Chassis value exclusion under Notification No. 4/97-C.E. extends to running gear in body-built semi-trailers.

For semi-trailers fabricated by a body builder on customer-supplied chassis, the Tribunal held that the value of the running gear was not separately includable in assessable value where Notification No. 4/97-C.E. applied. The exemption was available to vehicles manufactured by a person other than the chassis manufacturer, and the notification required exclusion of the chassis value. Accepting the technical understanding of chassis and following Mukul Engineering Works, the Tribunal treated the chassis as including the running gear for this purpose and rejected the contrary view in Fabtech Engineers. The duty demand and consequential penalties therefore could not survive.

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Issues: Whether, for semi-trailers fabricated by a body builder on customer-supplied chassis, the value of the running gear was includable in the assessable value, or whether exemption under Notification No. 4/97-C.E. was available by excluding the value of the chassis.

Analysis: The exemption applied to vehicles of the specified headings manufactured by a person other than the chassis manufacturer, and the explanation directed exclusion of the chassis value. The dispute turned on whether running gear could be separated from chassis for this purpose. Accepting the technical understanding of chassis and following the coordinate Bench decision in Mukul Engineering Works, the Tribunal held that the distinction between chassis and running gear was not justified when the assessee was only doing body-building on the chassis supplied by customers. The contrary view in Fabtech Engineers was not accepted because it did not explain why running gear was not integral to the chassis.

Conclusion: The value of the running gear was not separately includable, the exemption remained available, and the duty demand with consequential penalties could not survive.

Ratio Decidendi: For exemption under Notification No. 4/97-C.E., where a manufacturer carries out body-building on customer-supplied chassis, the chassis is to be treated as including its running gear and its value is excluded from assessable value.

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