- (1.) THIS judgment will dispose of Letters Patent Appeals No. 5 of 1988, 6 of 1988 and 7 of 1988, which arise out of a judgment of learned Single Judge, dated June 5, 1987, vide which the writ Petition of the respondents was allowed holding, inter alia, that the respondents and other small scale manufacturers who build or fabricate only bodies for buses or trucks on the chassis supplied by their customers do not manufacture motor vehicles and the bodies so manufactured are covered under Heading No. 8707 of the entries in Chapter 87, Section XVII of the Schedule of the Central Excise Tarrif Act, 1985 (hereinafter called the Act ).
(2.) IN order to determine the controversy raised in this Letters Patent Appeal, it would be expedient to collate the brief undisputed facts leading to the appeal. The respondents are engaged in building bodies of trucks and buses. The chassis on which the bodies are built are supplied by the customers. The respondents are owners of small scale units for fabricating or building bodies for trucks and buses. They are not holding any licence for manufacture of motor vehicles. The annual turnover of theirs is not more than Rupees ten lacs in any way. They do not sell any motor vehicle. They charge the price of the body built by them either of the bus or of the truck.
(3.) IT is not disputed that there are large number of such units in the State. The Central E xcise and Salt Act, 1944 (Act 1 of 1944) prescribes various rates as specified in the Schedule chargeable as the excise duty. It is provided under the said Schedule as follows : Heading Sub-heading Description of goods Rate of duty No. No. 87. 01 8701. 00 Tractors (other than tractors 15% of heading No. 87. 09) 87. 02 8702. 00 Public transport type pas- 25% senger motor vehicles 87. 03 8703. 00 Motor cars and other motor 5% plus vehicles principally designed Rs. 16,500 for transpo rt of persons (other per car or than those of beading No. vehicle as 87. 02), inc luding station the case wagons and racing cars may be. 87. 04 8704. 00 Motor vehicles for the trans- 20% port of goods. 87. 05 8705. 00 Special purpose motor 15% vehicles, other than those principally designed for the transport of persons or goods (For example, breakdown lorries, crane lorries, fire fighting vehicles, concretemixer lorries, road sweeper lorries, spraying lorries mobile workshops, mobile radiological units ). 87. 06 Chassis fitted with engines, for the motor vehicles of heading Nos. 87. 01 to 87. 05 : 8706. 00 For the vehicles of heading 15% No. 87. 01 8706. 20 For the vehicles of heading 25% No. 87. 02 8706 40 For the vehicles of heading (sic)% No. 87 04. 8706. 50 For the vehicles of heading 15% No. 87. 05. 87. 07 8707. 00 Bodies (including cabs) for the 25% motor vehicles of heading Nos. 87. 01 to 87. 05 On March 1, 1986, the Central Government issued a Notification exempting certain goods from excise duty. It was provided in the said Notification (No. 175/86-C. E. , dated March 1, 1986) in Entry (4) all other goods specified in the said Schedule other than the following namely :__ (i) xxx xxx xxx (ii): all goods falling under heading Nos. 2106, 25. 04, 36. 03, 40. 11, 40. 12,40. 13, 87. 01, 87. 02, 87. 03, 87 04, 87. 05, 87. 06, 87. 11, 91. 01, 91. 02 and 96. 13. ' (iii) xxx xxx xxx (iv) xxx xxx xxx. " However, in view of the latter Notification, dated March 1, 1986, by necessary concomitant bodies including cabs for the motor vehicles as prescribed under Heading Nos. '87. 07 to 87. 25 have been exempted from the payment of the excise duty.;