2015 (12) TMI 224 - CESTAT MUMBAI

Manufacture - scope of the term automobile - activity of packing/re-packing, labelling/re-labelling and fixing of MRP on automobile parts amounts to manufacture - Classification - Valuation of goods u/s 4 or 4A - MRP based valuation or transaction value - Confiscation of goods - Redemption fine - Held that:- Just because such automobiles have machinery aspect which helps them use in the construction and mining industry, will not take them away from the term automobile. The assistance provided by the Commissioner (AR) is of great help and fully supports the conclusions already drawn by this Tribunal in the case of JCB India Ltd (2014 (2) TMI 632 - CESTAT MUMBAI) - whether the equipment is made of rubber tyre or crawler type/steel drum wheel mounted will not make any difference.

The judgment of the hon'ble Supreme Court in the case of Ratan Melting & Wire Industries (2008 (10) TMI 5 - SUPREME COURT OF INDIA) further strengthens the decision taken by this Tribunal relating to the circulars. We also note that the purpose of judicial scrutiny in taxation matter is to reach to the truth of the matter and in reaching to the truth, incorrect interpretation taken by some authority cannot supersede the judicial decision on the issue. We also agree with the Commissioner (AR) that even the circular of 2008 was not binding circular and it would be seen from the circular that it is only suggestive and is not a conclusive or directive circular.

We also note that large number of such parts, components and assemblies are interchangeable in different road vehicles including construction equipment vehicles. Thus wider meaning to the term automobile is to be given.

Scope of the term Manufacture - deemed manufacture - Held that:- the argument that putting a tag is not labelling or there is absence of container, etc., in our view, will defeat the purpose of definition given in Section 2(f)(iii). In view of the said position, we hold that even putting the tag on the unpacked parts will amount to manufacture and will be covered under Section 2(f)(iii).

For determining whether a particular process amounts to manufacture it is not relevant whether the inputs are locally produced or imported. What is important is the end product and whether the manufacturing process amounts to manufacture or not. In the present case, there is no dispute that the activity undertaken by the appellant amounts to manufacture under Section 2(f)(iii). The fact that inputs were imported is immaterial and hence the submission made by the learned senior counsel is rejected.

Extended period of limitation - Held that:- Appellant were aware of the fact that the goods are covered under Section 4A. The ratio of JCB India Ltd. case (supra) as far as invocation of limitation and penalty, is therefore, not applicable. In that case, M/s. JCB India Ltd. has started paying duty from April 2010. In the present case, even that was not done. Extended period of limitation as also imposition of penalty under Section 11AC is upheld.

Valuation - As per the said explanation to section 4, in the facts of the present case, the appellant would be entitled to cum-duty benefit. We accordingly extend the same and set aside the impugned order as far as the benefit of cum-duty is concerned.

Cenvat Credit - Keeping in view these facts and the fact that the matter was not examined by the Commissioner we remand the matter for the limited purpose of examining these documents regarding admissibility of CENVAT credit as per law and in case the appellant is eligible for CENVAT credit the same should be extended.

Decided substantially against the assessee.