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2022 (5) TMI 476 - AT - Central ExciseBenefit of exemption - Misclassification of goods - Bulker mounted on chassis fitted with engine - classifiable under Chapter Heading 8704 or 8707 or 8716 or otherwise - eligibility of benefit of exemption as per the Notification No. 6/2006-CE dated 01.03.2006 by classifying their products under Chapter Heading No. 8704 or other otherwise - recovery of duty alongwith interest and penalty - HELD THAT:- It is admitted fact that the appellant‟s customers supply duty paid chassis which are used for production of Bulker which is in the nature of fabricated tanker. The said Bulker specially designed for transport of fly ash which is mounted on duty paid chassis fitted with the engine received from the customers. It is found that the Appellant had classified the said goods under Chapter heading No. 8704 and also claimed the exemption benefits available as per the Notification No. 6/2006-CE dated 01.03.2006. From the Central Excise Tariff heading and chapter Note, it is found that Chapter heading 8704 covers the product Motor Vehicle for the transport of goods and Chapter heading 8716 covers a group of non-mechanically propelled vehicles. Chapter Note 5 to the Chapter 87 creates a fiction whereby building a body or fabrication or mounting or fitting of a structure or equipment on a chassis, falling under Heading 8706, shall amount to “manufacture” of a motor vehicle -. In terms of the legal fiction, since the appellant is mounting or fitting bulkers on the chassis falling under Chapter 8706, Appellant is deemed a manufacturer of motor vehicle and since the said vehicle is used for transportation of goods viz. fly Ash /cement etc, Appellant is a manufacturer motor vehicle falling under 8704. From the description of the articles and the use to which they put, it is found that heading 8704 is the most appropriate. The view taken by the Adjudicating authority that Bulkers mounted on chassis is classifiable under Chapter heading no. 8716 is incorrect. There is no dispute that after fabrication of bulkers appellant undertaking the process of mounting it on chassis and in the same form they were clearing it as complete and integrated motor vehicle for transport goods. Further Chapter heading 8716 would be applicable for fabrication of bodies for trailers /semi-tailers covered under Heading 8716 and these fabrication of bodies would be regarded as bodies for trailer /semi-trailer of Heading 8716 and such bodies would also be classified under Heading 8716.Thus it is quite clear that the disputed goods cannot be classifiable under Chapter Heading 8716. Serial No. 39 of the table annexed to Notification No. 6/2006 motor vehicles for the transport of goods falling under 8704 is exempt from excise duty subject to condition No. 9 which stipulates that the manufacturer does not avail of the Cenvat Credit of duty paid on chassis falling under 8706 or other inputs used in the manufacture of such vehicle - In the present case, it is not in dispute that the appellant has not availed any Cenvat Credit on any of 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. Appeal allowed.
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