Full Judgment Text
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CASE NO.:
Appeal (civil) 1367-1369 of 2002
PETITIONER:
Tata Engineering & Locomotive Co.Ltd
RESPONDENT:
Commissioner of Central Excise, Jamshedpur
DATE OF JUDGMENT: 29/11/2007
BENCH:
ASHOK BHAN & V.S. SIRPURKAR
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO(S). 1367-1369 of 2002
With
CIVIL APPEAL NO(S). 1370-1372 of 2002
BHAN, J.
1. The assessee-appellant is, inter alia, engaged in the
manufacture of chassis for various models and parts thereof
falling under Chapter 87 of the Central Excise and Tariff Act,
1985 (for short "the Tariff Act") at its factory at Jamshedpur
2. The appellant manufactures motor vehicles of various
models. For each model the parts are according to its
configuration and technical specifications and the price is
also declared accordingly to the department. In other words,
the value of the chassis depends upon its firments. All the
chassis in question had been actually fitted with Engine No.
697 NA and Gear Box GBS 40. There is no dispute on this
factual position between the parties.
3. The appellant submitted the price list dated 1.11.1994
and 1.4.1995 wherein it was mentioned that the chassis of
model no. 1612 is fitted with engine no. 692 DI engines and
GBS 30 gear box whereas the chassis in question were fitted
with engine no. 697 NA and gear box GBS 40. Relying on these
price lists, Department raised differential demand and issued
show cause notices to the appellant dated 22nd June, 1995, 4th
July, 1995 and 1st November, 1995. In these notices, it was
assumed that the appellant has collected Rs.15,290/- per
chassis over and above the value declared in the price lists.
This demand was confirmed by the Commissioner-respondent.
Against the order of the Respondent, the appellant filed
appeals before the Tribunal.
4. On 31st October, 2000, the Tribunal passed a final order
dismissing the appeal filed by the appellant. The contentions
of the Appellant that they have paid duty at its invoice price
on all clearances of chassis of model no. 1612 and that they
have never recovered any amount over and above the invoice
price from their customers, was not taken into account by the
original Bench of the Tribunal dismissing the appeal.
Therefore, appellant filed an application for rectification of
mistake. Thereafter, the Tribunal passed order dated 11th
January, 2001, dismissing the application for rectification of
mistake. However, while passing the order on the application
for rectification of mistake, a difference of opinion arose in
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the matter. The Member (Judicial), who was a party to the
original Bench, allowed the application for rectification of
mistake and ordered rehearing of the appeal. Learned Member
specifically held that the appellant did urge this ground
during the earlier arguments. The Member (Technical)
dismissed the application on the ground of inherency. The 3rd
Member who heard the matter referred to, agreed with the
Member (Technical).
5. The present appeals have been filed by the appellants
challenging the order dated 31st October, 2000 passed by the
Tribunal as also the order dated 8th October, 2001 on the
application for rectification of mistake.
6. Mr. Lakshmikumaran, learned counsel appearing for the
appellant, submitted that there was a clerical /typing error
in the price lists dated 1st November, 1994 and 1st April, 1995
filed by the appellant. In other words, his case is that due
to oversight engine no. 692 and gear box GBS 30 was mentioned
instead of engine no. 697 NA and GBS 40, which are indeed
standard fitments for all vehicles of chassis of model no.
1612. That, for the period prior and subsequent to 1st
November, 1994 and 1st April, 1995, price lists indicating
engine 697NA and gear box GBS 40 as a standard fitment have
been accepted by the Department and no duty demand has been
raised for that period. He also relied upon the statutory
cost audit report as well the certification from Automobile
Research Association of India. That in the absence of any
finding directly or indirectly to suggest that the appellant
had collected the amount of Rs.15,290/- for each chassis over
and above the price declared at the time of clearance of the
goods at the factory gate, the order passed by the authority-
in-original as well as the Tribunal was perverse and
arbitrary.
7. As against this, Mr. K. Radhakrishnan, learned senior
counsel appearing for the Department, supported the findings
recorded by the Tribunal.
8. We find substance in the submissions advanced by Shri
Lakshmikumaran, learned counsel appearing for the appellant.
For the periods prior and subsequent to 1st November, 1994 and
1st April, 1995, price lists indicating engine no. 697NA and
gear box GBS 40 as a standard fitment have been accepted by
the department and no demand for additional duty has been
raised for that period. The statutory cost audit report of
the company also mentioned that engine no. 697 NA and gear box
GBS 40 are the standard parts of the chassis of model no. 1612
which has not been considered by the Tribunal. Certification
from Automobile Research Association of India, which is a
mandatory requirement under the Central Motor Vehicles Rules
and VRDE, also shows that the specification of chassis of
model no. 1612 are engine no. 697NA and gear box GBS 40. This
aspect has also been overlooked by the Tribunal while passing
the order.
9. Further, it is also clear from the invoices raised by the
appellant during the disputed period that engine no. 697NA and
gear box GBS 40 are not mentioned as additional fitment but
as a standard fitment and full duty has been paid on that
basis. Had the standard fitment of chassis of model no. 1612
been engine no. 692 DI and gear box GBS 30, then the appellant
would have charged separately for fitting the chassis with
engine no. 697NA and gear box GBS 40 as additional fitment,
but in fact it is not so.
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10. Central excise duty is payable under Section 4 of the
Central Excise Act. Under Section 4(1)(a) of the Excise Act
when the goods are sold for to an unrelated person and price
is the sole consideration, then the assessable value of the
goods is transaction value at the time and place of removal /
delivery of the goods. Appellant has paid excise duty on the
entire price charged by it from its customers in respect of
sales made at the factory gate and no extra amount was
realized over and above the invoice price. Even in respect of
sales made from the depot, the amount of Rs.15,290/-, as
alleged, has not been charged from the buyer. The invoices
evidencing payment of duty on the entire amount collected from
the buyer are also on record and the department has not
disputed this position. Either in the order of the authority-
in-original or in the order of the Tribunal, there is no
finding directly or indirectly to suggest that the appellant
had collected the amount of Rs.15,290/- for each chassis over
and above what it had charged at the time of the clearance of
the goods at the factory gate. In the absence of any evidence
or a finding recorded by the Tribunal on the basis of such
evidence, the findings recorded by the Tribunal that there is
a short levy of the payable excise duty to the tune of
Rs.15,290/- for each of the chassis, is not sustainable.
11. For the foregoing reasons, the appeals are allowed the
impugned orders of the Tribunal as well as that of the
Original Authority are set aside. Follow up action, if any,
in terms of this Judgment be taken henceforth. The parties
are left to bear their own costs.