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2023 (12) TMI 562 - CESTAT NEW DELHIClassification of goods - OEM delivery vans - merit classification as delivery vans falling under Excise Tariff Item [ETI] 8704 21 90 or as ambulance under ETI 8703 33 92 of the Central Excise Tariff Act 1985? - penalty - HELD THAT:- It needs to be noted that the effective rate of central excise duty on Traveller Van is lesser then Traveller Ambulance Van and it is for this reason that the department alleges that Force Motors with an intent to evade payment of duty connived with GVK Research Institute and mis-classified the vehicles as Traveller Delivery vans instead of ambulance vans - On the basis of the tenders received and after the tender Committee scrutinized the bids, Bafna Healthcare Pvt. Ltd., Faridabad was found to be the lowest bidder and accordingly purchase orders dated 30.03.2009, 04.05.2009, 12.08.2009 and 17.09.2009 were placed on them. Copies of the purchase orders placed on Bafna Healthcare for conversion of Force Traveller Van No. 3350 mm WB into Emergency Response Van have been enclosed. The Commissioner, after noticing that though the vehicles at the time of delivery could not be used as ambulances and they had been modified subsequently, proceeded to hold that the vehicles supplied by Force Motors “were incomplete or unfinished vehicles having the essential characters of complete or finished ambulance” and thus would be classifiable under ETI 8703 33 92 in view of the provisions of rule 2(a) of the General Rules of Interpretation. The Commissioner was not justified in drawing such a conclusion. As observed earlier, the goods have to be assessed in the form in which they are presented at the time of clearance and not in the form they may ultimately take. The vehicles at the time of clearance did not have the essential character of an ambulance. What was purchased were bare delivery vans without any fittings. It cannot, therefore, be said that the vans had the essential character of an ambulance. Rule 2(a) of the General Rules for Interpretation would not come to the aid of the department. The order passed by the Commissioner classifying the vehicles under ETI 8703 33 92 of the First Schedule to the Tariff Act cannot, therefore, be sustained. Penalty - HELD THAT:- The penalty imposed upon the other appellants also cannot be sustained. It would not be necessary to examine the contention raised by the learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the case The order dated 28.06.2021 passed by the Commissioner is set aside - Appeal allowed.
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