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2018 (10) TMI 1871 - AAR - GSTLevy of Compensation Cess - three cars, S-Cross, Ertiga and Ciaz (collectively referred to as HEVs) - Sl. No. 48 of N/N. 01/2017-Compensation Cess (Rate) dated 28.06.2017 as amended by N/N. 05/2017-Compensation Cess (Rate) dated 11.09.2017 - whether the car models for which advance ruling has been sought by the applicant are “with both compression-ignition internal combustion piston engine (diesel or semi-diesel) and electric motor as motors for propulsion”? - HELD THAT:- As per the instant application, this requirement stands fulfilled in all the models of the cars in respect of which the instant advance has been sought The other requirement is that of electric motor and the phrase “motors for propulsion” clearly means that both motors. should be capable of propulsion. Thus, in unambiguous terms the words used “motors for propulsion” makes it mandatory for the electric motor also to be capable or propelling the vehicle on its own. “Motors for propulsion” means that both motors should be capable of propelling the vehicle. As per advance ruling application, this is a case of “Mild hybrids”,- also called micro hybrids-use a battery and electric motor to help power the vehicle and can allow the engine to shut off when the vehicle stops (such as at traffic lights or in stop-and-go traffic), further improving fuel economy, Mild hybrid systems cannot power the vehicle using electricity alone - Further, the application also says that HEVs manufactured and supplied by the Applicant have a compact electric motor (Ciaz, Ertiga and S-Cross have electric motor of 1.779 kW, 1.779 kW and 1.772 kW capacity, respectively); that this compact motor in such HEVs provides assistance to the IC engine for propelling the vehicle and in other instances such as start-stop etc. These HEVs supplied by the Applicant draws energy from the consumable fuel as well as electrical energy; that in such HEV's the degree of hybridization is to the extent that electric motor provides assistance to the IC engine; that the electric motor assists the IC engine mainly when driver demands acceleration (press accelerator pedal above certain threshold); that therefore, such HEVs are mild hybrid vehicles. We have carefully gone through these certificates which certify the vehicles complying with the requirements of the Central Motor Vehicle Rules, 1989. However, from none of the contents of these certificates It is clear that the electric motor present in the vehicle is capable of “motor for propulsion”. Propulsion means to push forward or drive an object forward. A propulsion system consists of a source of mechanical power, and a propulsar (means of converting this power into propulsive force). The certificates relied upon by the applicant do not make it clear whether the electric motor present in these vehicles is capable of propelling the vehicle and under these circumstances, they cannot be relied upon to decide the eligibility of impugned vehicles for the purpose of any notification issued under GST law. Thus, electric motor in the cars for which advance ruling, is being sought in the instant case, is not capable of propelling the vehicle. Accordingly, the impugned vehicles failed to fulfill the main condition enshrined in the Serial number 48(d) of Notification No. 1/2017-Compensation Cess (Rate) dt.28.06.17, as amended, that vehicles should have both compression-ignition internal combustion piston engine (diesel or semi-diesel) and electric motor as motors for propulsion.
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