Manufacture by bus body building supports Rule 5 refund claim for unutilized CENVAT credit

Building a bus body on a chassis was treated as manufacture of a motor vehicle under Chapter Note 5 to Chapter 87, so an independent bus body builder could not be characterised as a mere non-manufacturing claimant. On that basis, the bar to maintaining a refund claim for unutilised CENVAT credit under Rule 5 of the Cenvat Credit Rules, 2004 was unsustainable, and the appellant was held eligible to file the refund claim. The remaining merits-related requirements for sanction of the refund were left to be reconsidered by the appellate authority.

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Issues: Whether the appellant, being an independent bus body builder, was entitled to claim refund of unutilized CENVAT credit under Rule 5 of the Cenvat Credit Rules, 2004.

Analysis: Chapter Note 5 to Chapter 87 treats building a body or fabricating, mounting or fitting structures on a chassis as manufacture of a motor vehicle. On that basis, the appellant's activity amounted to manufacture. The appellant was therefore not to be treated as a mere non-manufacturing claimant, and the view that it was ineligible to maintain the refund claim under Rule 5 could not be sustained. The question whether the refund claim satisfied the remaining merits-related requirements was left for reconsideration by the appellate authority.

Conclusion: The appellant was held eligible to file the refund claim under Rule 5, and the contrary finding was set aside.

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