2014 (12) TMI 405 - AT - Central Excise

Interpretation of Exemption Criteria for Fully Built Vehicles: Key Points and Clarifications

KAILASH VAHAN UDYOG LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BANGALORE-I

The Tribunal analyzed the eligibility criteria, interpreted exemption conditions, compared conditions within the notification, and clarified the process ... Waiver of pre deposit - Manufacture of fully built vehicles on the chasis - Benefit of Notification No.6/2006 dt.01/03/2006 - whether the appellant is eligible for the benefit of the notification or not - Held that:- Value of the purpose of payment of central excise duty has to be the price at which the goods are sold by the principal manufacturer, that question would arise only when it is decided that the benefit of the notification claimed by the appellants is not admissible. The benefit is admissible, automatically the value of the chasie will have to be deducted and in such a case, the value has to be naturally work out separately since what is being sold is only chasis and not a fully built vehicle by the principal manufacturer to the customers. - appellant is eligible for the benefit of Sl.No.41 of the notification, the question of adoption of value on which the goods are sold by ALL to the ultimate customer would not be relevant for determination of assessable value of fully built vehicles manufactured by the appellants. Therefore the requirements of pre-deposit is waived and stay against recovery is granted during the pendency of appeal - Stay granted. Issues:1. Eligibility for exemption under Notification No.6/2006 CE dt. 01/03/2006 and Notification No.12/2012-CE dt. 17/03/2012.2. Interpretation of conditions for availing benefit of notifications.3. Comparison of conditions No.9 and No.10 for exemption.4. Determination of assessable value for fully built vehicles.Analysis:Issue 1: Eligibility for ExemptionThe appellant, engaged in manufacturing fully built vehicles for another company, claimed exemption under specific notifications. The dispute arose as the Revenue contended that the appellant was not eligible for the exemption due to non-payment of duty on the chassis supplied. The appellant argued that the notification did not explicitly require duty payment for eligibility, and the benefit should be available regardless.Issue 2: Interpretation of ConditionsThe Tribunal considered the precedent set by a previous case to determine that the value for excise duty should be based on the price at which the goods are sold by the principal manufacturer. However, this valuation would only be relevant if the benefit of the notification was deemed inadmissible. If the benefit was applicable, the value of the chassis would need to be deducted separately, as only the chassis was sold by the principal manufacturer to customers.Issue 3: Comparison of Conditions No.9 and No.10The counsel highlighted the distinction between conditions No.9 and No.10 of the notification, emphasizing that in the latter, the requirement for duty payment was absent. This distinction was deemed significant by the Tribunal, indicating that even if no duty was paid, the benefit of condition No.10 could still be availed.Issue 4: Determination of Assessable ValueThe Tribunal assessed whether the appellant was eligible for the benefit under the relevant notification. By examining the specific conditions and provisions, it was concluded that if the appellant qualified for the exemption, the value of the chassis would need to be deducted separately. This determination rendered the question of the value at which the goods were sold irrelevant for calculating the assessable value of the fully built vehicles.In conclusion, the Tribunal analyzed the eligibility criteria, interpreted the conditions for exemption, compared different conditions within the notification, and clarified the process for determining the assessable value of fully built vehicles. The decision highlighted the importance of meeting specific conditions for availing exemptions and ensuring accurate valuation for excise duty purposes.