Engineering & Locomotive Co.Ltd Vs. Commissioner of Central Excise, Jamshedpur  Insc 1197 (29 November 2007)
Bhan & V.S. Sirpurkar
APPEAL NO(S). 1367-1369 of 2002 With CIVIL APPEAL NO(S). 1370-1372 of 2002
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
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.
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.
demand was confirmed by the Commissioner-respondent.
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.
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 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).
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.
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.
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.
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.
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.
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.
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.