TMI Blog2000 (4) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2/99, dated 12-1-1999 confirmed the demand of duty for a period of six months only (duty to be worked out by the Assistant Commissioner) and imposed penalty on both the appellants, holding that they are not manufacturer of motor vehicles under Headings 87.02/87.04 in view of the judgment of the Supreme Court in the case of C.C.E. v. Ram Body Builders, 1997 (94) E.L.T. 442 (S.C.); that the activity of fabrication of bodies on the chassis merits classification under Heading 87.07; that once the Apex Court has decided an issue, the same is binding on the lower Adjudicating Authorities. Hence Appeal Nos. E. 652 712/99-B. 2.2 The Commissioner, under impugned Order No. 17/99, dated 30-7-1999, confirmed the demand of duty amounting to Rs. 7,34,27,398/- against M/s. Haryana Roadways Engg. Corpn. Ltd, Appellant No. 3, and imposed a penalty of equal amount under Section 11AC of the Central Excise Act, relying upon the decision in Ram Body Builders case, supra, and holding that the Appellant No. 3 had not produced any material evidence to establish that the issue involved in appeals before the Supreme Court was not the same issue; that the case against them was of misclassification and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was rendered in the context of the Tariff as it stood prior to 25-7-1991 when there was no Note 3 to Chapter 87 existing in the Tariff, that is there was no deeming definition treating the activity of fabrication of body on the chassis as amounting to manufacture of motor vehicle; that for cases pertaining to the period after the introduction of Note 3, the judgment of the Supreme Court may have no application. He also referred to the Circular F. No. 156/8/98-CX. 4, dated 22-3-1999, issued by the Department of Revenue, clarifying that for the period after 25-7-1991, the classification shall be governed by the Note 3 and not by the Supreme Court decision in Ram Body Builder s case. 4. The Learned Counsel finally referred to the decision in the case of Kamal Auto Industries v. C.C.E., Jaipur, 1996 (82) E.L.T. 558 (T) which also considered the effect of Note 3 to Chapter 87. He mentioned that the Tribunal held in that case that if the goods are classifiable under Chapter Heading Nos. 87.01 to 87.05 then if any body is built on the chassis, this building of body shall amount to manufacture of motor vehicle. In the instant case we are not dealing with the goods which already fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; that the C.L. was duly approved by the Assistant Collector; that as per Notification No. 63/93, their manufacturing activity became eligible for full exemption and as per Notification No. 14/92 (N.T.), dated 14-5-1992, they were not required to continue registration, they surrendered the Registration Certificate and filed a refund claim for balance lying in P.L.A.; that the refund was sanctioned on 29-3-1995 by the Assistant Collector by passing Order No. 41/95. He emphasised that the Appellant No. 3 had never claimed classification of their body building activity under Heading No. 87.07 and as such they had not changed their stand as claimed by the Commissioner in the impugned Order; that demand could not have been confirmed for the extended period of limitation as the fact of body building was in the knowledge of the Department, as also admitted by the Commissioner in the impugned Order; that penalty under Section 11AC cannot be imposed in so far as it relates to the duty demand prior to 28-9-1996 in view of the decision in Maruti Udyog Ltd. v. CCE, 1998 (101) E.L.T. 675 (Tribunal) = 1998 (25) RLT 246; that even for the period from 28-9-1996 onward, Section 11AC cannot be invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in the process of manufacturing an end-product cannot possess the attributes of production of the end product. The only conclusion that can be drawn is that the body building is not the same as the manufacture of complete motor vehicle . 7. The Apex court, in CCE v. Ram Body Builders, 1997(94) E.L.T. 442 (S.C.) confirmed the decision of Pubjab Haryana High Court that the bodies which are built on chassis supplied by the customers would fall under Heading No. 87.07 and would be entitled to exemption from excise duty. The government inserted the following Note 4(Now Note No. 3) to Chapter 87 : For the purposes of heading Nos. 87.01 to 87.05, the activity of body building of fabrication or mounting or structures or equipment on the chassis shall amount to manufacture of a motor vehicle. We are in agreement with the learned Advocates that after insertion of this Note, law has been changed. A deeming provision has been provided in law by which the activity of body building on the chassis shall amount to manufacture of a motor vehicle falling under headings 87.01 to 87.05. The Commissioner was not justified in presuming, in the impugned orders, that it cannot be believed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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