NICHOLAS DSOUZA GARAGE Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) HEARD both sides. The appellants M/s. Nicholas D'souza Garage (hereinafter referred to as 'the assessee' or as NDG) are engaged in the activity of conversion of Motor Vehicle Bodies viz. fabrication of cash vans on duty paid chassis supplied by the customers and clearing them without payment of Central Excise duty. There was another unit M/s. Sigma Autocraft Pvt. Ltd. (hereinafter referred to as SAPL), the second appellant, who were also engaged in the fabrication of motor vehicle bodies like bus bodies, delivery vans & cash vans on duty paid chassis. Both units were operating from the same premises. M/s. NDG, unit was registered with the Central Excise Authorities, Vasai Divn. And paying Central Excise duty on the bodies built on the chassis supplied by the manufacturer viz. TELCO and cash vans fabricated by both units were mainly of two types, the first type cash vans were fabricated on TATA 407 chassis and the second type was fabricated on Mahindra & Mahindra pick up chassis that may be either single cabin or double cabin. The department has combined i.e. first type appeared to merit classification under CH 87.03 (without SSI benefit) of CET whereas the second one appeared to be classifiable under CH 87.07 (with SSI benefit).

(2.) ON verification of the records of both the units for the financial year i.e. 2002 -2003, it was noticed that the clearances value in respect of SAPL had exceeded the exemption limit of one crore. Hence 8 vehicles belonging to SAPL, ready for dispatch were detained by the officers on 24 -1 -2003. They also withdrew Sales Invoices, Profit & Loss Accounts, Balance Sheets of both the units for scrutiny. The detained vehicles were later on seized on 18 -2 -2003 and handover to SAPL for safe custody under a "Supuratnama" dated 18 -2 -2003 and requested for the provisional release made of the seized goods on the basis that they are SSI unit and not crossed the exemption limit of Rs. 1 crore. The cash vans are claimed to be classifiable under CH 87.02 and CSH 8704.90 as Motor vehicles for transport of goods and covered under exemption Notification No., dated 1 -3 -2002 Sr. No. 212 read with Condition 52. They relied upon the decision of the Honourable Supreme Court in the case of Indian Hydraulic Industries, reported in 2003 (152) E.L.T. (para 6) to submit that the CH 87.07 CET would apply only when "body is being sold separately as a body". The department provisionally released all the seized vehicles on a Bond with 25% bank guarantee.

(3.) ENQUIRIES were thereafter made and the show cause notice was issued to the appellants for motor vehicles manufactured/fabricated by both the units viz. SAPL during the period June, 2001 to March, 2003 and by and NDG during the preceding 5 years; duty liability thereon was worked out after clubbing the clearances of both the units taking into account the different duty rates & exemption limits during the respective years. Thus the duty demandable from both the units during the respective years appeared to be as under: - -