1. One of the appeals is by the Revenue and the other by the assessee, both against the same order of the Commissioner (Appeals). The assessee is engaged in the manufacture of what they call "Dumper" [SH 8704.30] and the department calls 'Dumper Chassis" [SH 8706.49]. A show-cause notice was issued to them for recovery of National Calamity Contingent Duty (NCCD) at 1% on the "dumper chassis" in terms of Section 136 of the Finance Act, 2001 and for imposing penalty for nonpayment of NCCD.The original authority confirmed the demand against the assessee and imposed on them a penalty of Rs. 10,000/- after holding that (a) the assessee's product was only dumper chassis [SH 8706.49] and could not be considered as 'incomplete or unfinished dumper having the essential character of dumper' for classification under SH 8704.30; (b) NCCD was leviable on this product and (c) the benefit of Notification No.67/95-CE was not available to NCCD. In the appeal filed by the assessee, learned Commissioner (Appeals) endorsed the view taken by the lower authority that their product was dumper chassis rather than dumper. But the appellate authority held NCCD to be a duty of excise for purposes of Notification No. 67/95-CE and accordingly granted the benefit of exemption to the assessee. At present, the assessee is aggrieved by the concurrent view taken by the lower authorities to the effect that their product is dumper chassis and not dumper. The Revenue is challenging the grant of exemption under Notification No. 67/95-CE to the assessee in respect of NCCD.2. After hearing both sides and considering the case law cited by them, we find that the question whether NCCD is a duty of excise for purposes of Exemption Notifications issued under Section 5A of the Central Excise Act has been considered and answered in the affirmative in Toyota Kirloskar Motor Pvt. Ltd. v. CCE, Bangalore 2007 (82) RLT 828 (CESTAT - Ban.), wherein the benefit of Notification No. 108/95-CE dated 28.8.1995 was held to be admissible to NCCD leviable under Section 136 of the Finance Act, 2001. We agree with that decision, which was rendered after examining the relevant provisions of the Finance Act and considering a Circular of the CBEC. The contention raised by the Revenue that NCCD is only a surcharge and not a duty of excise cannot be accepted. The Revenue, in their appeal, has also claimed support from the Supreme Court's judgment in Union of India and Ors. v. Modi Rubber Limited and Ors. wherein it was held that exemption from duty of excise did not mean exemption also from Special Excise Duty, Additional Excise Duty or Auxiliary Duty. We find that this case law is not applicable to NCCD in view of Sub-section (3) of Section 136 of the Finance Act, 2001, which reads as under: (3) The provisions of the Central Excise Act, 1944 and the rules made there under, including those relating to refunds and exemptions from duties and imposition of penalty, shall, as far as may be, apply in relation to the levy and collection of the National Calamity duty leviable under this section in respect of the goods specified in the Seventh Schedule as they apply in relation to the levy and collection of the duties of excise on such goods under that Act, as the case may be.
4. The question arising in the assessee's appeal is whether their product is 'dumper' as claimed by them or 'dumper chassis' as claimed by the Revenue. It is the submission of the assessee that the item has the essential character of a dumper and, therefore, as per Rule 2 of the Rules of Interpretation of the First Schedule to the Central Excise Tariff Act, it should be classified as the finished goods [dumper]. We have seen pictures of the product in question and a fully built dumper.
Both have the body of a driver's cabin built on the chassis. The only difference appears to be is that the product in question does not have the rest of the body of the fully built dumper. It is this part of the body of dumper which is lifted by the tipping cylinder. Materials collected inside this box-like body can be dumped by this lifting mechanism. It appears to us that the tipping cylinder along with the hydraulic pipelines present in the chassis, alone, cannot bring about dumping of materials. The box-like body is also essential for this purpose. Hence it cannot be said that the product in question, which does not have the box-like movable body, has the essential character of a fully built dumper. Hence the subject goods can only be classified under SH 8706.49 as dumper chassis and not under SH 8704.30 as dumper.
(Operative portion of the order was pronounced in open court on 23.4.2008)