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2009 (5) TMI 426 - AT - Central ExciseValuation- firms, are registered manufacturer of excisable goods i.e. motor vehicles and they are engaged in fabricating and mounting the bodies of buses and trucks on the chassis manufactured by M/s. Eicher Motors Limited as well as M/s. Tata Motors Limited. The body building activity is being carried out by the said firms on the automobile chassis supplied free of cost by the manufacturers namely M/s. Eicher Motors Limited and M/s. Tata Motors Limited and for the purpose of body building activity, the raw materials are also procured by the said firms from the vendors identified by the manufacturers of automobile chassis. The manufacturers of automobile chassis had been discharging duty liability on the value arrived at in accordance with the provisions of Section 4(1)(a) of Central Excise Act, 1944 hereinafter called as “the said Act” as revealed from the invoices and challans issued by them but do not charge sales tax at a time the chassis are delivered to the said firms. The said firms avail Cenvat credit in relation to the duty paid on the chassis by the automobile chassis manufacturers and undertake the fabrication and mounting activity. The said firms pay the duty as per the provisions of Rule 11(8) of the said Rules, worked out on the basis of fabrication and mounting on the chassis supplied free of cost by the manufacturer of chassis. Show Cause Notice issued on the grounds that the vehicle were being manufactured by the same firms on job work basis and as soon as the excisable goods were cleared from their premises as the vehicles, the same are to be assessed in terms of Rule 10A of the said Rules. Held that- In the facts and circumstances of the case, it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6, therefore, do not find any illegality in the impugned order as far as the demand of duty and interest payable thereon from the appellants. But no penalty can be imposed. The appeals partly succeed.
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