TaxTMI 
TaxTMI 
1996 (1) TMI 192
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....r Chapter Heading 87.07 and therefore not entitled to the benefit of Notification No. 175/86-C.E. 2. The other two appeals are filed by Collector requesting for setting aside the orders No. 51-CE/JPR/93, dated 29-3-1993 and 70-C.E./JPR/93, dated 30-4-1993. As the issue for determination in all the 3 appeals is the same, they are, therefore, being disposed of by this common order. 3. The facts of the case in brief are that the appellants are engaged in the manufacture of bodies of motor vehicles. For this purpose the appellants get duty paid chassis of motor vehicles of Headings 87.01 to 87.06 of the CETA on which they build bodies. The appellants submitted a classification list effective from 24-9-1992 in which they claimed class....
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....peals) also held that the benefit of Notification No. 175/86-CE which was applicable only to goods falling under Heading 8707 was not admissible to the appellants. 3A. Shri K.K. Anand, learned Advocate appearing for the appellants submitted that Chapter Note introduced in 1991 does not change the position. As this Chapter Note does not seek that the goods classifiable under Heading 87.07 shall be classifiable under Chapter Heading 87.01 to 87.05. The learned Counsel submitted that the appellants nowhere contended that the activity of body building does not amount to manufacture. On the contrary the learned Counsel submitted that the bodies built by independent body builders fall under Chapter Note 8707. The learned Counsel stressed ....
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....ed to the decision of the Madhya Pradesh High Court in the case of Coach Builders (P) Ltd. reported in 1992 (43) ECR 396 = 1992 (58) E.L.T. 471 (M.P.) wherein it was held that body building on chassis is manufacture of motor vehicles under Central Excise Tariff Act and that body building on chassis falls under 87.07 and that SSI exemption under Notification 175/86-CE was admissible to the appellants. The learned Counsel submitted that [bodies] built on chassis of motors by the appellants were classifiable under Heading 87.07 and were eligible for benefit of exemption Notification No. 175/86-CE. 4. Shri A.T. Usman, learned JDR appearing for the respondent submitted that with the introduction of Chapter Note 3 under Chapter 87 the pos....
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....cle. But this interpretation shall apply only to Chapter Headings 87.01 to 87.05. This clearly shows that if the goods are classifiable under Chapter Heading Nos. 87.01 to 87.05 then if any body is built on the chassis, this building of body shall amount to manufacture of motor vehicle. In the instant case we are not dealing with the goods which already fall under Chapter Headings 87.01 to 87.05. 6. In the case before us, bodies built on the chassis fitted with the engine for motor vehicles are classifiable under Chapter Heading 87.06. The Chapter Heading 87.07 is for bodies (including cabs) for the motor vehicles of Heading Nos. 87.01 to 87.06. The Chapter Note stipulates that if bodies are built or fabricated or mounted or structu....
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....was also contended by the appellants that the show cause notice only alleged that these goods were classifiable under sub-heading 87.01 to 87.05 that specific sub-heading was not mentioned in the show cause notice, for the purpose of classification specific heading is needed. We also observe that the Collector (Appeals) has observed that in terms of Chapter Note 4 under Chapter 87 there is no doubt that building bodies on chassis leads to manufacture of motor vehicles and that such products would be classifiable under Headings 8701 to 8705 depending on the nature and use of the motor vehicles produced and not under Heading 8707. We also observe that the Collector (Appeals) has held that as far as the issue of exact sub-heading raised by the....
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.... is [modelled] on the basis of Entry No. 87.07 of the Harmonised Commodity Description and Coding System and this heading covers wide range of bodies for various types of vehicles. No doubt, Chapter Note 3 clarifies that building a body for purpose of Headings 87.01 to 87.05 amounts to manufacture of motor vehicles, but at the same time, we find that this Chapter Note does not cover the bodies built on chassis fitted with engine which is classifiable under Chapter Heading 8706. Therefore the classification of bodies built by independent manufacturers on chassis is classifiable under 87.06. In this view of the matter, we find that the decisions of the Tribunal cited and relied upon by the appellants regarding the classification of bodies bui....