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2023 (7) TMI 446 - AT - CustomsClassification of imported goods - import of vehicles including All Terrain Vehicles [ATVs] from its parent company - Rejection of the declared classifications of ATVs in the Bills of Entry filed and reclassifying the same under CTH 8703 - Confiscation of goods - Demand and recovery of differential customs duty - recovery of interest alongwith penalty - HELD THAT:- Brutus and Ranger Vehicles (electric) classified by the appellant under CTH 8709 are classifiable under CTH 8709 as works trucks and the same is evident from a perusal of their characteristics and features. The Vehicles do not have the features that a vehicle for transportation of persons is required to have as per the HSN Explanatory Notes - the appellant has correctly classified Ranger Vehicles (non electric) under CTH 8704, and Brutus and Ranger Vehicles (electric) under CTH 8709. Even otherwise, it is a settled principal of law that if the department wishes to change the classification proposed by an assessee then it is for the department to discharge the burden and prove that the Vehicles fall under CTH 8703, which includes within its scope motor cars and other motor vehicles principally designed for transport of persons. The department has merely relied upon the website of Polaris USA to conclude that the classification adopted by Polaris India is not correct. It was imperative for the department to have established that the Vehicles are primarily designed for transport of persons. Only when the department discharges the burden of proof, that the burden of proof would shift to the assessee. For a vehicle to be classified under CTH 8703, it is required to be ‘principally designed’ for transportation of persons. The Vehicles in dispute, namely, the Ranger (non-electric) and the Ranger (electric) and Brutus Vehicles are not designed principally for transportation of persons. It would, therefore be necessary to determine what would constitute ‘principally designed for transportation of persons’ In COMMISSIONER OF CENTRAL EXCISE, PUNE-I VERSUS TELCO LTD. [2002 (2) TMI 717 - CEGAT, MUMBAI] the Tribunal observed any intended/isolated advertised use by the manufacturer, does not induce us to conclude that the entity under dispute, are ‘principally designed for transport of person’. Thus, it is the gross weight usage that determines whether the vehicle is principally designed for transportation of persons. This apart, the Ranger and Brutus Vehicles imported by the appellant over the years have been sold to the TN Coastal Security, NIM/UK-SDRF- Disaster Relief Forces, Border Security Surveillance and Utility Support, primarily for the purpose of transportation of goods and utility purposes. Therefore, applying the usage/functionality test, which can be applied in the instant case as CTH 8703 uses the words ‘principally designed for transportation of passengers’ which implies reading of an ‘end use’ stipulation in the Tariff as held in Telco, it is clear that the said Vehicles are not vehicles designed for transportation of passengers. Thus, even if passengers are transported in the Vehicles, it would not mean that the Vehicles cannot be classified under CTH 8704 and CTH 8709 - it would not be appropriate to refer to the website of Polaris USA. The information conveyed therein may not mention the Vehicles are for transportation of goods, but that would not conclusively prove that the Vehicles are not for transportation of goods. Thus, it has to be held that the Ranger (non-electric) Vehicles deserve to be classified under CTH 8704 and Ranger (electric) and Brutus Vehicles deserve to be classified under CTH 8709 - Appeal allowed.
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