IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI


APPEAL NOS: E/86741, 86747 & 86748/2013

[Arising out of Order-in-Original No. 06/2013/C dated 06/02/2013 passed by the Commissioner of Central Excise & Customs, Nagpur.]


For approval and signature:


     Honble Shri P.K. Jain, Member (Technical)
     Honble Shri S. S. Garg, Member (Judicial)


	

1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes




Larsen & Toubro Ltd.


J Kumar


Proficient Equipment Solutions

Appellants
Vs


Commissioner of Central Excise & Customs


Nagpur

Respondent

Appearance:

Shri V. Sridharan, Sr. Advocate with Shri Prakash Shah, Advocate for the appellants Shri Hitesh Shah, Commissioner (AR) for the respondent CORAM:

Honble Shri P.K. Jain, Member (Technical) Honble Shri S. S. Garg, Member (Judicial) Date of hearing: 24/09/2015 Date of decision: 08/10/2015 ORDER NO: ____________________________ Per: P.K. Jain:

The basic issues involved in the present case is whether certain activities undertaken by the appellant amounts to manufacture within Section 2(f)(iii) of the Central Excise Act, 1944 and whether for purpose of valuation, the goods viz. parts of certain earth moving/ construction vehicle are covered under Section 4 or/and Section 4A of the Central Excise Act, 1944 as parts of automobile.

2. This Tribunal vide final order No. A/585-587/EB/C-II dated 23/07/2014 has disposed of all the three appeals filed by the appellant by following another decision of the Tribunal in the case of Commissioner of Central Excise, Pune vs. JCB India Ltd. 2014-TIOL-09-CESTAT-MUM. In brief, matter was decided on merits in favour of Revenue but on limitation, benefit was extended to appellant to which implied dropping of almost entire liability except on seized goods. Against the said order of the Tribunal, both, the appellants as also Revenue filed appeals before the honble High Court of Bombay at Nagpur Bench and the honble High Court vide order dated February 13, 2015 in Central Excise Appeal No. 32 of 2014 filed by the Commissioner of Central Excise, Nagpur  II and Central Excise Appeal No. 3 of 2015 filed by M/s. Larsen & Toubro Ltd passed the following order:

Both these cross-appeals are filed by the Revenue as well as the Assessee being aggrieved by the order of the CESTAT dated 23.07.2014.

The appeal before the CESTAT was filed by assessee challenging the order passed by the Commissioner of Central Excise, Nagpur thereby confirming the order passed by the Assessing Authority and demanding dues to the tune of Rs.1,61,61,27,251/- Rs.6,37,544/- along with interest.

The learned CESTAT cursorily observed in para 3.2 that the extended period of limitation is not invokable and, therefore, the goods are not liable for confiscation. The learned CESTAT also observed that the penalties in the present case are not warranted. While observing this, the learned CESTAT have also observed that the appellants have no case on merits.

The Assessee is aggrieved with that part of the order wherein it is stated that the appellants have no case on merits whereas the Revenue is aggrieved with the findings of the learned CESTAT that the extended period of limitation was not invokable. We find that in the interest of justice both the appeals deserve to be allowed by remitting the matter back to the learned Members of the CESTAT for considering the issue afresh by considering the rival submissions on behalf of both the parties.

The appeals are, therefore, allowed. The matter is remanded to the learned Tribunal for deciding it afresh in accordance with the law after considering the rival submissions. The same shall be done within a period of three months from today. No order as to costs.

3. Keeping in view the direction of the honble Bombay High Court, the matter was listed for final hearing on 17/03/2015. On the said date, the matter was adjourned to 28/04/2015. On 28/04/2015, at the request of the main appellant the matter was adjourned to 11/05/2015. The case was part-heard on 11/05/2015 and thereafter the matter was adjourned 2  3 times, mostly at the request of the appellant as the Senior Counsel would not be available. Finally, the matter has been heard on 08/09/2015, 09/09/2015, 10/09/2015, 23/09/2015 and 24/09/2015.

4. After hearing both the sides at length, we find that there are number of factual variations in the present case compared to the case of JCB India Ltd. reported in 2014-TIOL-09-CESTAT-MUM decided by this Tribunal which was the sole basis for allowing the appeal of the appellants by this Tribunal vide order dated 23/07/2014. We find it strange that learned counsel for the appellants did not point out these differences at that time. The first difference is that in the case of JCB, the items were parts of Loaders, Backhoe Loaders and Road Rollers. In the present case, none of the three vehicles is involved. The items in the present case are parts of scannia trucks, dumpers, motor graders, wheel loaders, dozers and hydraulic excavators. It would thus be seen that the end vehicles are different, though these items are also used as earth moving vehicles in construction or mining industry. It is also to be noted that out of the earlier mentioned six items, two items, trucks and dumpers are classifiable under Chapter 87 while the remaining four are under Chapter 84.The second difference that we find  in the case of JCB, all the parts were proposed to be valued under Section 4A of the Central Excise Act. In the present case, Revenue has taken the view that activities undertaken by the appellant are covered under Section 2(f)(iii) read with Third Schedule to the Central Excise Act, and hence amounts to manufacture. Further, in respect of packed parts, components and assemblies the same are required to be valued under Section 4A while in respect of unpacked parts, components and assemblies value is required to be determined under Section 4. The third important difference in the present case is that while in the case of JCB Ltd. the demands were for the period prior to February/April 2010 and the appellants in that case were paying duty under Section 4A after February/April 2010, in the present case, demand is even for the period February/April 2010  April 2011, the appellants even after the removal of the word automobiles in February/April 2010 and specifying particular headings and Chapters both in the third schedule to the Central Excise Act as also from Notification relating to Section 4A continued to clear the goods without taking registration, without payment of duty, etc. It is only from May, 2011 that the appellants took registration and started paying duty. It is important to note that changes made in the third schedule vide Finance Act, 2011 were with retrospective effect. The present show cause notice, therefore, covers even the period from April 2010 to April 2011. Incidentally, at the stay stage as also during investigation, learned counsel for the appellant has accepted duty liability of about ` 24 crores for the said period.

5. In brief, the appellants are dealing in parts, components and assemblies of certain earth moving vehicles, namely, scannia trucks, dumpers, motor graders, wheel loaders, dozers and hydraulic excavators. These parts, components and assemblies are either imported by them or procured from a local associate of a foreign company, namely, Komatsu; and procured locally from the manufacturing facilities in Pune/Bangalore. Parts, components and assemblies of automobiles are covered in the third schedule to the Central Excise Act which is required to be read with Section 2(f)(iii) of the same Act. Further, parts, components and assemblies are also specified by notification for purpose of valuation under Section 4A. The appellants contention is that earlier mentioned earth moving vehicles/equipments are not automobiles and therefore parts, components and assemblies being dealt with by them are not covered under Section 2(f)(iii) read with third schedule or Section 4A. The other contention of the appellant is that even if the goods dealt with by him are covered by parts, components and assemblies of automobiles, even in that situation, as far as unpacked goods, parts are concerned, the activity undertaken by them will not amount to manufacture and, therefore, there cannot be any duty liability in respect of unpacked goods.

6. Before we go into the various submissions, made by the learned senior counsel Shri V. Sridharan, for the appellant, we would like to mention that, learned Senior counsel Shri V. Sridharan had appeared in the case of JBC India Ltd. (supra) and most of the contentions/ arguments as also Board Circular and case laws, particularly relating to scope of the term automobile raised by the senior counsel are the same which were raised in the case of JCB India Ltd. (supra). One of the Members deciding the present case was also part of the Division Bench which had decided the case of JCB India Ltd. Shri K.M. Mondal, Special Consultant had argued for Revenue in the case of JCB India Ltd. However, in the present appeals Shri Hitesh Shah, Commissioner (AR) is representing the Revenue. Shri Hitesh Shah has provided additional material in support of Revenues contention.

7. Since main issue starts with the scope of the term automobile various case laws and Boards circular are the ones which were discussed at great length in the case of JCB India Ltd., we would be reproducing many parts from the Tribunals order in the case of JCB India Ltd.

8. The learned Senior counsel reiterated various submissions made by him during the hearing of JCB India Ltd. (supra). The said submissions are not being repeated for sake of brevity. Learned senior counsel also submitted detailed written submissions on 8th September, 9th September and after the hearing was over. The main contention in brief are:

8.1. The appellants have not subjected all the parts of hydraulic excavators, dozer, wheel loaders, motor graders, dumpers and tippers to packing, re-packing, or affixed MRP. The earth moving machinery like hydraulic excavator, dozer, wheel loaders, and motor graders are not automobiles. Automobile only refer to car or trucks carrying goods. Hydraulic excavator and bulldozer are chain mounted and hence not a motor vehicle. Department is bound by circular dated 16/12/2008. Parts of goods of chapter 84 were never covered by sr. No. 100 of the third schedule as inserted by Finance Act, 2006. No duty is payable on dumpers having regard to the fact that dumpers are specially designed to work in coal mines. No duty is payable on parts of scannia tippers having regard to undisputed fact that additional duty of customs under Section 3 of the Customs Tariff Act, 1975 is paid with reference to maximum retail price declared thereon. No duty is payable on parts of hydraulic excavators, dozer, wheel loaders, motor graders8 dumpers and scania tippers, not re-packed but affixed with the tag bearing details of parts and name of L&T. The respondent committed an error of law in denying the credit of duty paid on the parts allegedly packed, re-packed, labeled or re-labeled by the appellants. In respect of the demand covered by Section 4 valuation, the appellants are entitled to cum-duty. The demand for beyond the normal period of one year from the date of service of the show cause notice is barred under Section 11A of the Act. Goods are not liable for confiscation as no goods are available. This is contrary to the Honble Bombay High Court decision reported in 2009 (248) ELT 122 (Bom.) Para 5. No penalty under Section 11AC of the Act and/or Rule 26 of the rules, can be imposed. Excavators and dozers (chain mounted) are not automobiles. Activity of putting tag on unpacked goods is not covered by Section 2(f)(iii) of the Act. No demand can be made from 2010 to 2011 by invoking extended period in view of retrospective amendment. Learned senior counsel submitted catena of judgments for each one of the above proposition.

