2005 (8) TMI 680 - AT - Central Excise

Tribunal rules in favor of appellant on product classification, overturns duty demand, sets aside penalty.

BHAVANI LOADERS Versus COMMISSIONER OF C. EX., AHMEDABAD

BHAVANI LOADERS Versus COMMISSIONER OF C. EX., AHMEDABAD - 2006 (205) E.L.T. 1017 (Tri. - Del.) Issues: Classification of product under heading 8705 or 8429, imposition of penalty on partner.Classification Issue:The appellant manufactured 'Loader cum Dozzer' by modifying tractors and mounting material handling equipment on them. The appellant claimed classification under heading 8705 as a special purpose motor vehicle, while Revenue authorities argued for classification under 8429 for self-propelled bulldozers and similar equipment. The Tribunal referred to a previous case involving a similar product and classification under heading 8705. Note 3 to Chapter 87 was crucial, stating that mounting equipment on tractors constitutes the manufacture of a motor vehicle. Since the appellant's product involved mounting material handling equipment on tractors, it fell under heading 8705. The Tribunal found in favor of the appellant due to the previous judgment and set aside the duty demand based on incorrect classification.Penalty Imposition Issue:The second appeal pertained to the imposition of a penalty on the partner of the appellant. The Tribunal's decision primarily focused on the classification issue, which was resolved in favor of the appellant. As a result, the penalty imposed on the partner was also set aside along with the duty demand. The Tribunal's decision provided consequential relief to the appellants, considering the incorrect classification and penalty imposition as unsustainable based on the classification order. The judgment highlighted the importance of consistency in classification and the impact it has on associated penalties, ensuring fair treatment for the appellants.