2009 (9) TMI 448 - AT - Central Excise

Tribunal Denies Revenue's Appeal, Upholds Commissioner's Decision on Tax Exemption Eligibility

The Tribunal upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal, finding that the issue had already reached finality in ... Tanker- Notification No. 6/2002-C.E.- The assessee classified the tankers under Heading No. 87.07 under Central Excise Tariff Act, 1985 and claimed duty exemption thereon under Notification No. 6/2002-C.E., dated 1-3-2002 (Sl. No. 239). The assessee stated that they are manufacturing road tankers as per the specifications given by the customers i.e., Kovvur unit and that normally those road tankers are cleared “as such” to their Kovvur unit in their own/other lorries and only in few cases as per the instructions of their customers, tankers are cleared by mounting/fitting to the lorry (motor vehicle) chassis sent by their customers. The adjudicating authority has dropped proceedings by relying upon the Order-in-Appeal No. 60/2003 (G) C.E. dated 11-11-2003, wherein it was held that “road tankers manufactured and cleared by the assesses are eligible for exemption under Notification No. 6/2002-C.E., dated 1-3-2000. Commissioner (Appeals) uphold the order of adjudicating authority. Held that- the issue involved in this appeal has already attained finality in favour of the respondent, we do not find merits in the appeal filed by the Revenue and we reject the same. Issues:Classification of tankers under Central Excise Tariff Act, 1985; Duty exemption under Notification No. 6/2002-C.E.; Finality of orders in Appeal; Applicability of CEGAT decision.Classification of tankers under Central Excise Tariff Act, 1985:The case involved the classification of tankers manufactured by the assessee under Heading No. 87.07 of the Central Excise Tariff Act, 1985. The assessee claimed duty exemption under Notification No. 6/2002-C.E., dated 1-3-2002 (Sl. No. 239). The tankers were either cleared as such outside the factory or mounted on a chassis of a motor vehicle for transportation of chemicals. The Adjudicating Authority relied on a previous order to grant exemption, which was contested by the Revenue.Duty exemption under Notification No. 6/2002-C.E.:The Revenue appealed the dropping of proceedings by the Adjudicating Authority to the Commissioner (Appeals). The Commissioner upheld the decision based on previous orders that had not been contested by the department. The Revenue argued that the department had appealed to the CESTAT against similar orders by the Commissioner (Appeals) in a different case. The Revenue contended that the circumstances of the present case were different from the CEGAT decision cited by the assessee for claiming exemption.Finality of orders in Appeal:The Revenue challenged the Commissioner (Appeals) decision, claiming that the issue had not reached finality as the department had appealed to the CESTAT against similar orders by the Commissioner (Appeals) in another case. The Tribunal noted that the issue had already attained finality in favor of the respondent based on previous orders and rejected the Revenue's appeal.Applicability of CEGAT decision:The Revenue argued that the CEGAT decision cited by the assessee for claiming exemption was not applicable to the present case. The Revenue highlighted differences in the circumstances between the CEGAT case and the present case, emphasizing that the conditions for exemption under the Notification were not met by the assessee. The Tribunal rejected the Revenue's appeal, noting that the issue had already been settled in favor of the respondent based on previous orders.In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal, finding that the issue had already reached finality in favor of the respondent based on previous orders. The Tribunal emphasized that the circumstances of the present case were different from the CEGAT decision cited by the assessee and that the conditions for exemption under the Notification were not fulfilled by the assessee.