2014 (11) TMI 964

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....ated 01.03.2006 and Sl. No. 276/2012 CE dated 01.03.2012. Penalty equal to the duty demand has also been imposed. 2. The duty demand has been confirmed on the following grounds:         * The appellants during the period from May 2009 to July 2012 have undertaken body building activity on the duty paid chassis falling under CH 8706 supplied by M/s Volvo India Pvt. Ltd., which has resulted in the manufacture of motor vehicles viz., 'Volvo brand passenger Buses' falling under Chapter heading 8702 1092 of CETA, 1985;        * As per Note 5 under Chapter 87 of the Central Excise Tariff Act, 1985, building a body or fabrication or mounting or fitting of structures or equipment o....

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....nbsp;      * The VIPL were also operating under a Master Agreement entered with 'AB Volvo (publ)', Sweden for the manufacturer of various Volvo products in which VIPL and its affiliates have for many years been engaged in the business of the design, development, manufacture, assembly and sale of motor vehicles;         * As per Appendix-I to the Master Agreement, a list of Group of Companies of 'AB Volvo (publ)' Sweden with indication of the 'percentage of ownership' has been provided and under the said list the Appellants have been shown as a company in which 'AB Volvo (Publ)', Sweden has 100% ownership;          * It is clear from various....

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.... the allegation that the ownership of the impugned chassis is within the group;          * By virtue of the conditions in the Notification No. 6/2006 dated 1.3.2006 and Notification No. 12/2012-CE dated 17.3.2012, the benefit is available only to the independent body builders who are in no way connected with the chassis manufacturers;       * The Notification is intended to benefit the 'small players' engaged in the activity of body building, who can buy chassis from any manufacturer and carry out the body building activity or who mount the bodies on the chassis supplied to them by those who buy only chassis and get the body built by these units;     &nb....

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....company, there is no such transfer of ownership when the transactions of sale takes place between the appellant and the other party in this case. First observation that appellants could not carry out any body building activity for any one else would in our opinion may not be very relevant for the final conclusion. Para 29.3 of the impugned order reads as under:-               29.3 VIPL on the other hand had supplied the chassis manufactured by them to the assessees under 'Chassis supply agreement dated 11th January 2008 and as per the agreement, the assessees were required to procure Volvo Chassis from VIPL. The 'Volvo chassis' as per the agreement means B7R chassis (for int....

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....one company are to be considered as one and there cannot be sale and purchase between the two. We are also unable to understand how the transactions between the two companies result in a situation that ownership of the chassis does not change hands. Even if it remains within the group, it does not mean that the supplier of chassis did not sell the busses to the appellants who built the chassis on the same. The Notification clearly provided exemption when the chassis is sold and body is built on it and no CENVAT credit is taken. The whole case is built on the premise that there cannot be a sale and purchase between two subsidiaries and transfer of ownership does not take place. It is not supported by any statutory provision. The claim that a....