2012 (11) TMI 862 - AT - Central Excise

Tribunal upholds denial of benefits to appellants for manufacturing buses; duty payment on chassis crucial

SATISH KUMAR Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I

SATISH KUMAR Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I - 2012 (281) E.L.T. 290 (Tri. - Del.) Issues involved:1. Denial of benefit under Notification No. 6/2006-C.E. to appellants for manufacturing buses for DMRC.2. Claiming benefit under alternative Notification No. 6/2006, Sl. No. 39 for nil rate of duty for motor vehicles.3. Dispute regarding duty payment on chassis and applicability of Condition No. 9 of Notification No. 6/2006.4. Consideration of financial position of the appellants for pre-deposit waiver.Issue 1: Denial of benefit under Notification No. 6/2006-C.E.:The appellants, engaged in manufacturing buses for DMRC, were denied benefits under Notification No. 6/2006-C.E. The denial was based on the ground that the buses were used as feeder vehicles for DMRC stations, not meeting the criteria of equipment or rolling stock under the notification. The adjudicating authority held that Condition No. 18 was not satisfied as the buses would not be owned by DMRC but by private operators. The Tribunal agreed with this finding, stating that the buses did not qualify as equipment procured by DMRC, thus upholding the denial of benefits.Issue 2: Claiming benefit under alternative Notification No. 6/2006, Sl. No. 39:The appellants sought to claim benefits under an alternative provision, Sl. No. 39 of Notification No. 6/2006, for nil rate of duty for motor vehicles. However, it was noted that the condition required duty payment on the chassis, which had not been fulfilled by M/s. Tata Motors. The Tribunal concurred with the argument that the duty payment on the chassis was a prerequisite for availing the benefits under this provision, and since it had not been paid, the appellants were not eligible for the benefits.Issue 3: Dispute regarding duty payment on chassis and Condition No. 9:The Tribunal examined the argument that a show cause notice issued to M/s. Tata Motors for duty on the chassis should be considered as duty paid. The Tribunal rejected this argument, emphasizing that the duty payment on the chassis was a distinct requirement under Condition No. 9 of the notification. As the duty had not been paid on the chassis, the condition remained unsatisfied, rendering the appellants ineligible for the benefits under the notification.Issue 4: Consideration of financial position for pre-deposit waiver:The appellants argued for a waiver of the pre-deposit amount based on their financial position. However, upon examination of their financial statements, the Tribunal found that their financial condition was not as poor as claimed. Considering the merits of the case and the financial position, the Tribunal directed the appellants to deposit a specified amount towards duty within a given timeframe, with the pre-deposit balance and penalties waived subject to compliance. The recovery was stayed pending compliance verification on a specified date.This detailed analysis covers the issues involved in the legal judgment, addressing the denial of benefits under the notification, the alternative claim under a different provision, the dispute regarding duty payment on the chassis, and the consideration of the appellants' financial position for the pre-deposit waiver.