TaxTMI 
TaxTMI 
2017 (7) TMI 522
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....s Ltd., Hyderabad (hereinafter referred to as M/s. BDL ). (2) P-II Missile Launcher (P-II ML) for Bharat Earth Movers Ltd., Bangalore (hereinafter referred to as M/s. BEML ). The above two items were classified by the assesse under Chapter Heading 8428.00 of the Schedule to the Central Excise Tariff Act, 1985; and (3) Launching Mechanism (LM) and cleared to Research and Development Establishment (Engineers), Ministry of Defence, Dighi, Pune (hereinafter referred to as M/s. RDE) and the item was classified under Chapter Heading 8425.00 of the Schedule to the Central Excise Tariff Act, 1985. 2. Proceedings had been initiated by the Department against the appellant alleging the following:- (1) that for manufacturing the IMML, P-II ....
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....lty of Rs. 2 lakhs under Rule 25 of the Central Excise Act, 1944. Hence this appeal. 3. On 31.05.2017 when the matter came up for hearing, Ld. Advocate Shri. S. Muthu Venkataraman, reiterated the grounds of appeal and also placed further submissions which are summarized as follows:- (a) With regard to Integrated Mobile Missile Launcher (IMML) & P-II Missile Launcher [(a) & (b)] appellants had accepted the classification under 8705.00 and stated that they are eligible for benefit of Sl.No. 217 of Notification No. 6/2002-CE dated 01.03.2002. Sl.No. 217 exempts from the whole of duty leviable subject to condition No.55. Condition 55 prescribes that * The product should have been manufactured out of chassis and equipment * The Ex....
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.... self-propelled vehicles and not in the instant case. Note 3 to Chapter 87 deems mounting of machine onto motor vehicle as manufacture. There is no such provision in Chapter 84. 4.1 On behalf of the department Ld. AR Shri A. Cletus, ADC submits the following:- (i) The claim of the appellant for benefit of Sl.No. 217 of Notification No. 6/2002 dated 01.03.2002 cannot be accepted since the product has been manufactured out of chassis manufactured for the vehicles of heading No. 8705; however, the appellants have not proved that they have paid duty on chassis as well as on the equipments. (ii) Although the assessees have argued that vehicles along with Missile Launcher also a special purpose vehicle meriting classification under CSH 8....
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....ading Description of goods special purpose Rate under I Schedule Rate under II schedule Condition No. 217 8705 M. Vehicle Nil Nil 55 condition No. 55 : If manufactured out of chassis and equipments on which duty of excise leviable under the first schedule or the additional duty leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has already been paid. 5.3 The allegation of the department is that excise duty has not been paid on the chassis and on the equipment. In respect of chassis, appellants themselves concede that the vehicles supplied by BEML were exempt from central excise duty in terms of Notification No. 63/95 dated 01.03.1995. However, they contend that cleara....
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.... 8425. It is thus seen that the appellant themselves are changing their stance on the classification. On the other hand, we find that the adjudicating authority has very cogently analyzed this very aspect in para 16.3 of his order which (page- 34-36 of the appeal paper book) as follows: "The LM is a mobile machine. As per the explanatory notes to CSH No. 8426, the heading cover self propelled machine in which the propelling base, the operating controls, the working tolls and their actuating equipment are specifically designed for fitting together to form an integral mechanical unit and it would apply to a propelling base resembling a tractor, but specially designed, constructed or reinforced to form an integral part of a machine. As I fi....
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....issile Launcher, they had included the value of chassis, however, in respect of clearances to BDL they have not done so. The law is very clear that when design and drawings are intrinsically tied to the emergence of the final product and without which the intended goods cannot be conceived or manufactured, the intrinsic value of such design and drawing charges will necessarily be required to be added for the purpose of determining assessable value of the goods that have emerged neutralizing the same. 5.7 Viewed in this light, we do not find any infirmity in the finding of the adjudicating authority in para-17 of the impugned order that value of chassis/vehicles and design and drawing charges, since amounting to additional consideration, ....