9. The learned Commissioner (AR) on the other hand relied heavily on this Tribunals decision in the case of JCB India Ltd. (supra). In connection with the scope of the term automobile, learned AR submitted that the Automotive Industry Standard AIS 53, published in 2005, by the Automotive Research Association of India, Pune applies to road vehicles includes construction equipment vehicle which in turn is defined as:

construction equipment vehicle means rubber tyred, (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor roller, dumper, motor-grader, mobile crane, dozer, fork lift truck, self-loading concrete mixer or any other construction equipment vehicle or combination thereof designed for off-highway operation in mining, industrial undertaking, irrigation and general construction but modified and manufactured with on or off or  on and off highway capabilities. The learned AR further submitted that the same definition appears in the IS 14272 (2011): Automotive vehicles  Types  Terminology published by the Bureau of Indian Standards. The above Standards indicate that all self propelled vehicles, whatever may be their use, are considered as automotive vehicles or automobiles. Vehicles with steel drum wheels i.e. crawlers or track laying or chain mounted vehicles are also considered as automotive vehicles. Hydraulic excavators which are self propelled, whether wheel mounted or crawlers, are considered as automotive vehicles. Vehicles designed for off highway operations with on highway, off highway, on and off highway capabilities are considered as automotive vehicles. Such an automobile may have the functional capability of excavating, dozing, loading, grading, compact rolling, cement mixing etc. The machinery may vary depending upon the work to which the automobile is to be put.

9.1. Another submission made by the learned Commissioner (AR) is that the automotive aspect of an automobile vehicle and the machinery aspects are two different aspects. It was further submitted that different machinery aspect of an automotive vehicle makes the automotive vehicle suitable for different purposes, but that in any case, does not mean that the automotive aspect of the overall vehicles gets lost. The learned AR submitted that in the case of various earth moving equipment/vehicles, these are two different parts of such equipment/vehicle. The first part is the automobile part due to which such equipment can move from one place to another place based upon its self propelled and various other properties which are common to any automobile and other aspects, i.e., the machinery aspect which makes it suitable for construction/mining, etc. The second aspect does not extinguish its identity as an automobile. In fact, parts continue to be common. The learned Commissioner (AR) further made the following submissions in this context:

(i) IS/ISO 6165 (2006): Earth Moving Machinery-Basic Types-Identification and Terms and Definitions deals with the Machinery aspect. It explains earth moving machinery as self propelled or towed machine on wheels, crawlers or legs having equipment or attachment (working tool), or both, primarily designed to perform certain functions.

(ii) IS 14272 (2011) and AIS 053 mandate that the `self propelled vehicle, whether on steel drum wheels (crawlers etc.) or on rubber padding or rubber/pneumatic tyres shall be considered as road vehicle.

(iii) The non self propelled i.e. towed or on legs have no automotive vehicle aspect and are not considered as automobiles.

(iv) The Machinery aspect is considered separately from the Automotive aspect for the purpose of technical compliance. For e.g. IS/ISO 7451 (2007): Earth Moving Machinery-Volumetric Rating for Hoe-Type and Grab-Type Buckets of Hydraulic Excavators and Backhoe Loaders. Hence, the automotive aspect makes the impugned goods automobiles. The functional machinery is mounted on the automobile. Hence, goods are automobiles.

9.2. The learned AR further submitted that the all the six items undoubtedly indicates that these are self propelled vehicles which works either on rubber or pneumatic wheels or steel drum wheels. Hydraulic excavators are available with rubber/pneumatic tyres or with steel drum wheels. A perusal of the literature of each of the items would indicate that they have automobile aspects as also the machinery aspect. Automobile aspects are like independent power, speed, operating weight specification, etc. 9.3. Learned AR further submitted that all the items are automobiles for the purpose of Section 2 of the Air (Prevention and Control of Pollution) Act, 1981, which defines the term automobile as:

2(e)?automobile means any vehicle powered either by internal combustion engine or by any method of generating power to drive such vehicle by burning fuel; 9.4. It is further submitted by the learned AR that this Tribunal in the case of Sociedade de Formento & Ors vs. Commissioner of Customs 1987 (29) ELT 620 (T), considered crawler type vehicles and held them to be conveyances. It is his submission that, automobile need not be classified under Chapter 87 alone it can be classified under Chapter 84 also and the goods do not lose its identity as automobiles based upon the classifiable under Chapter 84 or 87 of the schedule to the Central Excise Tariff Act, 1985. It was further submitted that In Bhavani Loaders vs. Commissioner of Central Excise 2006(205) ELT 1017 (T) it is held that self propelled bull dozers, angle dozers, graders, levelers, scrapers, mechanical shovels i.e. automobile with material handling equipment are special purpose motor vehicles. In Maniar & Co. vs. Commissioner of Central Excise 2004 (171) ELT 267 (T) and 2000 (119) ELT 418 (T) and Commissioner of Central Excise vs. Kailash Auto Builders Ltd. 2010 (257) ELT 582 (T), it is held that a loader which picks up garbage and dumps it on a waiting garbage transportation truck is a motor vehicle. In Commissioner of Central Excise. Baroda vs. LMP Precision Engineers Co. Ltd. 2004 (163) ELT 290 (SC) it has been held that water well drilling rigs on motor vehicle is a motor vehicle.

9.5. The learned AR further submitted that taking cognizance of such automobile which have earth moving equipments affixed to them or as a part of such automobiles, common classification in entry 732 1911 is provided. That the legislature does not treat automobile and earth moving equipment as two different entities, rather it recognizes the fact that they are goods which are automobiles and have earth moving equipment thereon and hence, there is a need for common classification of articles which shall be used in the manufacture of such goods, whether for the automobile aspect or the earth moving aspect. It was further submitted that the HSN also recognises the existence of such automobiles as self propelled and other mobile machines under Chapter 84 as well as Motor Vehicles under Chapter 87. Hence, it provides elaborate Explanatory Notes, for classification of such goods under Chapter 84 or under Chapter 87, based on their mechanical configuration. Such Notes for the purpose of classification recognize the fact that there are automobiles which have earth moving equipment. However, the classification of the goods either under Chapter 84 or 87 or any other Chapter does not extinguish their identity as automobiles.

9.6. The learned AR further submitted that the term automobile covers all automotive vehicles and no restriction can be put on the general meaning of any entry in a taxing statute as has been held in the following cases:

> Commissioner of Sales Tax vs. Agarwal & Co.1983 (12) ELT 116 (Bom.);

> Indian Tool Manufacturers vs. Collector of Central Excise, Poona 1984 (18) ELT 527 (Tribunal);

> Indian Tool Manufacturers vs. ACCE 1994 (74) ELT 12 (SC);

> Standard Pencils (P) Ltd. vs. Collector of Central Excise, Madras 2002 (145) ELT 278 (SC);

> Swaraj Mazda Ltd. vs. Commissioner of Central Excise, Chandigarh  II 2010 (257) ELT 264 (Tri.-Del.);

> The Western India Plywoods Ltd. vs. Commissioner of Central Excise1985 (19) ELT 590 (Tribunal)

10. The learned AR further submitted that the goods cleared by the appellants have been subjected to the process amounting to manufacture as even in the case of unpacked goods it is not disputed that they were putting the labels and the definition under Section 2(f)(iii) very clearly mentions that labelling will amount to manufacture. It was submitted that the word label is not with reference to the container. In any case, as admitted by the appellant, these goods are not being packed because of their size. In such a situation even putting a label on the equipment will deem to be putting a label on the container.

10.1. It was further submitted that the definition of the term excisable goods in Section 2(d) of the Central Excise Act, 1944 is not relevant because it pertains to the Central Excise Tariff Act, 1985. It was further submitted that the Central Excise Act, 1944 makes no reference to excisable goods. Section 2(f)(iii) of the third Schedule refers only to the goods. This term has to be given its true and popular meaning and the goods would include imported goods also. It was further submitted that the explanation of Section 2 (d) clarifies the position that for the purpose of this clause, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.

10.2. Learned AR further submitted that in the following case laws packing and labelling has been considered as deemed to be manufacture.

> Baccarose Perfumes & Beauty Products Ltd. vs. Commissioner of Central Excise 2006 (198) E.L.T. 462 (Tri);

> Commissioner of Central Excise vs. Baccarose Perfumes & Beauty Products Ltd. 2010 (257) E.L.T. 177 (Guj.);

> Prime Healthcare Products vs Commissioner of Central Excise 2009 (245) E.L.T. 550 (Tri);

> Commissioner of Central Excise vs. Prime Healthcare Products 2011 (272) E.L.T. 54 (Guj.) > Commissioner of Central Excise vs. Parveen Tobacco Co (P) Ltd. 2013 (288) ELT 433 (T);

> BASF India Ltd. vs. Commissioner of Central Excise 2009 (245) ELT 381 (T);

> United Distributors vs. Commissioner of Central Excise (319) ELT 571 (T) > Nitin Patki vs. Commissioner of Central Excise 2011 (273) ELT 104 (T);

> CIPLA Ltd. vs. Commissioner of Central Excise 2007 (208) ELT 140 (T);

10.3. It was further submitted that Section 2(f)(iii) deems any process which involves labelling or relabeling of containers (not necessarily a unit container) to amount to manufacture. The processes of labelling of goods or relabeling of containers are independent. It is not necessary for such label to mention retail sale price (RSP) or be a retail sale label. However, if a RSP is declared or existing RSP is altered, whether by labelling or inscription or any other method, the process shall amount to manufacture. Section 2(f)(iii) deems, any process which involves any other treatment on the goods to render the product marketable to the consumer, as manufacture. It was also submitted that the term container has been considered in the following cases:

> G. Claridge & Co. vs. Commissioner of Central Excise 1991 (52) ELT 341 (SC);

> Parksons Printers vs. Commissioner of Central Excise 1996(86)ELT 603 (T) It was submitted that when the term container is found independently, in a broad sense it indicates a receptacle which contains and in a narrow sense a receptacle in which articles are covered or enclosed. Hence, the term container cannot be synonymous with a unit packing or a package or a closed receptacle. It was submitted that the goods are received by the appellant in cartons, wooden and tin cases and are subject to, in some cases, unpacking and repacking and labeling and in some cases the goods were unpacked and then put in pre-printed pouches. In some cases, goods are labelled whether with a tag or sticker or label containing relevant information which is important to the appellant and its buyer and to the process of sale and consumption of such goods. It was his submission that in view of this position the process undertaken by the appellant helps in marketing of the goods also.

