in

Original

Dated

Period

Duty Demanded

E/1001/2012

23/2012/C 30.03.12

Apr 07 - Jan

11

Rs.17,26,89,200

E/85020/2013

61/2012/C 28.09.12

Feb 11- Sep

11

Rs. 3,87,91,376

E/88628/2013

8/2013/C 27.05.13

Oct 11 - Jun

12

Rs. 2,67,62,848

Total.

Rs. 23,82,43,424

1.2

By the impugned order following has been held:

Order No 23/2012/C dated 30.03.2012

“ORDER

a] I hereby order classification of the model "Arjun Ultra - 1 CE"

cleared by the Noticee during the period from April, 2007 to

January 2011 under Chapter Sub-heading No. 8429.51.00 of the

Schedule to the Central Excise Tariff Act, 1985.

b] I hereby confirm the demand of Central Excise duty of Rs.

17,26,89,200 /- (BED - Rs. 16,76,59,417/- + ED Cess

33,53,189/- + S&H ED.Cess 16,76,594/-) (Rupees Seventeen

Crores Twenty Six Lakh Eighty Nine Thousand and two Hundred

Only) on "Arjun Ultra - 1 CE" cleared by the Noticee during the

period from April, 2007 to January 2011, under the provisions of

Section 11A of the Central Excise Act, 1944.

c] I also order recovery of interest at appropriate rate, on the

amount of duty confirmed, under Section 11AB of the Central

Excise Act, 1944.

d] I also impose penalty of Rs. 17,26,89,200/- upon the Noticee

under the provisions of Section 11AC of the Central Excise Act,

1944.

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e] Since penalty under Section 11 AC of the Central Excise Act,

1944 has been imposed upon the Noticee, I refrain from

imposing penalty under Rule 25 of the Central Excise Rules,

2002.”

1.3

Other two orders are identically worded except for the

amounts hence not reproduced.

2.1

Appellant is engaged in the manufacture of various types

of tractors. Tractors are wholly exempt from payment of basic

excise duty vide Sr. No. 40 of the Notification No. 6/2006-CE

dated 1.3.2006, as amended.

2.2

Acting on intelligence that appellant are also engaged in

manufacture and clearance of tractor model having brand name

“Arjun Ultra 1-CE” along with other models manufactured and

cleared by them, investigations were initiated. In said model

certain

arrangements

were

made

during

the

course

of

manufacture itself to make it exclusively for use as loader. From

the marketing material and literature it transpired that this

model is marketed by them as “Construction Equipment” capable

of lifting or loading a payload of more than 1 MT. In this model

appellant were providing special grade axle so as to enable it to

carry the payload of more than 1 MT. Investigations were also

made with the end users.

2.3

On conclusion of investigations revenue authorities were of

the view that the instant machine i.e. Arjun Ultra-1 CE

manufactured by the appellant is specially designed by them to

form an integral part of a machine performing function such as

lifting, dozing or attaching any other required FEL and the

resultant goods appropriately merit classification under the

subheading 8429.51.00 as "Front End Shovel Loader.

2.4

The examination of end use of the said model Arjun Ultra-

1 CE manufactured by the appellant this view is supported as the

machine has an inherent feature for lifting more than 1 M.T. load

and serves as a material handling equipment rather than tractor.

It is also clear that the Noticee are Machine is capable of

handling or loading goods or materials rather than the vehicles

as laid down in chapter Note 2 to chapter 87 which defines

"Tractors" as vehicles constructed essentially for hauling or

pushing another vehicle, appliance or load. Appellant purchase

4

loading equipments (Front end loaders) from their vendors which

are manufactured as per the designs and specifications provided

to them. The Front End Loaders (FEL /FED) etc. are

manufactured under their quality control and bear their brand

name. Appellant impart training to dealer's personnel for the

attachment of FEL and also give necessary directions to them

regarding the maintenance of the equipments and also give

physical demonstrations to the customers as well as the staff

members of the dealer. The User Manuals for so-called tractors