P.R. Chandrasekharan, Member (Technical)
The appeal is directed Order-in-Appeal No. 116/2003 (JCH) dated 9.7.2003 passed by the Commissioner of Customs (Appeals), Mumbai.
2. The facts for consideration in this case are as follows. M/s. Ashok Leyland Ltd., the appellant, filed a bill of entry no. 537187 dated 27.12.2001 for clearance of goods described as ‘import of exported goods chassis sent for body building bus-body model Inter Century (Model 11.2, No.150807-CH No. WLE 468819) in two numbers under home consumption. The country of origin was declared as ‘India and Spain’. They claimed duty exemption under Notification no. 94/96-Cus dated 16.12.1996 for payment of duty only on the value of the body of the bus as the goods (chassis) were claimed to be exported earlier. The same were subjected to first check examination. On examination, it was found that the goods were buses and the chassis and engine no. were the same as those indicated in the export documents. The report also stated that the buses are fitted with a few fitments such as Air conditioner, T.V., video, Coffee maker, music system of Pioneer brand and refrigerator. The adjudicating authority denied the benefit of Notification 94/96-Cus on the ground that in the case under consideration the goods exported were chassis with engine without body whereas the goods imported were fully built buses along with fittings such as Air conditioner, T.V., video, Coffee maker, music system and refrigerator. Since the goods re-imported were not the same as exported, he denied the benefit under aforesaid Notification and directed that the goods be assessed on merits at the applicable rate of duty. The appellant filed an appeal before the Commissioner (Appeals) who vide the impugned order dismissed the appeal and upheld the order of the lower adjudicating authority. Hence the appellants are before us.
3. The ld. counsel for the appellant submits that the benefit of Notification 94/96 has been wrongly denied to them. The said Notification, vide sr.no.3 of the table annexed thereto, grants exemption on the goods exported when re-imported into India provided that the goods are the same which were exported. As per explanation ‘A goods shall not be deemed to be the same if they are re-imported from abroad after being subjected to remanufacturing or re-processing, recycling or recasting.’ The ld. advocate relies on the judgement of the Hon'ble Punjab and Haryana High Court in the case of Darshan Singh Pavitar Singh reported in 1988 (34) ELT 631 wherein it was held that building of body on chassis does not amount to ‘manufacture of motor vehicle’ and it will continue to be body building only. She also relies on the decision of the Hon'ble Apex Court in Ram Body Builders 1997 (94) ELT 442 wherein it was held that bus/truck bodies built on chassis supplied by the customer will be classifiable as bodies only heading 87.07 of the Central Excise Tariff. She further relies on Patnaik and Company vs. State of Orissa 1965 (XVI) STC 364 wherein it was held that the contract for construction of bus body on chassis is a works contract and the consideration paid is taxable under the Orissa Sales Tax Act. She also relies on the judgment of the Apex Court in State of Karnataka vs. Azad Coach Builders Pvt. Ltd. [2010] 36 VST 1 (SC) wherein the interpretation of Section 5(3) of the Central Sales Tax Act was considered by the Apex court and it was held that, ?
i) to constitute a sale in the course of export, there must be an intention on the part of the buyer and the seller to export.
ii) The obligation may arise by reason of statute or contract between the parties or from mutual understanding or agreement between them, or even from the nature of the transaction which links the sale to export.
iii) To occasion the export thee must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connect with the one immediately preceding it, without which a transaction of sale cannot be called a sale in the course of export of goods outside the territory of India.
iv) The phrase ‘Sale in the course of export’ comprises in itself three essentials:
(i) that there must be a sale;
(ii) that goods must actually be exported; and
(iii) that the sale must be a part and parcel of the export.”
4. The ld. Appraiser AR for the revenue submits that as far as the customs duty is concerned, the goods have to be assessed as presented and in the case under consideration the goods as presented before the customs were fully built buses, while what was exported was only chassis fitted with engine. Therefore, the provisions of Notification 94/96-Cus does not apply to the facts of the case. He relies on the judgment of Tribunal in Ford India 2008 (228) ELT 71 and the judgment of the Hon'ble Apex Court in Hewlett Packard 2007 (215) ELT 484 (SC) in support of his above conventions.
