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2009 (8) TMI 671

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..... The short point which arises for consideration in these appeals is whether the appellants are entitled to claim exemption under exemption Notification No. 462/86-CE., dated 9th December 1986 as amended from time to time in respect of the vehicle chassis manufactured by them. 3. The appellants are engaged in manufacture of chassis for motor vehicles covered under Tariff Heading 87.06 of the Central Excise Tariff Act, 1985. The relevant period for these appeals is from 1st January 1995 till December 1995. The appellants cleared the said product on payment of duties while claiming ex emption under the said notification. The respondent thereupon under show cause notices dated 4th August, 1995 , 30th January 1996 and 23rd April 1996 called the appellants to show cause as to why the exemption claimed under the said notification should not be denied and the duty difference should not be recovered with interest and penalty. After hearing the appellants, the original authority namely, Commissioner, Central Excise, Chandigarh disallowed the exemption under the said notification and confirmed the demand to the tune of Rs. 1,66,05,716/- under Section 11A of the Central Excise Act, 1944 and al .....

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..... tor vehicle, holding that the product was classifiable under sub heading 87.06. Apart from the fact that the Department having accepted their claim in that regard on proper adjudication of the issue involved in the matter, it was not open for the department to take contrary view for the subsequent period even in absence of any new fact being brought on record which could justify the department from the view taken earlier in the matter. He submitted that even the Explanation issued by the Government in relation to the Notification 463/86-C.E. dated 9th December 1986, which was also issued on the same lines of the notification in question, discloses that the benefit under Notification No. 463/86 was also available to the chassis and there was no justification to deny the same in the case of Notification No. 462/86. Further, drawing our attention to various letters by the competent authorities, the learned Counsel submitted that the same reveal that the authorities had never distinguished between the chassis with or without the cabin and body for the purpose of granting incentive for manufacture of fuel efficient light commercial motor vehicle with pay load not exceeding 4000 kg. and .....

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..... ssioner of In come Tax, Central Kanpur v. J.K. Charitable Trust reported in 2008 (232) E.L.T. 769 (S.C.). 5. On the other hand, the learned Jt. CDR submitted that the clearance of the product by the appellants was not as a complete motor vehicle but same was cleared as merely chassis and the completion of the body was left to the job worker. Chapter 87 of the Schedule to the Central Excise Tariff Act enlists not only motor vehicle but also parts thereof. Notification specifically states that it relates to light commercial motor vehicles and therefore, it cannot be presumed to relate to the chassis alone. Since the appellants themselves had classified their product as the chassis it is not now open to the appellants to claim the same to be motor vehicle within the meaning of the said expression under the said notification. In order to enable the assessee to avail exemption under notification issued under Central Excise Act or rules made thereunder, a product specified in such notification is to be understood with reference to the entries in the tariff schedule. As regards the contention regarding discriminatory treatment to the appellants, the appellants have merely produced a lette .....

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..... ng into consideration the new facts which might have come to light subsequently 6. The Notification in question reads thus - Exemption to fuel-efficient light commercial motor vehicles. - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts fuel efficient light commercial motor vehicles of payload not exceeding 4,000 kilograms and falling within Chapter 87 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of the duty of excise leviable thereon which is specified in the said schedule as is in excess of the amount calculated at the rate of 10 percent ad valorein. Explanation. - For the purposes of this notification, fuel efficient light commercial motor vehicle means a motor vehicle which satisfies the specific fuel consumption and net-tonne kilometre moved per litre of diesel as specified in columns (3), (4) and (5) of the Table hereto annexed, with fur ther upgradation of kilomeres or net tonne kilomers norms from the date from which such upgraded norms shall be applicable, as specified in column (6) of the said table. and certified accordingly by an officer not below th .....

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..... orms specified in Col. (4) shall be upgraded by 5% with effect from 1-4-1990 2. Commercial Motor Vehicle of pay load exceeding 240 gms. Not applicable 100t 100t 3.4+ 2.7+ 1.53t 2.35t Norms specified in Col. 5 shall be upgraded by 5% with effect from 1-4-1989 Note: Where W is the GVW of the vehicle in tormes and t is the pay load in tonnes NTKMPL - Net Tonne Kilometre Per Litre. 7. The Notification undoubtedly specifically refers to light commercial motor vehicles , and further specifies that the same shall be falling within Chapter 87 of the Schedule to the Central Excise Tariff Act, 1985. The Notification further explains that for the purpose of the said notification, the fuel efficient light commercial motor vehicles means a motor vehicle which satisfies the fuel consumption net-tonne kilometres moved per litre of diesel as specified in column (3), (4) & (5) of the table annexed thereto, with further upgradation of kilometres or net tonne kilometres norms from the date from which such up graded norms shall be applicable, as specified in column (6) of the said table. It further explains that such vehicle should be certified by the authorities mentioned in the said Notification .....

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..... not even road worthy. In the circumstances, therefore, considering the notification and having read it along with provisions of Chapter 87, unless any specific provision is disclosed, it is difficult to accept the contention canvassed on behalf of the Department. 9. It is pertinent to note that even the Govt. while dealing with Notification No. 463/86-C.E., dated 9th December 1986 had understood the same to indude chassis. The Notification 463/86-C.E. dated 9th December 1986 reads thus - In exercise of the powers conferred by sub-rule (l of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts fuel-efficient light commercial motor vehicles of pay-load not exceeding 4000 kilograms and employing injection type of diesel engine and falling within Chapter 87 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of duty of excise leviable thereon which is specified in the said schedule as is in excess of the amount calculated at the rate of 10 per cent ad valorem provided that such motor vehicles are manufactured under the programme approved by them by the Ministry of Industry and Industrial Advisor of Directorate General of Technical .....

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..... different set off facts but also lends support to the contention of the appellants. In the Notification the expression light commercial motor vehicle is neither qualified with restrictions nor with limitation as far as it relates to the description of motor vehicle is concerned, so as to include therefrom the chassis fitted with engine. 13. Then is yet another reason which leaves no scope for us to reject the claim of the appellants. The Department under order dated 8th February 1988 while accepting the claim of the appellants to avail the exemption under Notification in question even in relation to the chassis fitted with engines which were classifiable under sub-heading 87.06 had granted exemption to the chassis cleared by the appellants. Though it is sought to be contended that the decision will not bind the Department to take the same view even for the subsequent period even though some new facts have come to light, the Department has not explained anywhere in that regard about alleged new facts which would justify taking the view different from the one taken earlier in 1988. Undoubtedly, the department is not prohibited from correcting its mistake. If from the records they ar .....

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