Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2018 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 916 - AT - Central ExciseReceipt of motor vehicle chassis due to various defects - Revenue entertained a view that the processes undertaken by the appellant on such returned chassis will not amount to manufacture of any new item - applicability of rule 16 of CER - can there be a total dismantling and re-manufacture of such duty paid motor vehicle cleared in the form of chassis with all the requirements of engine, transmission system? Held that: - there is no total dismantling and re-manufacture of the impugned goods in the premises of the appellants. There is no supporting evidence to that effect. In fact, we have all the indications to show that only replacement of various components, though critical has been undertaken. These are engine, gear box, steering system, axles etc. These are no doubt critical components of a motor vehicle. But replacement of such items will not amount to manufacture of motor vehicle. There is no ambiguity regarding the procedure to be followed by an assessee under Rule 16. Admittedly, the appellants did follow the procedure under Rule 16 in so far as re-credit availed upon return of defective goods. They did observe the procedure as per the Trade Notice 108/LTU dated November, 2008 issued by Commissioner, LTU. We are dealing with a part of provision of Rule 16 (2). Having held that the appellants did not undertake any processes amounting to manufacture, we note the said Rule will apply in full force. Regarding the claim of the appellants that certain numbers of returned chassis upon removal of defects, have been cleared either on physical exports out of country or to supply to EOU or supply under N/N. 108/95 - Held that: - these products irrespective of the dispute under Rule 16 are otherwise eligible for clearance without payment. These can be verified from the documentary support that will be produced by the appellants - matter on remand. Penalty u/r 25 of CER - Held that: - there is a case for the appellants for claiming interpretation of the provisions of Rule 16 - penalty not justified. Appeal allowed in part - part matter on remand.
|