11. Circular No. 22/90-Cx dated 11/07/1990 pertains to exemption Notification No. 61/86-CE and Circular No. 262/15/86/Cx8 dated 14/07/1987 pertains to Cess leviable under the Automobile Cess Rules, 1984. These do not pertain to entries in the third schedule of the Central Excise Act, and therefore, cannot be used for interpreting Notifications issued under Section 4A. The honble Supreme Court has held so in the following cases:

> Commissioner of Central Excise vs. Modi Alkalies and Chemicals Ltd 2004 (171) ELT 155 (SC);

> Modi Alkalies and Chemicals Ltd vs. Commissioner of Central Excise 2008(227)ELT A32 (SC);

> Parle Bisleri Pvt Ltd. vs. Commissioner of Central Excise 2011 (263) ELT 15 (SC);

> Commissioner of Central Excise vs. Super Synotex (India) Ltd 2014 (301) ELT 273 (SC);

11.1. It was further submitted that CBEC Circular 167/38/2008 CX4 dated 16/12/2008 does not give any binding instruction., as it merely states at para 2.3 that , the above clarification/ definition may be considered to interpret the scope of the term automobile. It was further submitted in the following cases it has been held that a circular of the CBEC or the Department which gives a wrong interpretation of a judgement, or which is contrary to law, or which limits the powers vested in any authority by law, is not binding on the officers of the Department:

> Himalaya International Ltd vs. Commissioner of Central Excise 2003 (154) ELT 580 (T-LB) > Pahwa Chemicals Pvt Ltd vs. Commissioner of Central Excise 2005 (181) ELT 339 (SC) > AEONs Construction Products Ltd. vs. Commissioner of Central Excise 2005 (184) ELT 120 (SC) 11.2. The learned AR further submitted that the adjudicating authority is not bound by the Circulars of the Board as has been held by the Honble Supreme Court in the following cases:

> UOI vs Madras Steel Re Rollers Association 2012 (278) ELT 584 (SC) > Commissioner of Central Excise vs. Minwool Rock Fibres Ltd. 2012 (278) ELT 581 (SC) 11.3. It was further submitted that as per para 7 of the judgment of the Constitution Bench of the honble Supreme Court in the case of Commissioner of Central Excise vs. Ratan Melting & Wire Industries 2008 (231) ELT 22 (SC) it has been held that department can argue against the provisions of its own circular and any contrary view would be against the very concept of majesty of law declared by this Court and the binding effect in terms of Article 141 of the Constitution.

12. As far as the entitlement to CENVAT credit is concerned, the learned AR submitted that the appellants have not submitted any document either before the adjudicating authority or before this Tribunal and hence there is no question of remand for deciding liability of CENVAT credit in view of judgment of Honble Supreme Court in the case of Kores India Ltd vs. Commissioner of Central Excise 2004 (174) ELT 7 (SC) which is re-affirmed in Kores India Ltd. vs. Commissioner 2015 (318) ELT A252 (SC).

12.1. As far as the plea of benefit of cum-duty is concerned, it is submitted that benefit of cum-duty cannot be extended in the present case in view of the following case laws:

> Amrit Agro Industries Ltd. vs. CCE, Ghaziabad 2007 (210) ELT 183 (SC);

> Ahmednagar Rolling Mills Pvt. Ltd. vs. CCE, Aurangabad 2014 (300) ELT 119 (Tri.-Mumbai) 12.2. The learned AR submitted that as far as extended period of limitation is concerned, it cannot be said that the appellant were not aware of the provisions of Section 4A or the parts are not covered under Section 4A. In fact they themselves were importing parts of scania trucks on which they were paying CVD as per Section 4A. Once at the time of import, they were paying duty under Section 4A, it was their duty to take Central Excise registration and inform their activities of labelling, repacking, etc. to the local excise authorities and file the returns. Further parts which were being imported by Komatsu India Ltd. were being purchased by them and other parts from other local producers (which were related to appellant). It would be natural to apply Section 4A valuation particularly when they are doing so while when clearing the goods at the time of import. It was also submitted by the learned AR that in this case the term automobile was removed from the relevant Notifications, etc, in February 2010 and the same was replaced by specific tariff heading. After the said date there were no scope, whatsoever, to have a different interpretation but the appellant continue to evade duty even after that date. This conduct of the appellant itself indicates the suppression of facts with willful intention to evade payment of duty. Learned AR further relied upon the following case laws.

> Kores India Ltd. vs. Commissioner of Central Excise, Chennai 2004 (174) ELT 7(S.C.) > B.P.L. India Ltd. vs. Commissioner of Central Excise, Cochin 2002 (143) ELT 3 (S.C.);

> Mallur Siddeswara Spinning Mills (P) Ltd. vs. Commissioner of Central Excise, 2004 (166) ELT 154 (S.C.);

> Air Liquide North India Pvt. Ltd. vs. Commissioner of Central Excise,, Jaipur-I 2011 (271) ELT 321 (S.C.);

> Nicholas Piramal India Ltd. vs. Commissioner of Central Excise, Mumbai 2010 (260) ELT 338 (S.C.);

> Commissioner of Central Excise, Chandigarh vs. Oswal Yarns Ltd. 2015 (320) ELT 689 (S.C.);

> Board of Control for Cricket in India vs. Commissioner 2015 (37) STR J176 (S.C.)

13. We have considered the rival submissions. The first issue is whether the parts, components and sub-assemblies sold by the appellants after packing, labeling, etc. are covered by the scope of the term parts, components and sub-assemblies of automobiles. Learned AR during the course of the hearing has produced a list of parts along with part numbers which were being sold and are matter of dispute. The list includes bolt, nut, washer, hose, dowel pin, o-ring, back-up ring, oil seal, plug, filter element, dust seal, elbow, hose suction tank to pump, tube, dry battery, horn, master bushing, dust seal, flexible coupling, bracket, oil cooler, fan for ROC, radiator, radiator cap, switch, wiring harness, bearing, pipe, swing machinery case, shaft, cylinder, collar, seal kit stick cylinder, gear assy, hyd tank, fuel tank assy (osp), etc. Most of these items are used in car, trucks and other vehicles. Car, trucks, etc. are even according to appellant are automobiles. Description of parts components and assemblies clearly indicates these are parts, components and assemblies of automobiles.

14. Relevant sections, notifications and circulars are as under:

14.1. Section 2(f)(iii) of the Central Excise Act, 1944 reads as under:-

(f) manufacture includes any process, -

i) .

(ii) 

(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. 14.2. Vide Section 66 of the Finance Act, 2006 the Third Schedule to the Central Excise Act, 1944 was amended so as to include Parts, components and assemblies of automobiles falling under any chapter of the Schedule to the Central Excise Tariff Act, 1975.

14.3. Section 4A of the Central Excise Act, 1944 empowers the Central Government to specify any goods, in relation to which it is required, under the provisions of Standards of Weight & Measures Act, 1976 or the Rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods. In respect of such goods, value for purpose of charging duty is deemed to be the retail sale price declared on such goods less such amount of abatement as notified. The said section is as under:-

Section 4A - Valuation of excisable goods with reference to retail sale price. -

(1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Legal Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply.

(2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette.

(3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods.

(4)  14.4. Exercising powers under Section 4A of the Central Excise Act, Central Government issued Notification No. 11/2006-C.Ex. (N.T.) dated 29th May, 2006. The said Notification reads as:-

In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 2/2006-Central Excise (N.T.), dated the 1st March, 2006, G.S.R. 113(E), dated the 1st March, 2006, namely:-

In the said notification, in the TABLE, after S.No.96 and the entries relating thereto, the following shall be added, namely:-

Any heading Parts, components and assemblies of automobiles 33.5% 98 3808 30 40 Plant-growth regulator 30% 99 9603 21 00 Toothbrush 28.5%.

2. This notification shall come into force on the 1st day of June, 2006. 14.5. On 24th December, 2008, above Notification was replaced by Notification No. 49/2008-C.E. (N.T.). However, there was no change in the description of entry with which we are concerned except that abatement percentage was reduced from 33.5% to 30%, and was listed as entry No. 108.

14.6. The Notification No. 49/2008-C.E. (N.T.) was amended vide Notification No. 9/2010-C.E. (N.T.) dated 27/02/2010 and the said entry was replaced as:-

S. No. Chapter Heading, sub-heading or tariff item.

Description of goods 108.

Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under headings 8712, 8713, 8715 and 8716 14.7. The said Notification was again amended vide Notification No. 19/2010-C.E.(N.T.) dated 29/04/2010 and a new entry 109 was inserted which read as:

109.

Any Chapter Parts, components and assemblies of goods falling under tariff item 8426 41 00, headings 8427, 8429 and sub-heading 8430 10.

14.8. It will be seen that the term automobile was replaced by specific chapters, headings. The term automobile became irrelevant as far as Section 4A notifications are concerned.

