1997 (9) TMI 103 - SC - Central Excise

Small Manufacturers Exempt from Excise Duty Under Central Excise Tariff

The Supreme Court upheld the classification of bodies manufactured by small scale manufacturers under the Central Excise Tariff as falling under Heading ... Motor vehicles Issues involved: Classification of bodies manufactured by small scale manufacturers under Central Excise Tariff - Whether bodies are classifiable under Heading No. 87.07 or under Heading Nos. 87.02 and 87.04 - Entitlement to exemption from excise duty under Notification No. 175/86.Judgment Details:In a series of appeals and special leave petitions, the Supreme Court considered the classification of bodies manufactured by small scale manufacturers under the Central Excise Tariff. The bodies in question were built on chassis supplied by customers. The key issue was whether these bodies should be classified under Heading No. 87.07 or under Heading Nos. 87.02 and 87.04. If classified under Heading No. 87.07, they would be eligible for exemption from excise duty under Notification No. 175/86. The High Court of Punjab and Haryana, along with the Customs Excise and Gold (Control) Appellate Tribunal, held that the bodies fell under Heading No. 87.07 and were entitled to the exemption. This view was upheld by the Supreme Court, dismissing the appeals and special leave petitions challenging the classification.In a separate Civil Appeal No. 2822 of 1987, the Tribunal had determined that the respondents were liable to pay excise duty at a rate of Rs. 4,000 per vehicle based on Notification No. 279/86. The respondent did not contest this decision and paid the duty accordingly. The Supreme Court, while dismissing the appeal filed by the Revenue, affirmed the Tribunal's decision regarding the imposition of excise duty at Rs. 4,000 per vehicle, clarifying that this aspect of the judgment would remain undisturbed. No costs were awarded in this matter.