TMI Blog2007 (8) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... are as follows: 2.1 The appellants are engaged in the manufacture of motor vehicles and motor vehicle chassis falling under Chapter 87 of the Central Excise Tariff Act. The appellants inter alia cleared the goods manufactured by them to the vehicle factory at Jabalpur in terms of an agreement entered into with the Ordnance Factory Board. The appellants have various divisions within their factory for the manufacture of various components of the vehicle or the chassis. The appellants assemble these individual components in order to obtain the motor vehicle or the chassis of the motor vehicle. 2.2 The appellants entered into an agreement dated 4-9-98 with the Ordnance Factory Board for the supply of motor vehicle chassis in CKD/SKD condition. The agreement was thereafter further amended by supplementary agreement dated 7-8-01. 2.3 The appellants thereafter further received separate purchase orders from the vehicle factory, Jabalpur from their two divisions namely the EMM (Engine Frame Cabs) and TMM (Gear Boxes and Axles). These two divisions of the Vehicle Factory, Jabalpur (for short VFJ) issued separate purchase orders for supplies of various parts. These purchase or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, spare parts and other materials as required and ordered for manufacture of Motor Vehicles by VFJ and their subsequent repairs and maintenance. Thus, the agreement was not for supply of vehicle. 2.7 The appellants were initially claiming the classification of the various parts cleared by them as a complete motor vehicle chassis under sub-heading 8706.42. The appellants did not look into the correct classification of these parts since there was no duty implication. Consequent to the amendment in the budget 2003-04, a series of correspondences was entered into by the appellants and the vehicle factory, Jabalpur, as regards the correct classification of the various parts cleared by the appellants. The Vehicle Factory, Jabalpur in their letters addressed to the appellants contended that the correct classification of the various components cleared by the appellants which did not have an engine fitted thereto, will be as parts of the vehicle under sub-heading 8708.00 and not as a chassis under sub-heading 8706.42. The Vehicle Factory, Jabalpur also referred to similar such clearances made by other competitors of the appellants like M/s. Ashok Leyland Ltd. in order to support their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading 8708. The notice relied upon the fact regarding the similar clearances being made by the appellants for exports as a motor vehicle chassis. The notice further relied upon the clarifications issued by the Board to contend that the classification of the product will be under 8706.42 and not 8708. The show-cause notice proposed to demand duty at the rate of Rs. 10,000/- per unit in respect of 1408 units cleared by the appellants to the Vehicle Factory, Jabalpur during the period from 15-9-05 to 30-11-05. 2.13 The appellants filed a detailed reply dated 27-3-06 challenging the show-cause notice on various grounds contending therein that the correct classification of the goods cleared will be under heading 8708 and not 8706. 2.14 The appellants further addressed a letter dated 4-4-06 in response to the corrigendum issued to the show-cause notice on 29-3-06. 2.15 The appellants were granted an opportunity of personal hearing pursuant to which the appellants filed a detailed written submissions reiterating the submissions made in the reply and also challenging the show-cause notice on additional grounds. 2.16 The Commissioner of Central Excise, Jamshedpur by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Company on different dates over a period of time. For the purpose of applying Rule 2(a) of the General Interpretative Rules, it is necessary that the goods must be presented together for enabling classification of the goods in question as a complete article. The said Rule 2(a) reads as follows : "2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled." 6. The expression "as presented" appearing in the aforesaid Rule is of vital importance. The Rule has been borrowed from the H.S. based Customs Tariff and hence the goods as presented to Customs for assessment in the course of entry/exit becomes a relevant factor for applying Rule 2(a). In the context of Central Excise Tariff, a more appropriate expression would have been "as cleared" but the expression "as presented" appearing i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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