In a major relief to M/s Tata Motors Limited, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed excise duty exemption on special purpose bullet proof armoured vehicles.
The Counsel for both the appellants, submitted that the issue stands settled in favour of the appellants; in their own case this Bench has decided the classification of the impugned vehicles, under CETH 8705 9000, for the previous period (April 2006 to 31.01.2011) and subsequent period (September 2011 to July 2013).
It was submitted that the issue is no longer res integra and no appeal has been preferred by the Department as on date and that Bullet Proof SPV is meant for use by Army and Paramilitary Forces and is appropriately classified under CETH 8705 9000; the classification is substantiated by the certificate issued by VRDE.
The Counsel also submitted that a provision is required to be made for firing from inside the vehicle through eight holes on the sides and one big hole at the top of the roof to use light machine guns in case of exigency; therefore, in terms of the HSN Explanatory Notes to Chapter Heading 8705, the vehicles are correctly classifiable under CETH 8705. She submits that in terms of Rule 3(a) of the General Rules for Interpretation of the First Schedule to CETA, the most specific description shall be preferred to the Heading which provides general description.
The Authorized Representatives for the Department, reiterated the findings of the impugned order and submits that the said vehicle is classifiable under CETH 8710 0000; appellant No.2 supplies the chases to the appellant No.1 and appellant No.1 does not purchase the same; the appellant No.1 is a job-worker of appellant No.2 and hence, provisions of Rule 10A are applicable; the reliance on M/s Audi Automobiles (supra) by the appellants is incorrect as the same is not applicable to the facts of the case.
A Two-Member Bench of the Authority comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We are of the considered opinion that the issue stands decided squarely in favour of the appellants. We hold that the impugned vehicles are classifiable under CETH 8705 0000and thus, eligible for exemption. As the duty is not payable on the impugned goods, discussion on the valuation of the same is of no consequence. We also find that when duty is not demandable, the case for imposition of penalty does not arise.”
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