TaxTMI 
TaxTMI 
2024 (6) TMI 1535
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....Commissioner of Central Excise, Thane-I, Mumbai. 2.1 Briefly stated, the facts of the case are that the appellants, inter alia, are engaged in manufacture of excisable goods i.e., trailers, semi-trailers and bulkers classifiable under Chapter 87 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants have their manufacturing unit set up in 2003, located at Unit No.1 at B-73 at Additional MIDC Industrial area, Anand Nagar, Ambernath (East); further, in September, 2009, one more additional unit was set up as Unit No.2 at B-135 of the same Additional MIDC Industrial area, Anand Nagar, Ambernath (East). For the purpose of payment of Central Excise duty on final products and for compliance with the Central Excise statute the appellants had registered with the jurisdictional authorities holding Central Excise Registration No. AAECM6529RXM001. Subsequently, the appellants vide their letter dated 14.09.2009 informed the department about their requirement of additional manufacturing facility and requested to add the new additional premises acquired by them at B-135 of the same Additional MIDC Industrial area, Anand Nagar in their Central Excise Registration certifica....
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....ppeals before the Tribunal. 3.1 Learned Advocate appearing on behalf of the appellants had submitted that appellants have their manufacturing unit set up in 2003 as Unit No.1 at B-73 and in September, 2009 had created an additional manufacturing facility at Unit No.2 at B-135 at Additional MIDC Industrial area, Anand Nagar, Ambernath (East) due to space constraints faced by them at Unit No.1. The products manufactured by the appellants include 'semi-trailer' or 'trailer' which are non-mechanically propelled vehicle that is designed to be towed by other vehicles (prime mover). These trailers can be fitted with a body to carry goods. Trailers are classified by the appellants under heading 87.16 and are cleared on payment of appropriate Central Excise duty by them. There is no dispute on clearance of such products in the present case. The product 'bulker' is the chassis fitted with the tank and a cab mounted over it; and the entire arrangement becomes a vehicle which is known as 'bulker'. The bulkers are used for the transport of cement, fly ash etc. and are classified by them under heading 8704. 3.2 Learned Advocate further stated that appellants manufactured certain bulk....
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....ayment of Excise duty, since the bulker is manufactured out of duty paid chassis supplied by their customer, and no CENVAT credit of duty paid on such chassis is taken by the appellants, in compliance with condition No.9 of the Notification No.06/2006-C.E. dated 01.03.2006. Furthermore, he stated that bulkers are nothing but a vehicle classifiable under Chapter 87. Therefore, he submitted that the exemption claimed by the appellants is correct and there was no requirement for payment of Central Excise duty on clearance of such bulkers. 3.4 Learned advocate also stated that the interpretation of the department that the body of bulker is manufactured at unit No. 2 and thereafter brought for mounting on the top of the chassis in Unit No.1 and thus, such bulkers are not manufactured out of the duty paid chassis supplied by the customers, is incorrect. This is for the reason that their unit No. 2 is engaged in manufacture of tubular structure, which is required to be further worked as explained in the above paragraphs at unit No. 1 in order to make it a complete body of the bulker, to be fitted on the chassis supplied by their customers. As such tubular structures are neither m....
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....sented in the form of paper books for this case. 6. The issues involved in these appeals are as follows: (i) whether the revised classification of excisable goods determined in the impugned order for 'bulker' under Central Excise Tariff Item 8707 9000, 8716 3100 of the Central Excise Tariff Act, 1985 are legally sustainable or not? and whether the classification adopted by the appellants under CETI 8704 2390 is appropriate or not? (ii) whether the appellants are eligible to exemption from payment of central excise duty in respect of disputed clearances of goods, under Notification No.6/2006-C.E. dated 01.03.2006, under Serial No.39 along with conditions laid down therein, or otherwise; and (iii) whether the differential duty demands confirmed in the impugned order under Section 11A ibid by invoking extended period of limitation and penalty imposed under Section 11AC ibid on the appellants company and penalty under Rule 25, 26 of the Central Excise Rules, 2002 on the appellants is sustainable or otherwise? 7. In order to address the above issues relating to classification of excisable goods, eligibility to exemption notification benefit, invoki....
