ORDER
Lajja Ram, Member (T)
1. These are two appeals filed by the Revenue being aggrieved with the common order-in-appeal dated 1-3-1990 passed by the Collector of Central Excise, Bombay. These matters relate to the valuation of the ambulance built on duty paid chassis. Under Notification No. 214/86-C.E., dated 3-4-1986 the motor vehicle manufactured from the duty paid chassis were exempted from payment of duty of the excise as was equivalent to the duty leviable with reference to that part of the value which represented the value of such chassis on which the body of the motor vehicle was made. Assistant Collector of Central Excise, Bombay observed that the assessee was required to declare the value as per Section 4 for whole of the built vehicle including the value of the chassis and that only the duty on the chassis was thereafter to be deducted from the duty otherwise leviable. On the complete ambulance, the Collector of Central Excise set aside the order and observed that the body builders were required to pay excise duty only on the value added by them i.e. value of the raw-materials and manufacturing cost and profit. He referred to the clarification by the Board under their communication dated 10-12-1986.
2. We have heard Shri K. Srivastava, Ld. SDR for the appellants Revenue and Shri R. Nambirajan, Advocate for the respondents M/s. Rubby Coach Builders.
3. Shri Srivastava, Ld. SDR referred to the provisions of the Notification No. 241/86-C.E., dated 3-4-1986 and submitted that for the motor vehicle as presented for assessment, the duty was first required to be calculated as per the tariff and thereafter the duty paid on the chassis was required to be deducted. It was his submission that the duty paid on the chassis was to form part of the assessable value of the final vehicle. He submitted that the view taken by the ld. Collector of Central Excise (Appeals) was not correct and that it was no where provided in the notification that the duty was to be charged on the value added in the vehicle. Shri Nambirajan, ld. Counsel referred to the clarification issued by the Board dated 10-12-1986 wherein it had been provided that for body building by independent body builders the chassis value was to be excluded and that as between the manufacturers who were availing modvat credit and those who were not availing modvat credit similar treatment was to be accorded. He submitted that the job charges collected by the body builders also included their margin of profit and no extra margin of profit can be added while arriving at the assessable value.
4. We have carefully considered the submissions of both the sides. In Notification No. 241/86-C.E., dated 3-4-1986 the motor vehicle falling under Heading No. 87.02 or 87.04 of the Central Excise Tariff when manufactured from duty paid chassis were eligible for exemption equivalent to the duty of excise leviable with reference to that part of the value which represented the value of the chassis used for such motor vehicle exemption was, however, subject to the condition that no credit of the duty paid on the chassis had been taken under Rule 56A or 57A of the Central Excise Rules, 1944. In the present case the duty paid chassis was supplied by the customer for building the ambulance on such duty paid chassis. The respondents were independent body builders and constructed body on such chassis. They have not availed of the benefit of modvat credit. The adjudicating authority had taken a view that the value of the chassis only was to be excluded from Section 4 value of the body built motor vehicle for the purpose of levy of duty and that the duty paid on the chassis was to form part of the assessable value of the ambulance. When the duty leviable with reference to the value of the chassis was excludible, both the value of the chassis and the duty relatable thereto, in view of the expression used in Notification No. 241/86-C.E., dated 3-4-1986, were excludible for determining the net duty liability on the ambulance in this case.
5. We consider that this has been made clear in the Board’s circular F. No. 350/3/86-TRU, dated 10-12-1986 which is extracted below :-
F.No. 350/3/86-TRU
Government Of India
Ministry of Finance
(Department of Revenue)
New Delhi, 10th December, 1986.
To
The Hon. Secretary,
All India Coach Builders Association,
Lal Bhadur Shastri Marg,
Bhandup, Bombay-400 025.
Sir,
The undersigned is directed to invite a reference to your letter dated the 25th October, 1986. The issues raised in your letter have been examined in the Ministry.
2. Regarding excise duty on body building of vehicles from body kits, it is stated that since duty paying documents are available, Modvat credit would be available in respect of duty paid on such body kits for paying duty on body building of vehicles. It has already been provided that for body building by independent body builders the chassis value will be excluded. It is thus felt that no extra duty burden would arise.
3. As regards fixing specific rate of duty for body building of vehicles falling under Heading No. 82.03, the suggestion has not been accepted since it would necessitate fixing different rates of specific duties for different types of vehicles.
4. As regards Notification No. 428/86-CE, this does not have retrospective effect. Government will consider any request received from you for waiver of duty under Section 11 (c) provided it is established that there was a general practice for non inclusion of the value of chassis for payment of duty on body building on such vehicles.
Yours faithfully,
Sd/-
(Gautam Ray)
Under Secretory to the Government of India
In other words, the manufacturers of body builders who were availing of the Modvat credit with regard to the duty paid on the chassis and those who were charging under Notification No. 241 /86-C.E. were brought at par.
6. In view of the specific Notification No. 241 /86-CE we are not going into the question that under Section 4 the duty paid on the raw-material has to form part of the assessable value of the final product. Viewed from this angle we do not find any ground to disturb the findings of the Collector of Central Excise (Appeals), Bombay in both these appeals and as a result the Appeals filed by the Revenue are rejected.