TaxTMI 
TaxTMI 
1991 (7) TMI 181
X X X X Extracts X X X X
X X X X Extracts X X X X
....lleged that Semi-Tanker-Trailer No. 57 was cleared by the appellants without payment of Central Excise duty and in respect of Semi-Tanker-Trailer No. 55 covered by gate-pass No. 35 dated 22-12-1987 prior to the removal from the factory the appellants had failed to debit the duty in the PLA. It was further alleged that the appellants product being Semi-Tanker-Trailer was assessable @ 15% under Heading 8716.00 of the Central Excise Tariff whereas it had been deliberately misdeclared as motor-vehicle attracting duty at Rs. 4,000/- per vehicle under Heading 8704.00 read with Notification No. 162/86. It was also alleged that the assessable value of the tanker-trailer ought to have been the aggregate of the value of the pressure vessel and the value of the trailer parts. On this basis the appellants were asked to show cause as to why differential duty amounting to Rs. 3,58,303-20 on goods cleared during the period 1-4-1987 to 23-12-1987 should not be recovered and Semi-Tanker-Trailer No. 57 released provisionally against B-11 bond should not be confiscated. 2. In the impugned order dated 23-8-1988 passed by the Additional Collector it was held that the LPG tanks manufactured by the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hok Leyland Ltd. He added that the final product that emerged after mounting the tank on the trailer and prime mover was an integrated unit commercially known as 'Articulated Vehicles'. He stated that the Chief Controller of Explosives and the Regional Transport Authorities in various states were treating such vehicles as inseparable units and were licensing them as single unit and not separately as prime mover and trailer. He contended that such vehicles were commercially known as "Articulated Vehicles" which were also defined under explanation (2) below the table annexed to Notification No.162/86. He argued that being designed for the transport of goods such vehicles were appropriately classifiable under Heading 8404.00 as motor vehicles and not as trailers under Heading 8716.00 as held by the Additional Collector. He stated that the trailers used by the appellants for the manufacture of 'articulated vehicles' were for the sake of convenience in transportation brought in three parts namely, running gear, landing gear and mounted plate and duty having been paid on them under Heading 8716.00 no further duty could be levied on them under Heading 8716.00 since after assembly the resu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....here was sufficient balance in the PLA. In support of his arguments Shri Gujral cited the following case law :- (i) Garden Reach Shipbuilders & Engineers Ltd., Marine Drive Engine Plant v. CCE, Patna [1985 (19) E.L.T. 447]. (ii) Bharat Heavy Electricals Ltd. v. CCE, Indore [1987 (31) E.L.T. 799 (Tribunal)] (iii) Steel Industrials Kerala Ltd. v. CCE, Cochin [1986 (24) E.L.T. 314 (Tribunal)] (iv) Hindustan Steel Ltd. v. State of Orissa [1978 (2) E.L.T. (J 159)] (v) Air Conditioning Corporation v. CCE, Calcutta [1985 (19) E.L.T. 206 (Tribunal)] (vi) Madhumilan Syntex Pvt. Ltd. & Another v. UOI & Another [1985 (19) E.L.T. 329 (M.P.)] (vii) Mac Laboratories (P) Ltd. v. CCE, Bombay [1989 (40) E.L.T. 276 (S.C.) = 1985 (19) E.L.T. 307 (Tribunal)] (viii) Filtronics Ltd. v. CCE [1989 (43) E.L.T. 457 (Tribunal)] (ix) CCE, Hyderabad v. Chemphar Drugs & Liniments [1989 (40) E.L.T. 276 (S.C.) = 1989 (21) ECR 182 (S.C.)] (x) Tata Yodogwa Limited v. Asstt. Collector of Cen. Excise, Jamshedpur & Others - [1983 (12) E.L.T. 17 (Pat.)] 7. On behalf of the department the learned JDR Shri M.S. Arora opposed the admission of the additional evidence filed by the appellants....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be based strictly on the interpretation of the relevant provisions of the Central Excise Tariff. However, in our view, the classification lists relating to the appellants' products approved by the Department from time to time and the order No. 37/89 dated 24-7-1989 passed by the Assistant Collector are vital for the determination of certain other basic issues that arise for consideration in this case. We, therefore, permit the approved classification lists in respect of the appellants' products for the period December, 1987 to March, 1990 and the order dated 24-7-1989 passed by the Assistant Collector to be admitted as additional evidence. 