Packing/Re-Packing Of Parts Of Device Is Not Manufacture U/S 2(f)(iii) Of Central Excise Act; No Excise Duty: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that packing/re-packing of parts of vibrator compactor is not manufacture under Section 2(f)(iii) Of Central Excise Act and hence no excise duty is leviable.
The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) was addressing the issue of whether the two constructions equipments namely Wheeled Tractor Loader Backhoe and Vibratory Compactor are “Automobiles”, because only then the activity of packing/repacking of parts of the WTLB and VC would amount to manufacture under section 2 (f) (iii) of the Central Excise Act.
In this case, assessee/Appellant is engaged in the manufacture of earth moving construction equipments namely Wheeled Tractor Loader Backhoe and Vibratory Compactor. These two shall be collectively referred to as construction equipments. They were classifiable under Excise Tariff Item7 8430 50 90 of the First Schedule to the Central Excise Tariff, 1985.
Show cause notices was issued on a common premise that the goods are parts of Motor Vehicles, which are Automobile, and so all such parts would fall within the ambit of Serial No. 100 of the Third Schedule to the Excise Act which covers “parts, components and assemblies of Automobiles” and accordingly, the activity of packing / repacking of such parts, carried out by the assessee would amount to manufacture under section 2(f)(iii) of the Central Excise Act.
The Commissioner confirmed the entire demand of excise duty along with interest and penalty upon all the assessee. Redemption fine was also levied on the goods found lying in the factory premises of the assessee at the time of search.
The bench stated that “the amended Serial No. 100A that was inserted in the Third Schedule would not cover Vibrator Compactor as they are classifiable under ETI 8430 50 90, which is not included in Serial No. 100A. Therefore, no excise duty would be leviable on the packing/re-packing of parts of such Vibrator Compactor.”
The period involved in all the three appeals is from 01.06.2006 to 30.06.2011. No excise duty would be leviable on the packing/re-packing of the parts of the two construction equipments prior to 29.04.2010, observed the bench.
In view of the above, the Tribunal allowed the appeal.
Case Title: M/s Case New Holland Construction Equipment (India) Private Limited v. Commissioner of Central Excise, Customs & Service Tax
Case Number: EXCISE APPEAL NO. 1455 OF 2012
Counsel for Appellant/ Assessee: B.L. Narasimhan and Sukriti Das
Counsel for Respondent/ Department: Sanjeev Kumar Ray