14.9. However no amendment was carried out in the corresponding entry in the Third Schedule to the Central Excise Act at that time. In the Finance Bill, 2011, Third Schedule was amended as under:-

(a) for S. No. 100 and the entries relating thereto, the following shall be substituted and shall be deemed to have been substituted with effect form the 27th day of February, 2010 namely:-

Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under heading 8712, 8713, 8715 and 8716

(b) after S. No. 100 and the entries relating thereto, the following S. No. and entries shall be added and shall be deemed to have been added with effect form the 29th day of April, 2010 namely:-

100A Any Chapter Parts, components and assemblies of goods falling under tariff item 8426 41 00, headings 8427, 8429 and sub-heading 8430 10 Thus Finance Act, 2011 amended/inserted above mentioned entries with retrospective effect i.e. the day where Notification No. 9/2010-C.E. (N.T.) and 19/2010-C.E. (N.T.) were issued.

14.10. It also appears that in the Finance Act, 2011 instead of third Schedule to the Central Excise Act, 1944, Central Excise Tariff Act, 1985 was inadvertently mentioned and the same was corrected by an amendment vide Finance Act, 2012.

14.11. The following three circulars of the Board are relevant.

(i) Circular No. 262/15/86-CX.8 dated 14.07.1987

(ii) Circular No. 22/90-CX.4 dated 11.07.1990

(iii) Circular No. 167/38/2008-CX.4 dated 16.12.2008 14.12. The first Circular is regarding leviability of cess under Automobile Cess Rules, 1984 on Earthmoving machinery. The said Circular is as under:-

Automobiles - Cess not chargeable on earthmoving machinery F. No. 262/15/86-CX.8, dated 14/07/1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Cess on automobiles - Clarification Regarding.

A doubt has arisen whether Earthmoving machinery is leviable to cess under the Automobile Cess Rules, 1984.

2. The matter has been examined in consultation with the Ministry of law which has opined that since Earthmoving machinery including dumpers fall under item 11 of the 1st Schedule to the I (D & R) Act, 1951 and not under Heading 7(5) of the said schedule, no cess would be chargeable on the same under the Automobile Cess Rules, 1984. The opinion of the Law Ministry has been accepted by the Board. 14.13. Boards Circular No. 22/90-CX.4 dated 11/07/1990 which reads as:-

Circular No. 22/90-CX.4, dated 11/07/1990 [From F. No. 156/15/90-CX.4] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Whether benefit of Notification No. 61/86-C.E., dated 10/02/1986, as amended would be extended to Drivers Seats of Hydraulic Excavators or not - Clarification regarding.

Doubts have been expressed regarding extension of benefit of Notification No. 61/86-C.E., dated 10-2-1986 to drivers seats of hydraulic excavators in terms of Serial No. 2 to the table annexed to Notification No. 61/86-C.E. as amended.

2. The matter has been discussed in the North Zone Tariff-cum-General Conference held at Manali, on 7th and 8th June,1990. A view was expressed that hydraulic excavator was nothing but an automobile and therefore, seats were eligible for the benefit of exemption Notification No. 61/86-C.E., dated 10-2-1986. However, the Conference took note of the fact that, automobiles are conveyances for transportation of passengers, and goods on roads (Chapter 87), whereas hydraulic excavators were earth digging and earth loading machinery classifiable under Heading 84.20 of Central Excise Tariff Act, 1985. As such they cannot possibly be treated as automobiles.

3. The Conference recommended that as hydraulic excavators are not automobiles the benefit of exemption Notification No. 61/86-C.E., dated 10-2-1986 on drivers seats would not cover Drivers seats meant for hydraulic excavators.

4. The Board has accepted the above recommendation of the Conference and accordingly, it is clarified that benefit of Notification No. 61/86-C.E., dated 10-2-1986 would not be available to drivers seats meant for hydraulic excavators.

5. All pending assessments may be finalised accordingly.

6. Field formations and Trade may be informed suitably. 14.14. The said Circular is based upon Tariff conference where a view was expressed that hydraulic excavators was not but automobile as automobiles are conveyances for transportation of passengers, and goods on road and therefore decided not to extend the benefit of Notification No. 61/86-C.E. dated 10/12/1981 to driver seats of hydraulic excavators. However, this very circular was matter for decision before this Tribunal in the case of Krishna Fabricators P. Ltd. (supra) and after detailed discussion and based upon various judgments of the Hon'ble Supreme Court and Madras High Court, this Tribunal came to the conclusion that Automobile includes tractors and earth moving equipments. Thus Tribunal took a view contrary to the said Circular. Revenue has not challenged the said judgment of this Tribunal and therefore the Circular dated 11/07/1990 is no more valid and this circular does not represent the correct legal position. In our considered view any reliance on the said circular would be contrary to judicial verdict. However, perhaps, unaware of the said judgment, Board issued Circular on 16/12/2008.

14.15. Boards Circular No. 167/38/2008-CX.4 dated 16/12/2008 is as under:-

Automobile parts, components and assemblies - Scope, for MRP based valuation F. No. 167/38/2008-CX 4, dated 16-12-2008 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : MRP based assessment - Clarification regarding the scope of entry No. 97 of the Notification No. 2/2006-C.E. (N.T.) inserted vide the amending Notification No. 11/2006-C.E. (N.T.) [Present entry No. 107 in the Notification No. 14/2008-C.E. (N.T.)] - Regarding.

References have been received from the field formations regarding the scope of above mentioned entry. The entry reads as under :

S. No. Chapter Heading, sub-heading or tariff item of the First Schedule.

Description of goods Abatement as a percentage of retail sale price 97 Any heading Parts, components and assemblies of automobiles 33.5% 2.1 The first issue is regarding interpretation of term automobiles. The said term has not been defined in the Notification, hence its general meaning needs to be considered.

In this regard, reference may be made to the Circular No. 22/90-CX.4, dated 11/07/1990. In this circular at para 2, it has been stated that automobiles are conveyances for transportation of passengers and goods on roads (Chapter 87) and that hydraulic excavators cannot be treated as automobiles.

2.2 Further, as per the Automobile Cess Rules [under the industries (Development and Regulation) Act, 1951], automobile is defined as follows:

Automobile means motor cars, buses, trucks, jeep type vehicles, vans, scooters, motorcycles, mopeds, and all other automobiles covered under the sub-heading (5) of Heading 7 Transportation of the First Schedule to the Act;

The relevant sub-heading 7(5) reads as follows :

7. Transportation (5) Automobiles (motor cars, buses, trucks, motorcycles, scooters and the like) 2.3 It is also to clarify that the term automobiles does not include animal driven or manual driven vehicles.

The above clarification/definition may be considered to interpret the scope of term automobile.

3.1 Another issue that has arisen in the scope of the term part as used in the aforementioned entry. Chapter 87 of the Central Excise Tariff covers parts of different vehicles. Further, Section Note 2 of the Section XVII also defines the scope of parts of goods falling in said section. Doubts have arisen as to whether parts classified in Chapter 87 shall only be covered under the said entry or all parts irrespective of their classification should be covered.

3.2 The issue has been examined. The said entry provides that parts, components and assemblies falling in any heading in the Tariff are covered. Therefore, it is logical that all parts, components and assemblies, irrespective of their classification shall be covered. It is also important to note that there is no specific entry for components or assemblies of automobiles in the Tariff, therefore, this also supports the view that all goods which are commonly known and sold in the trade as parts, components and assemblies are covered by said entry, irrespective of their clarification in the Tariff.

Hence, the term parts, components and assemblies of automobiles includes items like batteries, brake assembly, tyres, tubes and flaps, IC engines, ball bearing etc.

4. The contents of this clarification may be brought to the notice of trade and industry.

15. In the case of JCB India Ltd., after considering earlier mentioned legal provisions, circulars and case laws and arguments of both sides (which were repeated in the present case), this Tribunal has observed as under:

17.1 We have considered the rival submissions, and given considerable thought to these submissions. At the outset we note that all the items in question viz. Loader, Backhoe Loader and Road Roller are self propelled, work with internal combustion engine using fuel such as diesel, have four wheels and are rubber tyred (road roller may have two rubber tyres and one roller, or only rollers). These move also on roads. Thus, these have all the characteristics of motor vehicles. In addition, these items have attachments which enables to execute and move earth, mud etc. from one place to another. In case of road rollers, it helps in compacting and setting the road due to vibrating techniques in compaction jobs.

17.2 We also note that these items require registration under Motor Vehicle Act, 1988. We also note that before permitting any motor vehicle on the roads, Motor Vehicle Act requires the vehicles to be examined/tested by specified institutions regarding suitability to ply on road etc. and based upon the appropriate certification, motor vehicles are allowed on the road and registration under Motor Vehicle Act is granted thereafter only. In the present case, appellant had approached the Automotive Research Association of India, Pune who after examination has granted the requisite certificate. A perusal of the application and certificate indicates that the items in question have all ingredients of motor vehicle.

17.3 We also note that the items in question are considered as Automobiles and requires to meet Air Pollution norms and under the Air (Prevention and Control of Pollution) Act, 1981.

17.4 We also note that Hon'ble Supreme Court in the case of Bose Abraham Vs. State of Kerala & Anr. (supra), while considering the exigibility of excavators and road rollers to tax under the Entry Tax Act, has observed:

"The short question that arises for consideration in these appeals is whether motor vehicles as defined in Section 2(28) of the Motor Vehicles Act would include excavators and road rollers so as to attract the levy under Kerala Tax on Entry of Motor Vehicles into Local Areas Act [hereinafter referred to as the Act].

We hold that the excavators and road rollers are motor vehicles for the purpose of the Motor vehicle Act and they are registered under that Act. The High Court has noticed the admission of the appellants that the excavators and road rollers are suitable for use on roads. However, the contention put forth now is that they are intended for use in the enclosed premises. Merely because a motor vehicle is put to a specific use such as being confined to an enclosed premises, will not render the same to be a different kind of vehicle. Hence, in our view, the High Court has correctly decided the matter and the impugned order does not call for any interference by us. However, the question whether any motor vehicle has entered into a local area to attract tax under the Entry Tax Act or any concession given under the local Sales Tax Act will have to be dealt with in the course of assessment arising under the Entry Tax Act. Appeals are accordingly dismissed."

