amount is imposed under Section 11AC of the Central Excise Act.
3. The Revenue authorities denied the benefit of notification No. 162/86-CE as amended and the confirmed the demand after granting the benefit of small scale exemption Notification No. 1/93-CE dated 1.3.1993. The contention of applicant is that the Notification No. 27/2002-CE(NT) dated 23/7.2002 is issued under Section 11AC of the Central Excise Act, granting exemption from payment of Central Excise duty to bodies built by independent body builders on motor vehicle chassis. The benefit of this notification was denied by the adjudicating authority on the ground that the benefit is available in respect of the goods classified under Chapter heading 87.02, 87.03 and 87.04 of the Central Excise Tariff, whereas the bodies built by the appellant are covered under the heading 87.07 of the Central Excise Tariff. The contention of appellant is that whether bodies built on duty paid chassis classifiable under heading 87.07 of the Central Excise Tariff is entitled for the benefit of notification is came before the Tribunal in the case of Kailash Auto Builders Ltd Vs. Commissioner of Central Excise, Bhopal reported in 2005 (186) E.L.T. 504 (Tri.-Del.) and the Tribunal held against the Revenue. The ratio of the above decision is fully applicable to the facts of the present case hence the demand is not sustainable.
4. The contention of Revenue is that the bodies built of applicant is classifiable under heading 87.07 of the Central Excise Tariff, therefore they are not covered under the benefit of notification as held by the adjudicating authority.
5. We find that the issue involved in this appeal is whether the benefit of notification is available to the bodies built on chassis which are classifiable under heading 87.07 of the Central Excise Tariff are entitled for the benefit of notification No. 162/86-CE came before the Tribunal in the case of Kailash Auto Builders Ltd. (supra) and the Tribunal held as under:-
Shri A.R. Madhav Rao, learned Advocate, submitted that the appellants are independent manufacturer of excisable goods, engaged in the activity of building bodies, cabins on motor vehicle chassis; that they received duty paid chassis from their customers for purpose of building bodies of motor vehicles; that as per Note 3 to Chapter 87 of the Central Excise Tariff, activity of building a body on chassis amounts to manufacture of a motor vehicle at the hands of the body builders; that accordingly, they cleared the body built motor vehicle under Headings 87.02 or 87.04, as the case may be after claiming exemption under Notification Nos. 162/86 or 5/98-C.E. (serial No. 244); that even then the Commissioner (Appeals) under the impugned Order has held that the appellants are required to pay central excise duty on body of motor vehicles falling under heading No. 87.07; that accordingly, the benefit of Notification No. 162/86 has been denied to them. Learned Advocate further submitted that even if it is held that they are liable to pay duty on the body built on motor vehicle chassis under Heading 87.07 of the Central Excise Tariff, they are not required to pay any additional duty in terms of Notification No. 27/02-C.E. (N.T.), dated 23-7-2002 issued under Section 11C of the Central Excise Act; that by the said Notification, the Central Government has directed that duty of excise payable in excess on the bodies built by independent body builders on motor vehicle chassis shall not be required to be paid even if the duty of excise was short-levied during the period from 1-5-1991 to 28-2-2001; that the period involved in all the three appeals is covered by the period mentioned in the Notification as the period of demand is from March 1995 to December 1999. Reliance has also been placed on the decision in the case of Jay Cee Coach Builders Ltd. v. C.C.E., Chandigarh-I - 2003 (159) E.L.T. 297 (Tri.).
?Shri S.C. Pushkarna, learned DR reiterated the findings contained in the impugned Orders.
?We have considered the submissions of both the sides. It is not in dispute that the appellants are independent body builders who are fabricating the bodies on motor vehicle chassis received from their customers. Note 3 to Chapter 87 provides that for the purposes of Chapter 87, building a body or fabrication or mounting or fitting of structures or equipment on the chassis falling under Heading 87.06 shall amount to manufacture of a motor vehicle. The Tribunal in the case of Kamal Auto Industries v. Collector -1996 (82) E.L.T. 558 has held that even after introduction of Note 3 to Chapter 87, bodies built on chassis would remain classifiable under Heading 87.07. This decision of the Tribunal has been affirmed by the Supreme Court as observed by the Larger Bench of the Tribunal in the case of Ambala Coach Builders v. C.C.E. - 2000 (119) E.L.T. 713 (Tri-LB). The Central Government has issued a Notification No. 27/02-C.E. (N.T.), dated 23-7-2002 observing that that a practice was generally prevalent regarding levy of duty of excise on the bodies built by independent body builders on the motor vehicle chassis under Headings 87.02 to 87.04 instead of Heading 87.07 and that such bodies were liable to a higher amount of duty of excise than what was levied according to the said practice during the period from 1-5-1991 to 28-2-2001. The Central Government by the said Notification has directed that the duty payable in excess shall not be required to be paid in respect of bodies built by independent body builders on the motor vehicle chassis on which the duty of excise was short-levied during the aforesaid period in accordance with the said practice. As the demand in the present matter relates to the period specified in Section 11C. Notification and the appellants have paid duty under Headings 87.02/87.04, as the case may be, they are eligible to the benefit of the Notification. Accordingly, they are not liable to pay any duty. The appeals are thus allowed.
6. We find that the ratio of the above decision is fully applicable to the facts of the present case. Therefore, the impugned order is set aside and the appellant is allowed. The appellants are entitled for consequential relief is any in accordance with law.
(Dictated in court) (Sahab Singh) Member (Technical) (S.S. Kang) Vice President Sm ??
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