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of <h1>Tribunal allows appeal, deems vehicle bodies exempt as parts under Central Excise Tariff</h1> <h3>COMMERCIAL ENGINEERS & BODY BUILDERS CO. P. LTD. Versus CCE., LUDHIANA</h3> The Tribunal allowed the appeal in favor of the appellant, holding that the bodies of motor vehicles manufactured by them were eligible for exemption ... Motor vehicle parts - Exemption Issues:Interpretation of Notification No. 64/95-C.E regarding exemption for goods supplied for defense and specified purposes under Central Excise Tariff.Classification of bodies of motor vehicles under Chapter 87 and their eligibility for exemption as parts of motor vehicles.Analysis:The appellant appealed against the Order-in-Appeal passed by the Commissioner (Appeals) as the benefit of Notification No. 64/95-C.E was denied to them. The dispute arose as the appellant, engaged in manufacturing bodies of motor vehicles, cleared them to the Central Govt. Ordnance Factory. The appellant claimed that these bodies were used in the manufacture of motor vehicles and should be considered as parts of motor vehicles under Chapter 87 of Central Excise Tariff, thus eligible for the notification's exemption.The Revenue contended that the appellant was not clearing parts of motor vehicles but bodies, which cannot be treated as parts. The crux of the issue lay in the interpretation of the notification, which exempts goods supplied for defense purposes falling under specific chapters, including Chapter 87, subject to certain conditions. The notification required the parts to be used in a Central Govt. Ordnance Factory for manufacturing vehicles under Chapter 87, which was not disputed by the Revenue.The Tribunal analyzed that the bodies manufactured by the appellant were classifiable under Chapter 87 and used in the production of motor vehicles by the Central Govt. Ordnance Factory. It was noted that the lower authorities erred in denying the notification's benefit solely based on the classification of bodies as not being parts of motor vehicles. The Tribunal concluded that bodies could also be considered parts of motor vehicles, especially when used in their manufacture. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.
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