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....(b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty,- then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse, or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or two thousand rupees, whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice. Rule 26 . (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, a....
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....gs each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein : (a) camera case....
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.... section 3 or section 4 or section 4A of the Central Excise Act, 1944 (1 of 1944), the duty being equal to such percentage of the value as is indicated in that column. ADDITIONAL NOTES In this Schedule, - (1) (a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) "tariff item" means a description of goods in the list of tariff provisions accompanying either eight-digit number and the rate of the duty of excise or eightdigit number with blank in the column of the rate of duty; (2) the list of tariff provisions is divided into Sections, Chapters and Sub-Chapters; (3) in column (3), the standard unit of quantity is specified for each tariff item to facilitate the collection, comparison and analysis of trade statistics. "SECTION XVII ....
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....p; xxx 8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars xxx xxx xxx xxx 8704 Motor vehicles for the transport of goods 8704 10 - Dumpers designed for off-highway use: 8704 1010 -- With net weight (excluding pay-load) exceeding 8 tonnes and maximum pay-load capacity not less than 10 tonnes 8704 1090 --- Other : - Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel): 8704 21 - g.v.w. not exceeding 5 tonnes: 8704 2110 --- Refrigerated 8704 2120 --- Three-wheeled motor vehicles 8704 2190 --- Other 8704 22 -- g.v.w. exceeding 5 tonnes but not exceeding 20 tonnes : --- Lorries and tru....
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....product, or, any process which is specified in relation to any goods in the Section or Chapter notes of the First schedule to the Central Excise Tariff Act as amounting to manufacture, applied on the goods can also be subject to levy of central excise duty. Furthermore, it also transpires that the rate of duty at which a commodity is subjected for levy of Central Excise duty is determined as per the unique classification of such commodity under specific heading/sub-heading/tariff item provided under the First Schedule. 8.2 Classification of the excisable goods are based on the Schedule to the Central Excise Tariff as given under the Central Excise Tariff Act, 1985. Central Excise classification had initially followed Six-digit classification code until 2003 and was broadly based upon HSN (Harmonized System of Nomenclature) classification. However, there were a number of differences with HSN classification and as such the 6-digit classification was not totally aligned with HSN, on the basis of which Customs Tariff has been designed. Eight-digit HSN based Commodities Classification Code was adopted for the purpose of levy of Customs duty with effect from 01.02.2003. Same eig....
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....iff item 8707 9000; (iv) 'Trailers and semi-trailers' and other vehicles that are not mechanically propelled are covered in heading 8716; while 'tanker trailers' and 'tanker semi-trailers' are specifically covered under tariff item 8716 3100. 8.4 From the facts on record it clearly transpires that the classification of items under dispute are 'bulkers'. In the SCN, the contending classification as per the claim of the appellants is CETI 8704 2390, whereas the department has claimed classification under sub-heading 8707. In the impugned order, besides rejecting the classification claimed by the appellants, the adjudicating authority had specified two classifications one under CETI 8707 9000 for bulkers mounted on duty paid chassis supplied by customers and CETI 8716 3100 for bulkers attached to or fitted on trailers. Since the SCN had not proposed for classification of disputed goods under CETI 8716 3100, we find that it would be out of the purview of the adjudication proceedings to discuss about such classification. Therefore, we are not examining such classification hereunder. Therefore, the contending classification are between tariff item 8707 9000 and 8704 2390.&nbs....
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....c interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table given below read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading or sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), as are given in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions specified in the Annexure to this notification, and condition number of which is referred to in the corresponding entry in column (5) of the Table aforesaid: Provided that nothing contained in this notification shall apply to goods specified against S.No. 10 of the said Table on or after the 1st day of May, 2007. Explanation. - For the purposes of this notification, the rates specified in columns (4) of the said Table are ad valorem rates, ....
