Decided on January 06,2015



M.V. Ravindran, Member (J) - (1.)THIS appeal is directed against Order -in -Appeal No. AT/M -II/115/2004, dated 5 -1 -2005. The relevant facts that arise for consideration are the appellant herein is the manufacturer of LPG tankers and classified the final product under Chapter Heading 87.04 and discharged the duty liability availing the benefit of concessional rate of duty as provided in Notification No. 239/86 as amended. The Revenue authorities, after scrutinizing the records, came to the conclusion that the products manufactured by the appellant would get classified under Heading 8707.00 and raised the show cause notice demanding the differential duty. Five show cause notices were issued for demanding differential duty for the period 3 -5 -1988 to December 1989. The appellant contested the matter on merits before the adjudicating authority. The adjudicating authority did not agree with the contentions raised and confirmed the demands with interest and also imposed penalty. Aggrieved by such an order, the appellant preferred appeal before the first appellate authority. The first appellate authority, after following the due process of law, agreed with the Order -in -Original and upheld the demands raised along with interest and also the imposition of penalty.
(2.)THE learned Counsel would take us through the rival entries which are in dispute. Further, explaining the process of manufacture, he would submit that the appellant fabricates the tankers which are called as LPG tanks and mounts them on two different trolleys; One of which is called a prime mover and another one is without any prime moving activity. He would take us through the photographs of the vehicle which rolls out of their factory. He would submit that in their own understanding, they have classified the same under Heading 8704.00 as motor vehicles for transport of goods. It is his submission that the said tankers are used for transportation of LPG gas. He would then submit that the department's contention as to their products would get classified under Heading 8707.00, is incorrect as that heading would apply to bodies which are mounted on the chassis received from the customers. He would submit that in the case in hand, they are not mounting the bodies or the tankers on the chassis supplied by the customer. He would submit that in any case, the classification of the product under Heading 87.07 would also be eligible for the benefit of Notification No. 217/86 -C.E. inasmuch as there is no dispute that the said bodies are used/utilized by the appellant in the manufacture of motor vehicles for transport of the goods on which duty liability is discharged. It is his submission that the judgment of the Tribunal in the case of Kamal Auto Industries v. CCE, Jaipur - : 1996 (82) E.L.T. 558, is also in their favour as to the classification of the products manufactured and cleared by them.
The learned departmental representative, on the other hand, would submit that the LPG tanks which are on an attachment at one end to the running gear result in emergence of new products, viz. semi -tanker trailer coupled through a special coupling device to the prime mover. It is his submission that LPG tanks or bodies for the vehicles are correctly classifiable under Heading 87.07 and submit that this view has been taken by the Tribunal in the case of Heat Weld v. CCE - : 1992 (57) E.L.T. 432. He would also rely upon the C.B.E. & C. Circular No. , dated 13 -1 -1989 and submit that it is clarified that container/tanker fabricated for mounting on chassis in the manufacture of road tankers would be regarded as fabrication of bodies for motor vehicles and would fall under Heading 8707.

(3.)WE have considered the submissions made at length by both sides and perused the records. The issue involved in this case is regarding the classification of the container/tanks fabricated by the appellant.

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