Tariff classification of bus and truck bodies on customer-supplied chassis upheld, with exemption under the notification applied.

Bus and truck bodies fabricated on customer-supplied chassis were held classifiable under Heading 87.07 of the Central Excise Tariff, not under the rival headings pressed by the Revenue, because the manufactured goods properly fell within that entry. On that classification, the exemption under Notification No. 175/86 was available. In the separate appeal concerning duty fixed at a specified per-vehicle rate under Notification No. 279/86, the Tribunal's determination was left undisturbed because it had not been challenged. The Revenue's appeals and special leave petitions were dismissed, leaving the assessee's classification and exemption claim intact.

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Issues: Whether bus and truck bodies fabricated on chassis supplied by customers were classifiable under Heading No. 87.07 of the Central Excise Tariff and, if so, whether they were entitled to exemption under Notification No. 175/86 dated 1 March 1986.

Analysis: The bodies were manufactured by small scale fabricators on chassis supplied by customers. The question was whether such bodies fell under Heading 87.07, as accepted by the High Court and the Tribunal, or under Headings 87.02 and 87.04, as contended by the Revenue. The Court agreed with the view that the goods were properly classifiable under Heading 87.07 and that the exemption notification applied. In the separate appeal concerning duty at Rs. 4,000 per vehicle under Notification No. 279/86 dated 24 April 1986, the Tribunal's view was left undisturbed as the respondent had not challenged it.

Conclusion: The bodies were classifiable under Heading No. 87.07 and qualified for exemption under Notification No. 175/86. The Revenue's appeals and special leave petitions were dismissed, and the Tribunal's duty determination in the separate appeal remained undisturbed.

Final Conclusion: The decision affirmed the assessee's tariff classification and exemption claim, while leaving the separate duty fixation intact.

Ratio Decidendi: Bus or truck bodies fabricated on customer-supplied chassis are classifiable under Heading 87.07 where that entry properly covers the manufactured goods, and the corresponding exemption notification applies accordingly.

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