TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal corrects classification of vehicle parts, grants relief to appellant</h1> <h3>CASE NEW HOLLAND CONSTRUCTION Versus COMMISSIONER OF C. EX., INDORE</h3> CASE NEW HOLLAND CONSTRUCTION Versus COMMISSIONER OF C. EX., INDORE - 2013 (287) E.L.T. 447 (Tri. - Del.) Issues Involved:1. Classification of Wheeled Tractor Loader Backhoe (WTLB) and Vibrating Compactor (VC) parts as automobile parts.2. Applicability of the term 'manufacture' to repacking of WTLB and VC parts.3. Interpretation of the term 'Automobile' in the context of Central Excise Act, 1944.4. Validity of duty demands and penalties imposed by the Commissioner.5. Eligibility for Cenvat credit on duty-paid components.6. Requirement of pre-deposit for hearing the appeals.Detailed Analysis:1. Classification of Wheeled Tractor Loader Backhoe (WTLB) and Vibrating Compactor (VC) parts as automobile parts:The appellant manufactures construction equipment classified under Central Excise Tariff headings 84295900 and 84305090. They also trade in spare parts of WTLB and VC, which are repacked for retail sale. The dispute centers on whether these parts should be classified as 'automobile parts' under Entry No. 100 of the Third Schedule to the Central Excise Act, 1944, prior to 29-4-2010. The Department argues that WTLB and VC, as self-propelled machinery, fall under the definition of 'Automobile' per the Motor Vehicle Act, 1988, and the Air (Prevention and Control of Pollution) Act, 1981. The appellant contends that WTLB and VC are construction machinery under headings 8429 and 8430, and their parts under heading 8431, should not be classified as automobile parts.2. Applicability of the term 'manufacture' to repacking of WTLB and VC parts:Section 2(f)(iii) of the Central Excise Act, 1944, states that packing or repacking of goods listed in Schedule III amounts to manufacture. The Department issued show cause notices demanding duty on the ground that repacking WTLB and VC parts for retail sale constitutes manufacture. The appellant argues that the parts of WTLB and VC are not automobile parts and thus repacking them does not amount to manufacture under the relevant entry.3. Interpretation of the term 'Automobile' in the context of Central Excise Act, 1944:The appellant relies on Board's Circulars No. 22/90 and No. 167/38/2008-CX., which clarify that construction machinery parts should not be treated as automobile parts. The appellant also cites the Supreme Court's judgment in MSCO Pvt. Ltd. v. UOI, which states that terms in a statute should be interpreted based on their ordinary meaning or as understood in the relevant context, not by definitions in unrelated statutes. The Tribunal agrees with the appellant's interpretation, stating that the term 'Automobile' in the Third Schedule should be understood in the context of the Central Excise Tariff, where WTLB and VC are classified as construction machinery.4. Validity of duty demands and penalties imposed by the Commissioner:The Commissioner confirmed a total duty demand of Rs. 13,40,71,400/- along with interest and imposed a penalty of Rs. 3,25,00,000/-. The Tribunal finds the Department's interpretation for the period prior to 29-4-2010 incorrect and supports the appellant's view that WTLB and VC parts are not automobile parts. For the period after 29-4-2010, the Tribunal acknowledges that the parts are covered by Entry No. 100A and repacking would attract excise duty, which the appellant has already paid.5. Eligibility for Cenvat credit on duty-paid components:The appellant argues that even if repacking amounts to manufacture, they are eligible for Cenvat credit on the duty-paid components. The Tribunal notes that the Commissioner did not address the eligibility for Cenvat credit and implies that the appellant's duty liability would be minimal after accounting for Cenvat credit.6. Requirement of pre-deposit for hearing the appeals:Considering the amounts already paid by the appellant (Rs. 60 lakhs during investigation, Rs. 1,79,75,486/- for the period after 29-4-2010, and a bank guarantee of Rs. 1,15,84,774/-), the Tribunal finds these sufficient for hearing the appeals. The requirement of pre-deposit of the balance amount of duty demand, interest, and penalty is waived, and recovery is stayed until the disposal of the appeals.Conclusion:The Tribunal grants the appellant relief for the period prior to 29-4-2010, finding the Department's classification incorrect. For the period after 29-4-2010, the Tribunal acknowledges the duty liability but notes the appellant's compliance with payments. The appeals are admitted without requiring further pre-deposits, and the recovery of the remaining amounts is stayed.
TaxTMI 