5. We have carefully considered the rival submissions.
6. At the time of exportation of the chassis with engine without the body, the appellant had declared the export product as, -
“Chassis manufactured by Ashok Leyland Limited, Hosur Plant, India
A) Export Product: Ashok Leyland Rear Engine Panther Chassis Manufactured by Ashok Leyland Limited, Hosur Plant, India
B) Result import product:
Fully built Ashok Leyland Rear Engine Panther A/C Bus (Chassis Manufactured by Ashok Leyland Limited, Hosur Plant 1, India and Bus body with ‘HISPACOLD’ A/C to be built by IRIZAR S COOP, (Spain) Chassis being sent for body building purpose and return (Re-import)”
When the goods were imported they were examined and the examination revealed the following:-
“Inspected lot of two buses examined all checked description quality, verified Chassis no., engine nos., w.r.t export documents verified goods i.e. chassis and engine no. are of Indian origin. Established identity of engine and chassis no. w.r.t. export documents. Further supplier has confirmed vide fax dated 29/12/2001that following standard fitments in this coach
(i) TV/Video equipments
(ii) Coffee maker
(iii) Pioneer Music System
(iv) Refrigerator (24 volts) detailed vide invoice no. 211775 and 211776 dated 29/11/2001
Examined under Dy. Commissioner/Docks supervision. Bill of Entry forwarded to Group for necessary action please.”
7. From the above facts, it is clearly seen that the goods under exportation was chassis fitted with engine whereas the goods under importation was a fully built bus with many fittings and attachments. Under the Indian Customs Tariff, chassis fitted with engine falls under heading No. 8706 whereas buses fall under heading No. 8702. For the purpose of levy of customs duty, the goods have to be assessed ‘as presented before the customs.’ In the case under consideration the goods at the time of importation as presented were fully built buses containing fitments such as Air conditioner, T.V., video, Coffee maker, music system and refrigerator. The goods which were exported were (as declared by the appellant) chassis fitted with engine. Notification 94/96 stipulates that for availing the benefit thereunder, the goods should be the same which were exported. In the instant case it is clear that they are not the same and therefore, the lower authorities have correctly rejected the claim of the appellant for benefit under Notification 94/96.
8. The reliance placed by the ld. advocate on Darshan Singh Pavitar Singh does not help as in that case the Hon'ble High Court was examining the issue whether building of bodies for buses and trucks on the chassis supplied by the customers would amount to manufacture of motor vehicle under 2(f) of the Central Excise Act, 1944 and covered under heading no. 8707. The Hon'ble High Court held that the activity undertaken amounts to manufacture of bus bodies and not buses. Similarly, in case of Ram Body Builders relied upon by the ld. advocate, the issue was classification of bus/truck body wherein it was held that the bus body was classifiable under heading No. 8707. In both these cases, the issue before the Court was whether the activity of building bus body on a chassis would amount to manufacture of bus body or manufacture of bus and as per the tariff description as it stood at the relevant time, it was held that the activity was one of manufacture of bus bodies. In the case of Patnaik, the issue before the Court was whether the construction of a bus body on a chassis is a works contract or not and it was held that it was a works contract and sales tax can be levied only on the consideration received for the construction of bus bodies. Similarly, in the case of Azad Coach Builders decided by the Supreme Court, the issue before the Court was the meaning of the phrase ‘sale in the course of export’ and the Hon'ble Supreme Court held that said phrase comprises of (i) that there must be a sale; (ii) that goods must actually be exported; (iii) that the sale must be a part and parcel of the export. The facts arising for consideration in all the above mentioned cases and the decisions rendered thereon have no relationship whatsoever to the facts of the case before us.
9. The case under consideration before us is one of re-importation, i.e., whether the goods exported were re-imported as such or the goods re-imported were different from those exported. There is no dispute on this fact at all. The goods under export were chassis fitted with engine, while the goods imported were fully built buses along with standard fittings and equipments. As already noted above, these two goods are not one and the same and therefore the condition for availing benefit of Notification 94/96 that the goods are the same which were exported is not satisfied.
10. This Tribunal in Ford India case (supra), in a similar set of facts, held that benefit of said Notification would not be available in a case where any goods exported are re-imported after fitment to and assemblage with other goods, abroad cannot be considered to be satisfying the condition under Notification 94/96. In the said case fuel injection pumps and injections were exported for fitment to diesel engines abroad. The goods imported were not fuel injection pumps but engine assemblies in which pumps and injections were in a condition of having been fitted to, or assembled with, engines and this Tribunal held that such imports did not merit consideration as re-imports of items exported, and accordingly denied the benefit of Notification 94/96. The ratio of the above judgment applies squarely to the facts of the present case and accordingly we are of the view that the assessee is not entitled for the benefit of Notification 94/96-Cus. Accordingly, the appeal is rejected.