Tribunal Classifies Fabricated Tanks as Motor Vehicles for Transport of Goods

The Tribunal found that the fabricated tanks by the appellant, used for transporting LPG gas, were correctly classified under Chapter Heading 87.04 as motor vehicles for transport of goods. Referring to Circular No. 2/89, the Tribunal held the appellant eligible for the benefit of Notification No. 217/86-C.E., setting aside the demand for differential duty raised by Revenue authorities. The appeal was allowed in favor of the appellant, with the impugned order confirming the demands being set aside. The judgment was pronounced on 6-1-2015 by the Tribunal in Mumbai, with Members Shri M.V. Ravindran and P.K. Jain presiding.

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Issues:
Classification of fabricated tanks under Chapter Heading 87.04 or 87.07, Benefit of Notification No. 217/86-C.E., Interpretation of Circular No. 2/89, Duty liability on products manufactured.

Analysis:
The appeal concerned the classification of fabricated tanks by the appellant, who manufactures LPG tankers, under Chapter Heading 87.04 or 87.07. The appellant had been discharging duty under Heading 87.04 and availing the benefit of Notification No. 239/86. Revenue authorities contended that the tanks should be classified under Heading 87.07, leading to a demand for differential duty. The appellant argued that their tanks should be classified under Heading 87.04 as motor vehicles for transport of goods, as they are used for transporting LPG gas. The departmental representative argued that the tanks are correctly classifiable under Heading 87.07. The Tribunal considered the submissions and perused the records to resolve the classification issue.

The Tribunal found that the appellant had been discharging duty under Heading 87.04 and that the tanks fabricated by them were attached to a prime mover and a non-prime mover. It was noted that the lower authorities had accepted the duty liability discharged by the appellant under Heading 87.04. The Tribunal referred to Circular No. 2/89, which clarified that tanks fabricated for mounting on chassis in the manufacture of road tankers would be regarded as fabrication of bodies for motor vehicles under Heading 87.07. The Tribunal held that the appellant was eligible for the benefit of Notification No. 217/86-C.E. based on the circular and set aside the demands raised by the Revenue authorities.

The Tribunal disposed of the appeal on the legal issue of classification, without delving into other raised matters. The impugned order confirming the demands was set aside, and the appeal was allowed in favor of the appellant. The judgment was pronounced on 6-1-2015 by the Tribunal in Mumbai, with Shri M.V. Ravindran and P.K. Jain as the Members hearing the case.

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