17.5 We note that Hon'ble Supreme court in the case of M/s. Central Coal Fields Ltd. (supra), while considering the issue about taxation of Dumper and Rocker under motor vehicle Act,1988 has observed as under:-

7. learned Counsel for the appellants in these appeals have not challenged the view of the High Court regarding vires of the impugned Act before us or to its retrospectively but have addressed us only on the fact situation to contend that the Dumpers (which includes Rockers) are vehicles not adapted for use upon roads and, therefore, they are outside the scope of Section 2(b) of the impugned Taxation Act, 1975 and hence not within the ambit of the charging Section. Section 3(1) provides that subject to the other provisions of the Act, on and from the date of commencement of the Act, there shall be levied on motor vehicles, used or kept for use within the State, a tax at the rate specified under the Schedule. It is evident that the tax is chargeable on using or keeping for use a motor vehicle; a motor vehicle adapted for use on roads. Not it has to be seen whether Dumpers and Rockers are motor vehicles adapted for use on roads.

8. Reverting back to Bolani Ores case, it would be found that the pre-amendment definition of Section 2(18) conveyed that though they were motor vehicles as such, within the meaning of the first part of the definition, but nonetheless were not so because of their specified user, i.e., if they were used solely upon the premises of the owner. It would also be found that under the post-amendment definition, though a motor vehicle may be adapted for use upon roads, nonetheless in order to be taken out of the category it had further to be adapted for use only in a factory or in any other premises. But here no new facts have been pleaded by the appellants before the High Court as to how the Dumper/Rocker was a vehicle of a special type, adapted for use only in a factory or in any other premises. When Dumpers and Rockers were held registrable by this Court under the Act, it commended to this Court to hold that Dumpers and Rockers were definedly motor vehicles adapted for use upon roads, as otherwise they would have been held not so within the meaning of motor vehicle'. Rather the case of Bolani Ores (one of the appellants before us) then pointedly pleaded was that Dumpers were used for transporting ore from the mining faces to the crushing and screening plant or from head mine stock pile to near railway siding. Dumpers were thus shown to be vehicle engaged in the transport of goods.

9. It would be appropriate now to mention that some documentary material was sent to us by the appellants by means of an affidavit after we had reserved judgment. That material is suggestive of the fact that Dumpers in some States are granted permission to run on public roads at a speed not exceeding 10 kms. Per hour and on bridges and culverts at a speed not exceeding 8 kms. Per hour. From this it is suggested that they have a minimum weight and safe laden weight fixed on some principles. Pictures of various types of Dumpers have also been sent to us which indicate prominently one factor that these Dumpers run on tyres, in marked contrast to chain plates like cater pillars or military tanks. By the use of rubber tyres, it is evident that they have been adapted for use on roads, which means they are suitable for being used on public roads. The mere fact that they are required at places to run at a particular speed is not to detract from the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles make it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the Dumpers or Rockers as suggested are heavy and cannot move on the roads without damaging them is not to say that they are not suitable for use on roads. The word adapted' in the provision was read as suitable in Bolani Ores case by interpretation on the strength of the language in Entry 57, List-II of the Constitution. Thus on that basis it was idle to contend on behalf of the appellants that Dumpers and Rockers were neither adaptable nor suitable for use on public roads. Thus on, the fact situation, we have no hesitation in holding that the High Court was right in concluding that Dumpers and Rockers are vehicles adapted or suitable for use on roads and being motor vehicle per se, as held in Bolani Ores case, were liable to taxation on the footing of their use or kept for use on public roads; the network of which, the State spreads, maintains it and keeps available for use of motor vehicles and hence entitled to a regulatory and compensatory tax. (Exemptions claimable apart). The appellants, therefore, in our view, have not case for grant of any relief in these appeals.

17.6 We also note that Hon'ble High court of Madras in the case of Ashok Leyland Ltd.(supa) has held that:-

"Merely because the equipment in this case viz. Beaver Rear Dumper is capable of being put on the road and is also capable of carrying loads over long distances, it does not cease to be an equipment coming within the definition of a motor vehicle'. Even though Beaver Rear Dumper would not come within the definition of a vehicle used for weight lifting or earth moving, it is not in dispute that it is a specialized material handling equipment. This specialized material handling equipment i.e. the tipping gear and the steel body, which forms the container for moving and handling the material, is mounted on the chassis. This mechanism is intended to move materials from one place to another and to dump them in a chosen site. Such a specialized material handling equipment is similar to earth moving machineries and, therefore this vehicle as a whole would come within the definition of motor Vehicle' and would attract the benefit of The Explanation of Tariff Item 34."

17.7 We also note that three member bench of this Tribunal in the case of Sociedade De Fomento And Others (supra) while considering question whether Dumpers, Loaders and Tractors are classifiable as conveyances under Item 75 of the Indian Tariff Act, 1934 or a mining machinery under item 72(18) ibid has held that Dumpers, Loaders and Tractors are conveyances and not a mining machinery.

17.8 Ld. Senior Advocate for the appellant has relied upon Hon'ble Supreme Court judgement in the case of Goodyear India Ltd. Vs. U.O.I reported in 1997 (92) ELT 14 (S.C.). We have gone through the said judgment. The issue before the Hon'ble Supreme Court was whether tyres of the size 1800 mn and above meant for fitment to heavy moving vehicles such as dumpers and earthmovers mainly used at construction site is to be classified as "tyres for motor vehicle". At the relevant time tyres were classified under three categories viz. for motor vehicles, for cycles & all other tyres. Further, Item NO. 34 defined motor vehicles. It is in this context that Hon'ble Supreme Court has held that such tyres cannot be considered tyres of motor vehicles. In present case issue is whether parts, components and assemblies of Loader, Backhoe Loader & Road Roller can be considered as Parts, components and assemblies of automobiles. In our view, Hon'ble Supreme Court judgement does not help the cause of Respondents.

17.9 Another judgment quoted is that of Hon'ble Rajasthan High Court, in the case of Commissioner of Income Tax Vs. Gotan Lime Stone Khanij Udyog reported in 2007(173)-GJX-0443-RAJ. Here the issue was road transport vehicles were excluded from the Investment Allowance and Income Tax department was denying the Investment Allowance considering tipper and hydraulic excavator as road transport vehicle. Hon'ble High Court took the view that these are non-transport vehicle by virtue of explanation attached to the definition. We do not consider this helps the cause or respondents as issue is about Parts, Components & Assemblies of Automobiles and not of non-transport vehicles.

17.10 To us the inevitable conclusion from the facts as also various judicial pronouncement is that Loader, Backhoe Loaders & Road Rollers are motor Vehicle.

18.1 The next question that arises is having come to the conclusion that Loader, Backhoe Loaders & Road Rollers as motor vehicle, whether parts, components and assemblies of three items are "Parts, components and assemblies of Automobile."

18.2 The word automobile' is not defined in the Central Excise Act or Central Excise Tariff Act. Ld. Senior Advocate for respondent have quoted meaning of the said term from various dictionaries. From the said meaning, it appears that word is used for what is popularly understood as car. Some dictionaries extend it to vehicles carrying small quantity of goods. However, this understanding is very different then that given in various Acts/Rules for example, Automobile Cess Rules, 1984 defines to mean motor cars, buses, tracks, jeep type vehicle vans, scooters, motorcycle, moped and the like. If one goes by dictionary meaning buses, tracks, vans, scooters, motorcycle, moped are not automobiles. The term automobile is defined in the Air (Prevention and Control Pollution) Act to mean any vehicle powered either by internal combustion engine or by any method of generating power to drive such vehicle by burning fuel. In our view this definition though indifferent Act with different purpose will be nearer to the normal understanding of the term as on day. It may be true that concept of automobile started with car, which was thereafter technologically advanced to buses, truck, scooters, motorcycle, moped and then various special purpose vehicles such fire tender, ambulance, as also agricultural tractors, construction equipment vehicle etc. The term automobile, therefore might have started with car to carry few person but as on day extends to whole range of motor vehicles.

18.3 In fact, almost similar issue arose before this tribunal in relation to seats of tractors and earthmoving machinery, to be considered as seats of automobile or not in the case of Krishna Fabricators P. Ltd.(supra). In the said case, this tribunal observed:-

"38. The expression automobile' has a wider connotation - one which runs by its own motor - internal combustion engine.

39. Motor vehicle has been defined as a motor driven vehicle for use on roads and highways.

40. In both the exemption Notifications No. 91/68-C.E. and No. 61/86-C.E., the expression "automobiles" has been used along with the "railway carriages" and the "air-crafts". Railway carriages' move on fixed rails, and the aircrafts' fly in the air and run on the runways. Taken all the three - automobiles, railway carriages and aircrafts - together, they cover a very wide area.

41. The word automobile' was first used in France in the late 1880s. It comes from the Greek word Auto meaning self, and the French word Mobile meaning moving. Literally, it means a self-propelled vehicle.

42. While its dictionary meaning is motor-car', the way the expression "automobile" has been used in the Notification along with railway carriages and the aircrafts, any restricted meaning given to it does not appear to be consistent with the scheme discerned from the reading of the notifications as a whole.

43. As observed by the Hon'ble Supreme Court in the case of Jain Engineering Company v. Collector of Customs, Bombay, 1987 (32) E.L.T. 3 (S.C.), paragraph 7, when the intention is clear and manifest it will be unreasonable to take a narrow view of the Notification.

44. As explained by the Hon'ble Supreme Court in Collector of Central Excise v. Parle Exports Private Ltd. [1989 (38) E.L.T. 741 (S.C.)] and Tata Oil Mills Company Ltd. v. Collector of Central Excise [1989 (43) E.L.T. 183 (S.C.)], in interpreting the scope of any Notification, the Court has first to keep in mind the object and purpose of the Notification. All parts of it should be read harmoniously in aid of and not in derogation of that purpose.

