Fiat India Ltd vs Commissioner Of Central Excise, Mumbai ...
- CitationAppeal No. E/3068/05
Ratio decidendi
The rule this decision rests on
A motor vehicle that has not been completed for marketability, in that it has not undergone the road testing required before it can be taken on the road and released for sale, and some items remain to be fixed, is not a manufactured good as on 28 February 2003 merely because it is substantially finished; where such a vehicle is cleared after 1 March 2003, it is therefore chargeable to National Calamity Contingent Duty, and the pre-budget exemption for goods manufactured before that date does not extend to it. A penalty imposed under Rule 25 of the Central Excise Rules, 2002, equal in amount to the duty demanded, is set aside where, on the facts of the case, it is not a fit case for imposing penalty, while interest under Section 11AB is upheld.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out Order-in- Appeal No. AT/330/M-II/2005 dated 22.06.2005 passed by the Commissioner of Central Excise (Appeals), Mumbai)
For approval and signature: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S.Garg, Member (Judicial)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes
Fiat India Ltd. Appellant
Vs.
Commissioner of Central Excise, Mumbai II Respondent
Appearance:
Shri Anjali Hirawat, Advocate for the appellant Shri H.M. Dixit, AC (AR) for the respondent
CORAM:
Honble Shri P.K. Jain, Member (Technical) Honble Shri S. S. Garg, Member (Judicial)
Date of hearing : 03.09.2015 Date of decision : 11.09.2015
O R D E R No:..
Per: P.K. Jain:
The brief facts of the case are that the appellant is a manufacturer of motor vehicles. With effect from 01.03.2003, National Calamity Contingent Duty (NCCD) was imposed on motor vehicles. Appellant had certain motor vehicles which were in substantially manufactured condition though not marketable condition. These vehicles were cleared after 01.03.2003. The appellant did not pay NCCD on such motor vehicle. Revenue has demanded NCCD on these vehicles.
2. Ld. counsel for the appellant submits that NCCD is a new levy and as held by the Hon'ble Supreme Court in the case of CCE vs. Vazir Sultan Tobacco Co. Ltd. 1996 (83) ELT 3 (SC) the new levy would be applicable only on the goods manufactured after 01.03.2003. Since some of the vehicles in question were almost manufactured and even though cleared after 01.03.2003, no NCCD is applicable on the said goods. Ld. counsel also submitted that Board vide circular no. 334/1/2003-TRU dated 28.02.2003 in para 17 has explained that NCCD is not applicable to the pre-budget stock. Ld. counsel also submitted following case laws in support of the contention:-
* CCE vs. Extrusion Processes P. Ltd. 1997 (94) ELT 278 (SC) * CCE vs. Tara Iron & Steel Co. Ltd. 2002 (143) ELT 13 (SC) * Banskantha dist. Oilseed Growers Coop. Union Ltd. vs. CCE 2009 (239) ELT 317 (Tri-Ahmd)
3. Ld. AR reiterated the finding of the original authority and submitted that there is nothing like almost manufactured motor vehicles. The motor vehicles admittedly were not manufactured as there required things like road testing as also certain items were to be fixed. Without these, motor vehicles are not marketable and cannot be taken on road. It is only when the goods are fully finished including road testing etc. the vehicles can be called manufactured motor vehicles. Since in the present case, the goods became manufactured after 01.03.2003, NCCD is applicable.
4. We have considered the rival submissions.
5. There is no dispute about the fact that for the pre-budget stock in respect of manufactured goods which have been manufactured before 01.03.2003, NCCD would not be applicable. However, we find that admitted position even from the appellants side is that the vehicles were not fully finished but substantially finished. It is seen that it is important that the road test are carried on the vehicles before it can be taken on road and released for sale. Similarly, it is an admitted position certain work remains to be done in these vehicles in as much as certain items were yet to be fixed. Under these circumstances, in our view, the motor vehicles cannot be considered as manufactured as on 28.02.2003 and therefore NCCD would be chargeable. In view of the above position, demand is upheld on merits. We also find that equivalent amount of penalty has been imposed under Rule 25 of the Central Excise Rules, 2002. In the facts and circumstances of the case, in our considered view, this is not a fit case for imposition of penalty and we accordingly set aside the penalty imposed under rule 25. Interest under Section 11AB is upheld.
6. Appeal is disposed of in above terms.
(Pronounced in Court on .)
(S. S. Garg) (P.K. Jain) Member (Judicial) Member (Technical)
//SR
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e3068-05
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