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....lfilled by the appellants. 9.3 We also find that the Notification No.214/89-C.E. dated 25.03.1986 provide for exemption for manufacture of specified finished products under job-work arrangement by using the specified raw material/semi-finished goods, mentioned in the Table to the notification. The condition to be fulfilled for availing such exemption is that the supplier of raw materials to a job worker undertakes the responsibility for discharging the central excise duty liability on the finished products. In the present case, since both the unit-1 and unit-2 are under the same manufacturer, and there is no job-work arrangement in this case, there is no question of the application of such notification to the present situation arises to deny the exemption available in other notification No.06/2006-C.E. dated 01.03.2006. 9.4 We also find that there is no independent evidence established or documents produced by the department to invoke the ground of suppression with an intent to evade duty, and therefore we find that there is no case made out in terms of the settled legal position for confirmation of the duty demands by invoking the extended period of limitation. Further, sinc....
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....t, 1944. (v) Penalty should not be imposed under Rule 25 of the Central Excise Rules, 2002. The adjudicating authority after considering the submissions made by the appellant re-quantified the demand and confirmed duty demand of Rs. 30,60,884/- along with interest and penalty vide OIO dated 22-12-2011. Aggrieved by the said order, Appellant filed appeal before the Commissioner (Appeals), and Commissioner (A) vide impugned order under challenge upheld demand of duty and classified all goods under Chapter 8716. Hence, the present appeal. 4.2 In order to appreciate the issue and proper classification of the goods viz. Bulker mounted on duty paid chassis we reproduce the relevant chapter heading No. 8704, 8716 and Chapter Note 5 to Chapter heading 87 as under : Heading No. Description of Goods 1 2 8704 Motor vehicles for the transport of goods 8716 Tailers and Semi- trailers; other vehicles, not mechanically propelled, parts thereof Chapter Note 5 to Chapter heading 87 5. For the purpose of the this Chapter, building a body or fabrication or mounting or fitting of structures or equipment on the chassis falling under h....
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....the inputs which have been used in the manufacture of either the bulkers or the duty paid on the chassis and therefore, the appellant would be entitled for the benefit of exemption under the said Notification vide Serial No. 39. Therefore, there would not be any duty liability on the appellant on the bulkers manufactured and captively consumed in the manufacture of motor vehicle falling under Chapter 8704. 5. In view of the discussion and analysis as above, we find merit in the appeals filed by the appellant and hold the impugned order as unsustainable. Accordingly, the same is set aside. The appeal is allowed." 11. We further find that in the case of AMCL Machinery Ltd. (supra), the Co-ordinate Bench of the Tribunal had examined the identical issues under dispute, in greater detail and have held that bulkers are rightly classifiable under tariff item 8704 2319 and are eligible for exemption under Notification No.06/2006-C.E. dated 01.03.2006. The relevant paragraphs of the said decision of the Tribunal is extracted and given below: "7. Heard both sides and perused the records. The issue involved for determination is whether the bulkers fabricated and mounted b....
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.... the said High Court as reported in 1990 (47) E.L.T. 532 (P&H) has held that "the person who only made or fabricated bodies for buses and trucks on the chassis supplied by their customers do not manufacture motor vehicle but they manufacture only bodies of motor vehicles and their chassis are fully covered by Heading 87.07". Thereafter Note 3 was inserted in Chapter 87 of the Central Excise Tariff which provided that "for the purpose of Headings 87.01 to 87.05, the activity of body building or fabrication or mounting or fitting of structures or equipment on the chassis shall amount to manufacture of motor vehicle." This Chapter Note came up for consideration before the Tribunal in the case of Kamal Auto Industries v. CCE, Jaipur 1996 (82) E.L.T. 558 (T) wherein the Tribunal held that the said Chapter Note does not cover the body building on chassis fitted with engine which is classifiable under Heading 87.06 and the body building on chassis fitted with engine are classifiable under Heading 87.06 and the body building on chassis fitted with engine are classifiable under Heading 87.07. This decision of the Tribunal was affirmed by the Supreme Court as the appeal filed by the Revenue ....