45. According to the "Noscitur A Sociis" principle, which means that "the meaning of a word is to be judged by the company it keeps", it could be safely said that the exemption was intended to all variants of steel seats for carriage or conveyance used on land, on rails or space. Of course here in place of a restricted meaning, by the principle of Noscitur A Sociis, it appears natural that a larger meaning is imparted to the expression "automobile".

46. Even in the Automobile Cess Rules, 1984, relied upon by the Collector of Central Excise, Bangalore, a wider meaning has been given to the expression "automobiles"."

18.4 We find that in the impugned order, adjudicating authority has brushed aside the said case law on the grounds that it is in the context of exemption and not classification. We are unable to appreciate this reasoning.

18.5 We also note that "Parts, components and Assemblies of Automobiles" is further qualified by "falling under any heading of the tariff", both in the third Schedule to the Central Excise Act as also Notification No. 11/2006. Thus the expressions used are very very wide and does not restrict to few parts or assemblies but to all parts and falling under any heading of the whole schedule to Tariff. We also note that a large number of such parts, components and assemblies are interchangeable indifferent types of vehicles (though manufacture assign their part numbers). Thus keeping in view the way the two expression "parts, components and Assemblies of Automobiles" and "Any heading" is used, we consider that Parts, components, and assemblies of Loader, Backhoe Loader and Road Roller are covered by the said entry/expression.

18.6 We also find that this conclusion of ours also get support from the changes made in February/April 2010. In order to avoid the terminology automobile, (being not defined in Act/Tariff) specific heading of the Central Excise Tariff were introduced in the Notification No. 49/2008-C.E. (NT) in February 2010 vide Notification NO. 9/2010-C.E.(NT). Apparently this was done in haste and Government had to further amend the amendment made in February, 2010 within two months to specifically include headings relating to earth moving machinery. Not only this, corresponding amendment in Third Schedule was forgotten and the next year retrospectively amendment had to be brought with effect from 27.02.2010/29.04.2010. Thus a holistic look of these amendments, only supports that Parts, components and assemblies of automobiles included that of Loader, Backhoe Loader & Road Roller and were covered from June, 2006 onwards.

18.7 One of the contention of Ld. Senior Advocate is that Board's Circular dated 16.12.2008 stated that hydraulic excavators cannot be treated as automobiles and this Circular is binding on Revenue Officials and a stand contrary to that is not permissible. We have gone through this Circular. We note that this is not a Circular under Secitn37B of the Central Excise Act so as to make it binding on the officials. We also note that this Circular does not clarify which type of hydraulic excavators is being discussed. Hydraulic excavators having their own track are not considered as motor vehicle or automobile. Further we note that this Circular is based upon Circular No. 22/90-CX.4 dated 11.07.1990. At that point of time Hon'ble Supreme Court judgement in the case of Bose Abraham (supra) holding that excavator and road rollers are motor vehicles was not available. We also note that this tribunal has already held contrary to what is stated in the Circular dated 11.07.1990 in the case of Krishna Fabricators p. Ltd. (supra) which is turn relied upon Hon'ble Supreme Court and Hon'ble Madras High Court judgements. It appears to us that Circular dated 16.12.2008 has been issued without taking into consideration above mentioned judicial decisions. We also note that this circular was not issued in 2006 when "Parts, components and assemblies of Automobiles" were brought into Third Schedule to the Central Excise Act or specified under Section4A (which would have indicated the objects and purpose of amendments). It has been issued after almost three years. In any case, it is settled legal position, that Circular contrary to the judicial decision are not binding. A five member Bench of Hon'ble Supreme Court in the case of Collector of Central Excise, Vadodara Vs. Dhiren Chemical Industries reported in 2002 (139) ELT 3 (S.C.) = (2002-TIOL-83-SC-CX) observed:-

"9 We need to make it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue."

18.8 Hon'ble Supreme Court further clarified in the case of Kalyani Packaging Industry Vs. Union of India reported in 2004 (168) ELT 145 (S.C.) = (2004-TIOL-82-SC-CX) as under:-

"6. We have noticed that Para 9 of Dhiren Chemical's case is being misunderstood. It therefore becomes necessary to clarify Para 9 of Dhiren Chemical's case. One of us (Variava, J.) was a party to the Judgment of the Dhiren Chemical's case and knows what was the intention in incorporating Para 9. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all Courts/Tribunals and Bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical's case because of circulars of the Board in many cases the Department had granted benefits of exemption Notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical's case, the Revenue was likely to reopen cases. Thus Para 9 was incorporated to ensure that cases where benefits of exemption Notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where Revenue/Department had already contended that the benefit of an exemption Notification was not available, and the matter was sub-judice before a Court or a Tribunal, the Court or Tribunal would also give effect to circulars of the Board in preference to a decision of the Constitution Bench of this Court. Where as a result of dispute the matter is sub-judice a Court/Tribunal is, after Dhiren Chemical's case, bound to interpret as set out in that judgment. To hold otherwise and to interpret in the manner suggested would mean that Courts/Tribunals have to ignore a judgment of this Court and follow circulars of the Board. That was not what was meant by Para 9 of Dhiren Chemical's case."

18.9 Hon'ble Supreme Court in the case of Commissioner of Customs, Calcutta Vs. Indian Oil Corporation Ltd. reported in 2004 (165) ELT 257 (S.C.) = (2004-TIOL-23-SC-Cus) has observed as under:-

"25. As is evident from Section 151A the Board is empowered to issue orders or instructions in order to ensure uniformity in the classification of goods or with respect to levy of duty. The need to issue such instructions arises when there is a doubt or ambiguity in relation to those matters. The possibility of varying views being taken by the Customs officials while administering the Act may bring about uncertainty and confusion. In order to avoid this situation, Section 151A has been enacted on the same lines as Section 37A of the Central Excise Act. The apparent need to issue such circulars is felt when there is no authoritative pronouncement of the Court on the subject. Once the relevant issue is decided by the Court at the highest level, the very basis and substratum of the circular disappears. The law laid down by this Court will ensure uniformity in the decisions at all levels. By an express constitutional provision, the law declared by the Supreme Court is made binding on all the Courts within the territory of India (vide Article 141). Proprio vigore the law is binding on all the Tribunals and authorities. Can it be said that even after the law is declared by the Supreme Court the adjudicating authority should still give effect to the Circular issued by the Board ignoring the legal position laid down by this Court? Even after the legal position is settled by the highest Court of the land, should the customs authority continue to give primacy to the circular of the Board? Should Section 151A be taken to such extremities? Was it enacted for such purpose? Does it not amount to transgression of constitutional mandate while adhering to a statutory mandate? Even after the reason and rationale underlying the circular disappears, is it obligatory to continue to follow the circular? These are the questions which puzzle me and these are the conclusions which follow if the observations of this Court in the two cases of Dhiren Chemicals Industries are taken to their logical conclusion.

26. I am of the view that in a situation like this, the Customs authority should obey the constitutional mandate emanating from Article 141 read with Article 144 rather than adhering to the letter of a statutory provision like Section 151A of the Customs Act. The Customs authority should act subservient to the decision of the highest constitutional Court and not to the circular of the Board which is denuded of its rationale and substratum under the impact of the authoritative pronouncement of the highest Court. Alternatively, Section 151A has to be suitably read down so that the circulars issued would not come into conflict with the decision of this Court which the Customs authorities are under a Constitutional obligation to follow."

18.10 In view of above case laws, we are of the view that even if the Circular dated 16.12.2008 is with reference to Hydraulic Excavators which are motor vehicle, the same is required to be ignored in view of decisions on the issue by Higher Judicial forums. We therefore do not find any merit in this contention.

18.11 Another contention of Ld. Senior Advocate was that in chapter 73, Heading 7326 910 the words used are "For automobiles and earth moving equipment" and therefore two are different. We do not find any substance in this contention, both the words are used together and therefore indicates that these are same category of goods. In any case, automobile is not defined. We therefore do not find merit in this contention.

18.12 In the result, appeal succeeds on merit i.e. Parts, components and assemblies of Loader, Backhoe Loader and Road Rollers are covered by "parts, components and assemblies of Automobiles."

16. In the case of JCB India Ltd.(supra), parts were of the equipments viz: Loaders, Backhoe Loaders and Road Rollers, while in the present case the parts are of scannia trucks, dumpers, motor graders, wheel loaders, dozers and hydraulic excavators.

16.1. As far as parts of scannia trucks are concerned, even the appellant themselves were paying countervailing duty under Section 4A. Thus, they themselves are admitting that scannia trucks are nothing but automobiles. They never disputed the same before the Customs authorities.

16.2. The next item is parts of dumpers. Dumpers is used for moving the mined material from one place to another and it is also classifiable under Chapter 87. The only argument advanced by the appellant is that since dumpers are used within the mining area these are mining equipment/vehicle and will not be covered by the term automobile. We are unable to appreciate such an argument. If a jeep is used in a mining area it does not stop to be a vehicle or jeep or an automobile. Using a particular vehicle in a particular area will not change the character from automobile to something else. We therefore out rightly reject the appellants contention as far as dumpers are concerned and hold that dumpers are automobile.

16.3. The other items are motor graders and wheel loaders. Both the items work as internal combustion engine and are tyred wheeled. Wheel loader is an item which is used even in cities for removing the garbage from one garbage collection point to dumpers and the trucks. Thus motor graders and wheel loaders move on the roads like any other vehicle though the purpose of these equipments may be to move material from one point to other or on a vehicle, etc. Keeping in view the discussion relating to Loaders, Backhoe Loaders in the case of JCB India Ltd. (supra), in our considered opinion, these items will also be covered by the term automobile.

16.4. The remaining items are dozers and hydraulic excavators. These two items, according to learned counsel for the appellant, are crawler type or chain platesi.e., there is a steel drum and below the steel drum there is a chain on which these items move. Learned counsels submission is that since tyres are not used in these two equipments these cannot be considered as automobiles. We would like to mention that in the case of JCB India Ltd. (supra), equipments which have on a steel drum wheel and move on chain system or crawler, were not being discussed and therefore, the discussion was confined to the tyred wheel mounted equipment.

