1991 (12) TMI 168 - AT - Central Excise

Appellate Tribunal Upholds Duty Exoneration for Transport Corporation

The Appellate Tribunal CEGAT, Madras upheld the order confirming duty liability on body building activities but exonerated the transport corporation ... Appeal Issues:- Appeal against order confirming duty liability on body building- Seizure of vehicles during pendency of writ petition- Allegation of non-duty paid lorries against appellant- Adjustment of deposit towards third parties' duty liability- Exoneration of appellant from duty liability- Jurisdiction of the Tribunal in adjusting depositAnalysis:The appeal before the Appellate Tribunal CEGAT, Madras involved challenging an order confirming a duty liability on body building activities. The appellant, a transport corporation, had old bus chassis converted into lorries by body builders. The Department demanded duty on these vehicles, leading to a writ petition and a stay order by the High Court. Despite the stay, the vehicles were seized, prompting the appellant to deposit an amount for their release. The show cause notice alleged non-duty paid lorries and potential confiscation. The impugned order confirmed duty liability but adjusted the amount deposited by the appellant towards the body builders' duty liability.During the hearing, the appellant's counsel argued various points, including the illegality of seizing vehicles during the writ petition stay, lack of duty demand against the appellant, and the adjustment of deposit towards third parties' liability. The counsel also contended that the body building activity might not attract excise duty. The Department supported the adjudicating authority's reasoning in the impugned order.The Tribunal observed that the show cause notice did not demand duty from the appellant. The order did not hold the appellant liable for duty; instead, it focused on the body builders as manufacturers. The Tribunal noted the appellant's exoneration from duty liability and that the adjustment of deposit towards third parties' duty was not an adjudicatory act. As the Tribunal's jurisdiction was limited to adjudicatory matters, it dismissed the appeal, suggesting the appellant seek relief through appropriate legal channels.The Tribunal emphasized that the appellant's letter undertaking duty payment did not create legal obligations against the appellant. It also criticized the Department for seizing vehicles during the High Court stay and advised restraint in its remarks. Ultimately, since no duty liability or penalty was imposed on the appellant, the appeal was dismissed.In conclusion, the Tribunal upheld the impugned order, exonerating the appellant from duty liability and dismissing the appeal due to the lack of jurisdiction in adjusting the deposit towards third parties' duty liability. The appellant was advised to seek relief through appropriate legal avenues given the circumstances surrounding the case.