TMI Blog2017 (6) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... g 8706. Such activity is deemed to be manufacture of a motor vehicle in terms of the above chapter note. A plain reading of the chapter note alongwith the relevant tariff headings makes it clear that the product cleared by the appellant after body building activity is a “manufactured” motor vehicle. Considering the nature of motor vehicle, which is for transport of goods, the same has to be classified under Heading 8704 - the claim of refund under Rule 5 of CCR, 2004 in Automobile Corporation of Goa Ltd. vs. CCE, Goa [2011 (9) TMI 399 - CESTAT, MUMBAI] held that the independent body builders are manufacturers of body on their own account and, hence, are to be considered as manufacturers of motor vehicle. CENVAT credit - availment of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notification provided exemption to motor vehicles for transport of goods falling under Chapter 87 of the Tariff, subject to the condition that no credit of duty paid, on chassis and other parts used in the manufacture of such vehicle, has been taken as per Cenvat Credit Rules, 2004. The Revenue entertained a view that the appellants are engaged only in building or fabricating bodies on the chassis and they do not manufacture motor vehicle but only bodies of motor vehicle. These were classifiable under Central Excise Tariff Heading 8707 and not under 8704 as claimed by the appellant. Accordingly, proceedings were initiated against the appellants which resulted in the confirmation of demand of Central Excise duty by denying the exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %/6% under Rule 6 of Cenvat Credit Rules is not sufficient compliance of condition under the notification which submitted that credit shall not be availed on the inputs. It is submitted that the appellants have not availed credit of duty paid on chassis and regarding other inputs which were used for both dutiable and exempted goods, they have duly reversed credit attributable to inputs used in the manufacture of exempted goods. Relying on various decided case laws, the appellant submitted that such reversal will amount to non-availment of credit. 4. The learned Counsel further submitted that this issue relating to correctness of credit reversal was not subject matter of show cause notice and the Original Authority gave a finding on the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Admittedly, the appellants were building bodies on the chassis classified under Heading 8706. Such activity is deemed to be manufacture of a motor vehicle in terms of the above chapter note. A plain reading of the chapter note alongwith the relevant tariff headings makes it clear that the product cleared by the appellant after body building activity is a manufactured motor vehicle. Considering the nature of motor vehicle, which is for transport of goods, the same has to be classified under Heading 8704. 8. The Original Authority relied on various decisions of the Tribunal as affirmed by the Hon ble Apex Court. We have carefully perused these decisions. We note none of these decisions dealt with the scope of Chapter Note 5 as ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers of motor vehicle. Similar view has been recorded by the Hon ble Supreme Court in CCE, T.N. Vs. Vinayaga Body Building Industries Ltd. reported in 2008 (224) E.L.T. 3 (S.C.). 9. On the second issue regarding availment of credit on inputs used by the appellants we note that they have reversed credit attributable to inputs used in manufacture of exempted goods. Apart from the legal issue raised by the appellant that this point was not a subject matter of show cause notice, we note that it is a settled position that reversal of credit amounts to non-availment. We find force in appellant s reliance on various decided cases CCE, Mumbai I Vs. Bombay Dyeing Mfg. Co. Ltd. reported in 2007 (215) E.L.T. 3 (S.C.), Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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