16.5. We also note that the learned AR has also provided very valuable inputs during argument which were not available while deciding the matter in the case of JCB India Ltd. The learned Commissioner (AR) has submitted copy of the Automotive Industry Standard AIS 53, published in 2005 by the Automotive Research Association of India, Pune wherein road vehicle which include the construction equipment vehicle has been defined as under:

construction equipment vehicle means rubber tyred, (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor roller, dumper, motor-grader, mobile crane, dozer, fork lift truck, self-loading concrete mixer or any other construction equipment vehicle or combination thereof designed for off-highway operation in mining, industrial undertaking, irrigation and general construction but modified and manufactured with on or off or  on and off highway capabilities. The said definition includes excavator and the definition also includes rubber tyred excavator, pneumatic tyred, rubber padded or steel drum wheel mounted, thus, even the crawler steel plate type of excavator which the appellant is claiming would be covered by the said definition/standard. Thus, whether the excavator are running on the rubber tyre or are crawler type i.e., steel drum wheel mounted are all required to be considered in the same category. This is also true for dozer. It is also seen that the same definition is given under the Bureau of Indian Standards viz. IS 1427 (2011). Thus, whether the excavator/dozer that is rubber tyred or steel drum wheel mounted, these are considered as construction equipment vehicle and automotive vehicles and are therefore, would be covered under the broad definition of automobile.

16.6. We also note that the Commissioner (AR) has clearly explained the automotive aspect and the machinery aspect in such automobiles. Just because such automobiles have machinery aspect which helps them use in the construction and mining industry, will not take them away from the term automobile. The assistance provided by the Commissioner (AR) is of great help and fully supports the conclusions already drawn by this Tribunal in the case of JCB India Ltd.

16.7. Keeping in view the definitions submitted by the learned Commissioner (AR) we have no hesitation in holding that whether the equipment is made of rubber tyre or crawler type/steel drum wheel mounted will not make any difference.

17. We find that learned senior counsel has give lot of emphasis on a sentence in para 18.7 of this Tribunals judgment in the case of JCB India Ltd. (supra), wherein, it is mentioned that:

Hydraulic excavators having their own track are not considered as motor vehicle or automobile. We find that this sentence is being taken out of context by the learned senior counsel. The said sentence was written while trying to discuss the Boards Circular dated 06/12/2008 as the said circular though talked about hydraulic excavator, but did not clearly spelt out what type of hydraulic excavator they are talking about. There was no question of this Tribunal holding that hydraulic excavator is not motor vehicles/automobile. This would be contrary to the judgment of the honble Supreme Court in the case of Bose Abraham vs. State of Kerala dated 01/02/2001 (Civil Appeal No. 2779 of 1998 & Ors.) [2001] 121 STC 614 (SC).

18. We find that the learned senior counsel for the appellant in their written submissions after the hearing, has submitted that the said details relating to AIS/53 or BIS 14172 (2011) should not be taken into account as these are not forming part of the show cause notice and the Commissioner (AR) has not followed the CESTAT procedure to produce the same. We do not find any merit in the contention. First of all, the show cause notice propose to consider all the six items including excavator, motor graders, wheel loaders, dozers, etc. under the category of automobiles. It is just that to reach to the correct conclusion additional published material from the Bureau of Indian Standards and Automotive Indian Standards have been produced during the arguments. In fact, learned senior counsel, as a matter of routine, submits such documents before the Tribunal and Tribunal accept such documents. In any case, when these submissions were made and copies of the documents were handed over to the learned senior counsel for the appellant, he was also given time to rebut the contentions of the Commissioner (AR), which he did after a day. Thus, the learned counsel has been given sufficient opportunity to rebut the same.

19. We also note that the learned counsel for the appellant has argued on the binding effect of the circulars. This whole issue has been discussed in para 18.7, 18.8 and 18.9 of this Tribunals order in JCB Indias case reproduced earlier.

20. We also note that Commissioner (AR) has rightly pointed out the judgment of the Constitution Bench of the honble Supreme Court in the case of Ratan Melting & Wire Industries 2008 (231) ELT 22 (SC). In para 7 of the said order, the honble Supreme Court has observed as under:

7. As noted in the order of reference the correct position vis-a-vis the observations in para 11 of Dhiren Chemicals case (supra) has been stated in Kalyanis case (supra). If the submissions of learned counsel for the assessee are accepted, it would mean that there is no scope for filing an appeal. In that case, there is no question of a decision of this Court on the point being rendered. Obviously, the assessee will not file an appeal questioning the view expressed vis-a-vis the circular. It has to be the revenue authority who has to question that. To lay content with the circular would mean that the valuable right of challenge would be denied to him and there would be no scope for adjudication by the High Court or the Supreme Court. That would be against very concept of majesty of law declared by this Court and the binding effect in terms of Article 141 of the Constitution.

21. This judgment of the honble Supreme Court further strengthens the decision taken by this Tribunal relating to the circulars. We also note that the purpose of judicial scrutiny in taxation matter is to reach to the truth of the matter and in reaching to the truth, incorrect interpretation taken by some authority cannot supersede the judicial decision on the issue. We also agree with the Commissioner (AR) that even the circular of 2008 was not binding circular and it would be seen from the circular that it is only suggestive and is not a conclusive or directive circular.

22. We also note from the list of parts submitted during the hearing, the parts are of a type used in various automobile items and keeping in view the fact that the term used in the Notification and Third Schedule is parts, components and assemblies of automobiles, falling under any Chapter (thus not restricted to few parts) which is a very wide term, we are of the view, even the term automobile has to be given a wider meaning. We also note that large number of such parts, componens and assemblies are interchangeable in different road vehicles including construction equipment vehicles. Thus wider meaning to the term automobile is to be given.

23. The next issue is relating to the scope of Section 2(f)(iii), learned senior counsel has submitted that the said section was introduced in 2003 and at that point of time in the explanation to the Finance Bill it was clarified that this would be applicable to items covered under Section 4A. We have gone through the definition as provided under Section 2(f)(iii) which is also reproduced in the earlier part of this judgment. We do not find anything in Section 2(f)(iii) linking the said definition of manufacture to only goods covered by Section 4A. In fact, if that was the intention, there was no need to create a Third schedule in the Central Excise Act, and there should have been a straight linkage in the definition of manufacturer in Section 2(f)(iii) with Section 4A. It may be true that generally items covered by Third Schedule to the Central Excise Act, 1944 are same as covered under Section 4A. What is to be seen is, whether an item is covered by third schedule to the Central Excise Act, and if so, whether the activity carried out is covered by Section 2(f)(iii) and if so the same would be amounting to manufacture. Further, if the goods satisfy the requirements of Section 4A for the purpose of valuation Section 4A will be followed, otherwise valuation will be done under Section 4. In the present case, it is the claim of the appellant that due to the size, certain parts are received in unpacked condition and they are also selling the same unpacked and, therefore, the provisions of Section 4A will not be applicable. Revenue has accepted this position and in respect of such parts, they have proposed valuation under Section 4. We do not find anything wrong in such an approach accordingly the same is upheld.

23.1. Learned senior counsel has further submitted that in respect of unpacked items, they are only putting labels on the parts and mentioning the item number. Only one label is put even though more than one piece of that part is sold. In our considered view, the parts of automobiles is generally understood by certain code number specified by the manufacturer or supplier, in this case, M/s. L&T and the part number is very important while purchasing or selling any part. In fact, even the list of parts submitted during the hearing by learned Commissioner (AR), indicates part number for each item. In view of this fact even putting a tag whether on individual or group would amount to labelling the goods. The fact that these are not put in a container is immaterial.

24. We also note that purpose of Section 2(f)(iii) is to capture value addition and tax the same in respect of items when the retail selling price is very high compared to the ex-factory price. This is particularly true in the case of spare parts of automobile. Spare parts of automobiles are generally priced very high compared to the ex-factory values of such parts. In order to capture the value addition in such situation and for similar items, Section 2(f)(iii) was introduced and the purpose of the said Section will be achieved if activity of putting a tag or label which will identify that part number of the equipment is considered as manufacture.

25. The learned senior counsel has submitted that since the definition of manufacture under Section 2(f)(iii) is a deeming provision, strict interpretation of the same should be given. While we do agree that there should be strict interpretation, however, interpretation should not be so strict so as to defeat the very purpose of deeming provision. In this context we refer to the decision of the honble Supreme Court in the case of Industrial Supplies Pvt. Ltd. vs. Union of India & Others (1980) 4 SCC 341 wherein it was held as under:

25. It is now axiomatic that when a legal fiction is incorporated in a statute, the Court has to ascertain for what purpose the fiction is created. After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion. The Court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction. 25.1. In celebrated passage Lord Asquith of Bishopstone in East End Dwellings Co. Ld. v. Finsbury Borough Council (1952) A.C. 109, said:

If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from, doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. 25.2. In the State of Bombay v. Pandurang Vinayak Chaphalkar and Others [1953] S.C.R.773, Honble Supreme Court held (at page 132) while approving the above passage of Lord-Asquith :

When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logic conclusion. 25.3. In the case of Voltas Ltd. Bombay vs. Union of India Ors. (1995) Supp(2) SCC 498, Honble SUprme Court observed:

The effect of a statute containing a legal fiction is by now well settled. The Legislature by a statute may create a legal fiction saying that something shall be deemed to have been done which in fact and truth has not been done, but even then Court has to give full effect to such statutory fiction after examining and ascertaining as to for what purpose and between what parties such statutory fiction has been resorted to.

26. Thus, considering that putting a tag is not labelling or there is absence of container, etc., in our view, will defeat the purpose of definition given in Section 2(f)(iii). In view of the said position, we hold that even putting the tag on the unpacked parts will amount to manufacture and will be covered under Section 2(f)(iii).