9. It is seen that the appellants are engaged in the manufacture of LPG Tanks and mounting them on certain duty paid trailer parts and prime mover. The resultant product according to the appellants is an integrated vehicle for the transport of goods, classifiable under Heading 8704.00 of the Central Excise Tariff attracting duty @ Rs. 4000/- per vehicle in terms of Notification No. 162/86 (as amended). As against this the Department's case is that the appellants' product being LPG tanker mounted on a trailer chassis is classifiable under the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ailers are fitted with rear wheels only, the forward end resting on the platform of the towing vehicle to which it is coupled by a special coupling device. For this purpose of the following Explanatory Note, the term "trailers" includes semi-trailers. Trailers falling here include : (1) Trailers of the caravan type, for housing or camping. (2) Self-loading agricultural trailers fitted with automatic loading devices and possibly also with attachments for chopping forage, maize (corn) stalks, etc. (3) Self-unloading trailers for carrying different products (forage, manure, etc.) with a moving floor for unloading purposes; these vehicles can be fitted with various attachments (manure chopper, forage shredder, etc.) to adapt them for use as a muck spreader, forage box or root trailer. (4) Other trailers for the transport of goods such as :- (a) Tanker trailers (whether or not fitted with pumps)." It follows from the Explanatory Notes extracted above that 'trailers' and 'semi-trailers' including tanker trailers covered by Heading 87.16 are non-mechanically propelled vehicles used for the transport of goods or persons which are designed to be coupled to another vehic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cords of the case that the drawings relating to the mounting plan of various parts of these vehicles also describe them as 'tanker-trailer'. 12. The finding that the appellants cannot be deemed as manufacturer of motor vehicles covered by Heading 87.04 of the Central Excise Tariff is reinforced by the decision of the Punjab and Haryana High Court in the case of Darshan Singh Pavitar Singh & Others v. Union of India and Others [1990 (47) E.L.T. 532 (P & H)] from which the relevant extract is reproduced below :- "The only conclusion that can be drawn is that the body building is not the same as the manufacture of complete motor vehicle. It may be a link in the whole process and the Legislature has taxed it as an independent item. It is not unknown that in order to encourage subsidiary industries and the small scale units, the Legislature thinks it proper to exempt such industries or units from the excise duty. However, they still kept the impost if the body is built as part of the integral process of manufacturing the vehicle. It is not disputed that in the trade body building is taken as an independent item and building of it is not understood as manufacturing of a motor vehic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... device to a duty paid prime mover. Even though the tanker-trailer/semi-trailer manufactured by the appellants is coupled by a special coupling device to a duty paid prime-mover, being an item specifically covered by the Heading 87.16, it would once again be chargeable to duty. 14. The appellants have contended that the LPG tank before it is mounted on the trailer and prime-mover is only a bare shell and not a finished item so as to attract duty under Heading 87.07. However, this argument has no force at all, since even if minor functions like painting of the tank or attachment of certain gauges is carried out after the attachment of the tank to the running gear; such tank bodies can be deemed to have acquired the essential character of the finished tanks. Hence, interms of Rule 2(a) of the Rules for interpretation of the Schedule to the Central Excise Tariff Act, 1985, they will have to be deemed as finished products. 15. In regard to the order of the Additional Collector confirming the demand for a sum of Rs. 3,58,303.20 for the period 1-4-1987 to 23-12-1987 under proviso to Section 11A, we find that there is sufficient force in the appellants' argument that the demand was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful mis-statement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case." Having regard to the facts of the case on the ratio of the Supreme Court judgment we hold that the extended period under proviso to Section 11A could not be invoked by the department. 16. As regards the seized semi-tanker trailer No. 57, it is seen that the appellants had cleared it from their factory without payment of duty. Hence we find no reason to interfere with the order of the adjudicating authority holding the vehicle as liable to confiscation. However, in regard to the tanker No. 55 the appellants have pointed out that even though there was sufficient balance in PLA the duty was not debi....