1997 (6) TMI 139 - AT - Central Excise

Tribunal rules duty payment on cabin and platform unjustified, rejects additional consideration claim

ATLAS COPCO (INDIA) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, PUNE

The Tribunal ruled in favor of the appellant, holding that the duty payment on the value of the cabin and rear platform mounted on chassis was ... Valuation - Res judicata Issues:1. Duty payment on value of cabin and rear platform mounted on chassis.2. Applicability of res judicata principle on second show cause notice.3. Interpretation of duty payment under Notification 162/87.4. Inclusion of value of cabin and rear platform in assessable value.5. Plea of limitation.Analysis:Issue 1:The appellant, engaged in manufacturing Aquadrill and Air Compressors, faced a demand for duty payment on the value of cabin and rear platform mounted on chassis supplied by customers. The Department contended that the value of these components should be considered as additional consideration for the Aquadrill and Compressors. However, the appellant argued that these components were ancillary to the manufacturing process and should not be included in the assessable value. The Tribunal agreed with the appellant, stating that mounting the goods on the platform did not lead to the manufacture of a different product. As the Aquadrill and Compressors were already manufactured before mounting, the demand for duty on the value of the cabin and rear platform was deemed unjustified.Issue 2:Regarding the principle of res judicata, the appellant argued that a previous order favored them in a similar dispute. The Tribunal noted that in the earlier case, the Department did not argue for the inclusion of the cabin and rear platform value. As a result, the Tribunal did not address this aspect in the previous order. The Tribunal clarified that the principle of res judicata did not apply in this scenario, as they had independently considered and decided the matter on its merits.Issue 3:The interpretation of duty payment under Notification 162/87 exempted special purpose motor vehicles, including those falling under Heading 87.05, subject to certain conditions. The Tribunal emphasized that the demand in question was not for duty on the final vehicle but specifically on the Aquadrill and Compressors. As long as duty was paid on the chassis and equipment used in manufacturing the vehicle, the exemption applied, further supporting the appellant's position.Issue 4:The appellant also raised a plea of limitation, which the Tribunal did not delve into due to the favorable decision on the merits. Since the Tribunal ruled in favor of the appellant regarding the duty payment on the value of the cabin and rear platform, they deemed it unnecessary to address the limitation contention separately.In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, emphasizing that the demand for duty payment on the value of the cabin and rear platform was unwarranted based on the facts and legal interpretations presented during the proceedings.