27. Learned senior counsel during the argument has submitted that in respect of the parts of scannia trucks and other parts, which were imported, provisions of Section 2(f)(iii) will not be applicable as the said section would be applicable only for the excisable goods. Learned Commissioner (AR), on the other hand, submitted that the term excisable goods is used under Section 2(d). In third schedule to the Central Excise Act, the term used is goods. Similarly, under Section 2(f)(iii) there is no such requirement that the inputs should be manufactured in India only and cannot be imported.

27.1. We have considered the submissions made by both the sides. For determining whether a particular process amounts to manufacture it is not relevant whether the inputs are locally produced or imported. What is important is the end product and whether the manufacturing process amounts to manufacture or not. In the present case, there is no dispute that the activity undertaken by the appellant amounts to manufacture under Section 2(f)(iii). The fact that inputs were imported is immaterial and hence the submission made by the learned senior counsel is rejected.

28. From the facts of this case, we find that the Notification relating to Section 4A were amended on 27/02/2010 and 29/04/2010. Under the said Notification the term automobile was replaced by specific headings of the Central Excise Act Tariff. Thus, after the said date, there can be no confusion or dispute about the fact that the goods are covered by Section 2(f)(iii) and appellants activities amounts to manufacture. But appellants still did not pay duty. Not a single word is being uttered for such a conduct.

29. Learned senior counsel for the appellant submitted that the third schedule was amended in 2011 with retrospective effect and hence extended period of limitation cannot be invoked. We have given consideration thought to this submission and are of the view that, in the facts and circumstances of the case, the submission is required to be out rightly rejected. Even if it is assumed that they did not pay duty during February/April 2010 to April 2011, due to unamended third schedule, the least that was expected was to pay immediately in April/May 2011. Such a conduct is not expected from a reputed company. In fact, we also observe that at the stay stage the, advocate for the appellant has submitted a worksheet where he claimed that duty liability from February/April 2010 to 30/04/2011 works out to approximately ` 24.33 crores as against ` 27.00 crores already deposited by them during investigation and after issue of demand notice. This duty liability was worked out after adjusting CENVAT credit that would be available to the appellant during the period as also the cenvat credit available on the opening stock. In addition to the CENVAT credit benefit, even the benefit of cum-duty value was taken while computing the duty liability of ` 24.33 crores. Otherwise, the duty liability was working out to ` 55.47 crores. Thus, in the overall factual matrix, there is no case whatsoever for not taking registration, not filing returns or not paying duty after the said dates and it is a clear case of suppression of facts as also contravention of various provisions of Central Excise Rules with intent to evade payment of duty. We therefore, hold that extended period of limitation is correctly invoked.

30. We find that learned counsel for the appellant has given lot of emphasis on the fact that in the case of JCB India Ltd. (supra), this Tribunal has upheld the case on merits in favour of Revenue, however, the benefit of extended period of limitation was extended to the assessee, therefore, similar benefit should be given to them. We have considered this submission. The question of extended period of limitation is a mixed question of facts and law and each case has to be decided on the facts of that case. In the present case, it is an admitted position that the appellant were importing parts of scannia truck and while they were clearing the parts of the scannia trucks they were paying CVD under Section 4A of the Central Excise Act. Thus, it clearly proves that they were aware that duty under Section4A is required to be levied. Once the duty under Section 4A is chargeable on any item, then if such an item is again repacked or re-labelled or any process are undertaken, such activity is considered as an activity of manufacture, then the appellant is required to pay excise duty on the same. It is a different matter that in such cases, at the time of importation CVD would have been paid and the manufacturer will be entitled to take credit of the same and it is possible in some cases there may not be any additional liability. However, the fact remains that the procedure has to be followed and where there is any additional liability or not will have to be checked by the excise authorities. We also observe that even though the appellant was paying CVD on the basis of MRP but they arrived at the MRP based upon certain calculations and not based upon the actual MRP label on the parts. Thus, it was the duty of the appellant to take registration and pay excise duty on the parts of scannia trucks. Other parts, we observe were not being imported by them and were being imported by Komatsu India Pvt. Ltd. and thereafter being transferred / purchased by the present appellant. They were also getting the parts from other local sources. It is also an admitted fact that thereafter they were doing labeling, re-labelling, etc. Such parts included that of dumper. Under the circumstances, it cannot be said that the appellant were not aware of the fact that the goods are covered under Section 4A. The ratio of JCB India Ltd. case (supra) as far as invocation of limitation and penalty, is therefore, not applicable. In that case, M/s. JCB India Ltd. has started paying duty from April 2010. In the present case, even that was not done. Extended period of limitation as also imposition of penalty under Section 11AC is upheld.

31. We also note that, in 2010 when the term automobile were removed from the relevant Notification and was replaced by specific headings of Chapter 84 and 87 and there could have been no doubt or dispute about the coverage of the items under Section 4A. Even then the appellant did not pay the duty under Section 4A. They did not take any registration and continued to do the manufacturing activity and cleared the goods without payment of duty. All the arguments which have been extended by them relating to the scope of the term automobile are not of any relevance or consideration after the said date. There was no reason for them not to pay duty. Even in 2011, when the enquiries were made by the department they did not pay duty for the earlier period. The least that was expected was to pay duty from February 2010 onwards. The overall conduct of the appellant leaves no doubt whatsoever that there was suppression of facts, contravention of provisions of Central Excise Act and Rules with intention to evade payment of duty. In view of this position, we are of the considered view that the ingredients of imposing penalty under Section 11AC are satisfied and we uphold the penalty imposed. Ratio of JCB India Ltd. case (supra) is not applicable.

32. Another contention of the appellant is that in respect of the unpacked goods where the demand has been raised under Section 4, they are entitled to cum-duty benefit. We find that the learned Commissioner (AR) has opposed the same and quoted certain judgments of this Tribunal. We find that on this issue there were contrary judgments of various High Courts/Supreme Court and in order to resolve the issue, under Section 4(1) an explanation was added in 2003 to sort out the issue. The Explanation is as under:

Explanation. - For the removal of doubts, it is hereby declared that the price-cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods.

33. As per the said explanation, in the facts of the present case, the appellant would be entitled to cum-duty benefit. We accordingly extend the same and set aside the impugned order as far as the benefit of cum-duty is concerned.

34. Learned senior counsel for the appellant has submitted that in the event the goods are being held as chargeable to duty under Section4/4A they would be entitled to availment of CENVAT credit on the inputs used. Learned Commissioner (AR) opposed the said submission on the ground that they have not submitted any documents during adjudication or before this Tribunal. Learned senior counsel, on the other hand, submitted that after the personal hearing was over but before the adjudication of the case, they have submitted a CD containing the details of the invoices of the parts received by them during the period. Since the learned counsel has submitted that they have invoices and other documentary evidence to prove the duty-paid nature of the goods received by them and also evidences about the receipt of the goods, etc., in our view, it will be appropriate that benefit of CENVAT credit be extended to them. We also note that during the hearing the learned senior counsel has submitted a chart in respect of parts of each vehicle claiming how much the CENVAT credit would be available. Keeping in view these facts and the fact that the matter was not examined by the Commissioner we remand the matter for the limited purpose of examining these documents regarding admissibility of CENVAT credit as per law and in case the appellant is eligible for CENVAT credit the same should be extended.

34.1. The appellant will extend necessary cooperation and produce all the documents on its own, such as invoices, etc. and any other document required by the Commissioner without any delay. This exercise should be completed within 3 months from the date of receipt of this order. If the duty liability gets reduced due to the said exercise, as also cum-duty benefit, penalty imposed under Section 11AC will also get reduced to the same extent.

35. We find that in the impugned order, the goods cleared during the period 2007 to 2011 were confiscated under Rule 25 and redeemed on redemption fine. We note that the goods which are liable for confiscation but are not available for confiscation. Moreover, keeping in view the nature of the dispute, in our opinion, confiscation and consequent redemption fine is not in order. We set aside the confiscation of the goods and related redemption fine.

36. We find that penalty of ` 1 lakh has been imposed on Shri J Kumar, who is the Head  Finance & Accounts of L&T Construction and Mining Machinery. We have gone through the order. Statement of Shri J Kumar was also recorded. We do not find anything which would indicate that Shri J. Kumar was in personal knowledge that the goods being cleared were liable to confiscation. Under the circumstances the penalty imposed by the adjudicating authority is not in accordance with law and we set aside the penalty imposed on Shri J Kumar. Appeal of Shri J Kumar is allowed.

37. We find that in the present case two show cause notice had been issued. The second show cause notice was relating to the goods seized at the dealers premises, M/s. Proficient Equipment Solutions, Nagpur. As discussed, the searches were carried out in June 2011 and there could have been no doubt whatsoever that the goods were liable to payment of duty under Section 4A/Section 4 and the goods were cleared without payment of duty. The confiscation of the goods is therefore, in order. The penalty under Section 11AC is also in order. In case, these goods in part or full are also covered by the other show cause notice, duty confirmed in other show cause notice will be reduced accordingly. We also find that a penalty of ` 2,69,144/- has been imposed on M/s. Proficient Equipment Solutions, Nagpur under Rule 26. We do not find anything in the order or in the statements which suggest that the M/s. Proficient Equipment Solutions, Nagpur had knowledge that the goods purchased by them are liable to confiscation. Under the circumstances, penalty imposed under Rule 26 on M/s. Proficient Equipment Solutions, Nagpur is set aside.

38. In addition to some of the case laws discussed in the preceding paragraphs, both the sides have quoted very large number of case laws in support of various contentions made by them. We have gone through the said judgments and we have kept in mind the reasoning advanced or the law laid down in those judgments while arriving at the conclusions in the preceding paragraphs. However, we do not find it necessary to discuss each and every judgment in this order.

39. All the appeals are disposed of in the above terms.

(Pronounced in Court on 08/10/2015) (S. S. Garg) Member (Judicial) (P.K. Jain) Member (Technical) */as 2