One Bench decides based on a precedent, the other disagrees & refers the matter to the Larger Bench
IN the case of JCB India Ltd. - 2014-TIOL-09-CESTAT-MUM the CESTAT, WZB, Mumbai had held thus -
CE - Word 'Automobile' is not defined in the CEA or CETA - Loader, Backhoe loader & Road Rollers are Automobiles as they are required to be registered with Road Transport authorities under Rule 2 of the Central Motor Vehicles Rules, 1989 & also certificates are required to be taken from Automotive Research Association of India, Pune and also satisfy Section 2 of the Air (Prevention and Control of Pollution) Act, 1981 - Parts, components and assemblies of Loader, Backhoe Loader and Road Rollers are covered by "parts, components and assemblies of Automobiles" mentioned in Third Schedule - purchase of various parts of Loaders, Backhoe Loaders, Road Rollers from different suppliers in India and abroad & repacking these parts with new packing material and affixing Logo, fixing of MRP and selling under own brand name amounts to manufacture in view of provisions of s. 2(f)(iii) of CEA, 1944 - being notified goods they are subject to valuation in terms of section 4A of CEA, 1944.
This decision was relied upon by the Tribunal while deciding the case of Larsen & Toubro - 2014-TIOL-2561-CESTAT-MUM.
It was held -
CE - Parts of scania trucks, dumpers, motor graders, wheel loaders, dozers and hydraulic excavators on which tag is put are subject to assessment u/s 4A of CEA, 1944 as they are covered by the broad definition of automobile - Even putting a tag, whether on individual or group of automobile parts, would amount to labelling the goods & will amount to manufacture covered u/s 2(f)(iii) of CEA, 1944.
In a recent case, the Mumbai Bench of CESTAT followed the decision in Larsen & Toubro and while upholding the demand for the extended period of limitation extended the benefit of cum-duty price and CENVAT and remanded the matter for re-working out the duty liability and consequent penalty, interest.
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However, the Division Bench of CESTAT, Chandigarh was not at all impressed with the decision in JCB India Ltd. case (supra). Expressing its disagreement with that decision, the Bench has opined that it would be in the interest of justice to refer the following issues to the Larger Bench for consideration:
(i) How to define expression 'automobiles' when it is not defined in Central Excise Act/Rules or any Notification issued thereunder. Can the expression given in the Acts, namely, Air (Prevention and Control of Pollution) Act, 1981 or Motor Vehicles Act, 1988 be adopted or the meaning of the expression 'automobiles' can be assigned from the uniformally defined in the various dictionaries and known in common parlance? and
(ii) The Notification No.11/2011 dated 24.03.2011 giving the effect of demand of duty w.e.f. 29.04.2010 on the parts, components and assemblies of goods falling under Tariff Item No. 8426 41 00, headings 8417, 8429 and sub heading 8430.10 is clarificatory and applicable prior to 29.04.2010 or mandatory and applicable from 29.04.2010 onwards.
The matter has been referred to the President for a say in the matter. See