http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  1367-1369 of 2002

PETITIONER: Tata Engineering & Locomotive Co.Ltd

RESPONDENT: Commissioner of Central Excise, Jamshedpur

DATE OF JUDGMENT: 29/11/2007

BENCH: ASHOK BHAN & V.S. SIRPURKAR

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO(S). 1367-1369 of 2002 With CIVIL APPEAL NO(S). 1370-1372 of 2002

BHAN, J.

1.       The assessee-appellant is, inter alia, engaged in the  manufacture of chassis for various models and parts thereof  falling under Chapter 87 of the Central Excise and Tariff Act,  1985 (for short "the Tariff Act") at its factory at Jamshedpur

2.      The appellant manufactures motor vehicles of various  models. For each model the parts are according to its  configuration and technical specifications and the price is  also declared accordingly to the department.  In other words,  the value of the chassis depends upon its firments.  All the  chassis in question had been actually fitted with Engine No.  697 NA and Gear Box GBS 40.  There is no dispute on this  factual position between the parties.

3.      The appellant submitted the price list dated 1.11.1994  and 1.4.1995 wherein it was mentioned that the chassis of  model no. 1612 is fitted with engine no. 692 DI engines and  GBS 30 gear box whereas the chassis in question were fitted  with engine no. 697 NA and gear box GBS 40.  Relying on these  price lists, Department raised differential demand and issued  show cause notices to the appellant dated 22nd June, 1995, 4th  July, 1995 and 1st November, 1995.  In these notices, it was  assumed that the appellant has collected Rs.15,290/- per  chassis over and above the value declared in the price lists.   This demand was confirmed by the Commissioner-respondent.   Against the order of the Respondent, the appellant filed  appeals before the Tribunal.

4.      On 31st October, 2000, the Tribunal passed a final order  dismissing the appeal filed by the appellant.  The contentions  of the Appellant that they have paid duty at its invoice price  on all clearances of chassis of model no. 1612 and that they  have never recovered any amount over and above the invoice  price from their customers, was not taken into account by the  original Bench of the Tribunal dismissing the appeal.   Therefore, appellant filed an application for rectification of  mistake.  Thereafter, the Tribunal passed order dated 11th  January, 2001, dismissing the application for rectification of  mistake.  However, while passing the order on the application  for rectification of mistake, a difference of opinion arose in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

the matter.  The Member (Judicial), who was a party to the  original Bench, allowed the application for rectification of  mistake and ordered rehearing of the appeal.  Learned Member  specifically held that the appellant did urge this ground  during the earlier arguments.  The Member (Technical)  dismissed the application on the ground of inherency.  The 3rd  Member who heard the matter referred to, agreed with the  Member (Technical).

5.      The present appeals have been filed by the appellants  challenging the order dated 31st October, 2000 passed by the  Tribunal as also the order dated 8th October, 2001 on the  application for rectification of mistake.

6.      Mr. Lakshmikumaran, learned counsel appearing for the  appellant, submitted that there was a clerical /typing error  in the price lists dated 1st November, 1994 and 1st April, 1995  filed by the appellant.  In other words, his case is that due  to oversight engine no. 692 and gear box GBS 30 was mentioned  instead of engine no. 697 NA and GBS 40, which are indeed  standard fitments for all vehicles of chassis of model no.  1612.  That, for the period prior and subsequent to 1st  November, 1994 and 1st April, 1995, price lists indicating  engine 697NA and gear box GBS 40 as a standard fitment have  been accepted by the Department and no duty demand has been  raised for that period.  He also relied upon the statutory  cost audit report as well the certification from Automobile  Research Association of India.  That in the absence of any  finding directly or indirectly to suggest that the appellant  had collected the amount of Rs.15,290/- for each chassis over  and above the price declared at the time of clearance of the  goods at the factory gate, the order passed by the authority- in-original as well as the Tribunal was perverse and  arbitrary.

7.      As against this, Mr. K. Radhakrishnan, learned senior  counsel appearing for the Department, supported the findings  recorded by the Tribunal.

8.      We find substance in the submissions advanced by Shri  Lakshmikumaran, learned counsel appearing for the appellant.   For the periods prior and subsequent to 1st November, 1994 and  1st April, 1995, price lists indicating engine no. 697NA and  gear box GBS 40 as a standard fitment have been accepted by  the department and no demand for additional duty has been  raised for that period.  The statutory cost audit report of  the company also mentioned that engine no. 697 NA and gear box  GBS 40 are the standard parts of the chassis of model no. 1612  which has not been considered by the Tribunal.  Certification  from Automobile Research Association of India, which is a  mandatory requirement under the Central Motor Vehicles Rules  and VRDE, also shows that the specification of chassis of  model no. 1612 are engine no. 697NA and gear box GBS 40.  This  aspect has also been overlooked by the Tribunal while passing  the order.

9.      Further, it is also clear from the invoices raised by the  appellant during the disputed period that engine no. 697NA and  gear box GBS 40 are not mentioned  as  additional fitment but  as a standard fitment and full duty has been paid on that  basis.  Had the standard fitment of chassis of model no. 1612  been engine no. 692 DI and gear box GBS 30, then the appellant  would have charged separately for fitting the chassis with  engine no. 697NA and gear box GBS 40 as additional fitment,  but in fact it is not so.  

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

10.     Central excise duty is payable under Section 4 of the  Central Excise Act.  Under Section 4(1)(a) of the Excise Act  when the goods are sold for to an unrelated person and price  is the sole consideration, then the assessable value of the  goods is transaction value at the time and place of removal /  delivery of the goods.  Appellant has paid excise duty on the  entire price charged by it from its customers in respect of  sales made at the factory gate and no extra amount was   realized over and above the invoice price.  Even in respect of  sales made from the depot, the amount of Rs.15,290/-, as  alleged, has not been charged from the buyer.  The invoices  evidencing payment of duty on the entire amount collected from  the buyer are also on record and the department has not  disputed this position.  Either in the order of the authority- in-original or in the order of the Tribunal, there is no  finding directly or indirectly to suggest that the appellant  had collected the amount of Rs.15,290/- for each chassis over  and above what it had charged at the time of the clearance of  the goods at the factory gate.  In the absence of any evidence  or a finding recorded by the Tribunal on the basis of such  evidence, the findings recorded by the Tribunal that there is  a short levy of the payable excise duty to the tune of  Rs.15,290/- for each of the chassis, is not sustainable.

11.     For the foregoing reasons, the appeals are allowed the  impugned orders of the Tribunal as well as that of the  Original Authority are set aside.  Follow up action, if any,  in terms of this Judgment be taken henceforth.  The parties  are left to bear their own costs.