TaxTMI 
TaxTMI 
1989 (4) TMI 231
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.... paid on 25 consignments of components for motor vehicles cleared by the appellants on 9-4-1986. The appellants are manufacturers of Sakthiman cabs for use in motor vehicles. Under Notification No. 239/86, dated 3-4-1986, these cabs were exempted from payment of Central Excise Duty subject to the condition that it is proved to the satisfaction of the Assistant Collector that the parts are intended to be used as original equipment in the manufacture of vehicles falling under Chapter 87 of the Central Excise Tariff Act, 1985 and manufactured in a Central Govt. Ordnance Factory, and also that in respect of such use elsewhere than the factory of production of the said part the procedure set out in Chapter X of the Central Excises & Salt Act, 19....
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..... 6 Licence as required under Chapter X. In fact they had been clearing these cabs under Chapter X procedure only upto 28-2-1986. With the introduction of Central Excise Tariff Act, 1985, the Cabs fell under Heading 87.07 and the exemption Notification dated 3-4-1986 had not been received by them till 9-4-1986 and hence they had cleared the goods on payment of duty. Their failure to clear the goods under CT. 2 Certificate under cover of AR. 3A assessment document is only a technical failure. There was also no loss of revenue as the goods were actually entitled to exemption on the date of clearance. He also placed reliance upon a Special Bench order in the case of M/s. Friends Enterprises, Jamshedpur v. Collector of Central Excise, Patna, wh....
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....e components were manufactured by the Assessees. The same were actually used (in the manufacture of the final products viz; Vehicles falling under Chapter 87) in Vehicle factory at Jabalpur i.e. the goods were used in a factory elsewhere than the factory in which the same were produced." But he rejected the claim because the Chapter X procedure was not followed which was a condition in the Notification. While dealing with the appeal, the Collector (Appeals) has also observed, "In this case, the provisions of Chapter X of the Central Excise Rules were not substantially followed by the appellants." Therefore, the first condition of the Notification regarding the satisfaction of the Assistant Collector about the use of the parts as original....