TMI Blog2009 (12) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... een invoked in respect of these show cause notices.We also take note of the fact that penalty equal to duty demand has been imposed by the Commissioner under Rule 173Q of the Central Excise Rules, 1944 in respect of Nasik factory and penalty of Rs.31,37,57,745/- has been imposed on Kandivli factory. Therefore, we find that the penalty imposed in this case is not excessive taking into account the gravity of the omissions and commissions on the part of the company reasonable. In view of the above discussion, the appeal filed by the appellants is rejected. - E/2053/2005 - A/325/2009-WZB/C-II/(EB), - Dated:- 7-12-2009 - S/Shri B.S.V. Murthy, Member (T) and Ashok Jindal, Member (J) S/Shri Rohan Shah, Anil Wani M. Shah, Advocates, for the Appellant. Shri M.I. Sethna, Sr. Advocate, for the Respondent. [Order per: B.S.V. Murthy, Member (T)]. - The appellants are engaged in the business of manufacture of Motor Vehicles, having its automotive manufacturing facility at Kandivli (Mumbai) and Satpur (Nashik). 2. The present appeal is against the order-in-original No. 50 to 87/Commr (AH)/05, dated 30-3-2005 and received by the appellants on 4-4-2005. By the said order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise (Appeals) contending that the vehicle was classifiable under Heading 8703 and not under Heading 8702 as classified by the appellants and approved by the Assistant Collector. 6. The Collector (Appeals) by his order dated 23-6-1993 dismissed the Department's appeal and confirmed the classification by the Assistant Collector. The Collector (Appeals) also observed that the order dated 10-4-92 of the Collector of Central Excise dropping the demands of Rs.8.90 crores and approving the classification under Heading 8702 had become final and had been accepted by the department. 7. The department being aggrieved by the aforesaid order passed by the Collector (Appeals) filed an appeal before the CEGAT. The Tribunal dismissed the department's appeal by its order dated 20-9-2000. The department has not challenged this order before the Hon'ble Supreme Court. 8. In another proceeding, with respect to the same vehicle (viz. Commander 750 DP) the Collector of Central Excise, Mumbai-II issued a Show Cause Notice dated 23-12-1991 contending that the classification of the Commander vehicles under Heading 8702 was erroneous and sought to demand a duty amount of Rs. 8.90 crores by classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct duty that was required to be paid was @ 25% adv, as applicable to the Central Excise Tariff heading 8702.00. The premise on which this show cause notice proceeded was that the vehicle was in fact correctly classified by the appellants under 8702, but however, due to the mismatch in the wordings in the notification granting exemption (viz. 162/86) and the Central Excise Tariff, the benefit of the exemption would not be available. 14. The department issued show cause notice dated 27-4-1993 and the corrigenda dated 24-6-1993 for the period 1-4-1991 to 23-11-1992 calling upon the Kandivali facility of the appellants to show cause as to why:- (i)the vehicle namely Commander 750 DP should not be classified under 8703 of the SCETA 1985 and the chassis fitted with engine for the said vehicle should not be classified under heading 8706.30 of the SCETA. (ii)differential Central Excise duty on the model Mahindra Commander 750 DP totally amounting to Rs.52,62,75,110/- (Basic Rs.46,64,29,700/- and special Rs.5,98,45,410/-) short paid on the said vehicle valued at total Rs.1,16,61,03,000/- during the period 1-4-1991 to 23-11-1992 should not be recovered under proviso to sub sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner has wrongly relied upon the blue prints supplied by the appellants and the road worthiness certificate issued by ARAI, Pune, for assigning the seating the capacity of 10 persons to the said vehicle. (e) The said vehicle was wrongly categorized by the Transport Commissioner, Maharashtra as omnibus under non-transport category prior to 24-11-1992. (f) The said vehicle merits categorization as Jeep under transport category prior to 19-6-1992 and as omnibus under transport category during the period 19-6-1992 to 23-11-1992. (g) As the provisions of Rule 171, 79, 82 and 84 of Maharashtra Motor Vehicles Rules, 89, are applicable to transport vehicles, the seating capacity of the said vehicle is eight persons and seven persons for public service and private service vehicles respectively. (h) As the said vehicle was only an extended version of model MM 540 [seating capacity of six (5+1) persons], having a possible statutory seating capacity of only eight persons as transport vehicle it appears that the said vehicle is designed to transport eight persons only. (i) The said vehicle is designated to statutorily transport only eight persons and therefore, it merits cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected, on the ground that sufficient time was given initially and further Tribunal is required to pass orders within two months failing which reference has to be made to the Hon'ble President for extension of time to pronounce the order. However, the ld. Counsel for the Revenue made a request on health grounds and time was extended up to 24-11-2009 orally to file rejoinder. The same has been filed on 24-11-2009 and taken into account. 19. Following written submissions of the appellants are summarized in the following paragraphs from 20 to 33. 20. Issue of classification in controversy in this proceeding is squarely covered in favour of the appellants on the same issue, same vehicle and for the same period. 20.1 Approval of classification of Commander 750 DP (ST) had been challenged by the Department in previous proceedings initiated by the Department. The issue has been concluded in favour of the appellants and the classification of the Commander vehicles under 8702 of SCETA has been upheld by the order of this Tribunal reported in 2006 (197) E.L.T. 341 (Tribunal). Tribunal's order approving the classification under 8702 of SCETA ought to have been followed. While th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Commander 750DP-2WD/CR 802/Desk-II (4)/ON-11668 dated 19-8-91 cannot be relied upon for accepting the statutory seating capacity of the impugned vehicle. When the cases were taken up for adjudication, the office of the TC Maharashtra was asked by me to clarify certain issues with regard to the categorization of the vehicle as Omnibus in Non-Transport category and to elicit his comments on the fact it that it was mandatory for the TC to specify the category to which the vehicle belongs. However, from the reply of the office of the TC, I find that the said issues have not been clarified satisfactorily. (Emphasis added) 22. Various authorities dealing with the Motor Vehicles, viz. Automotive Research Association of India (ARAI) and the Transport Commissioners (TC) of various States have approved and repeatedly confirmed that the vehicle was indeed for carrying 10 persons. 23. Classification is to be determined based on description in heading of SCETA. 23.1 The classification of goods has to be determined only on the basis of the description in the Heading read with relevant section or chapter notes. Since notes are part of the tariff, they have statutory effect. 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious provisions of Motor Vehicles Act, 1988 and the Maharashtra Motor Vehicles Rules, 1989 to arrive at a conclusion that the vehicle was not a 10 seater. 26.2 Reference to the Motor Vehicles Act, 1988 for the purpose of determining the classification under Excise Tariff is misplaced and is contrary to law. The Central Excise Tariff does not prescribe any reference to Motor Vehicles Act or any State Motor Vehicle Rules to determine the classification of excisable goods. Entire foundation on the basis of which the Department seeks to demand differential duty is fallacious and contrary to the provisions of Excise Law. 27. The Motor Vehicles Act and Rules relied upon in the show cause notice/impugned order do not apply to these vehicles under non-transport category. 27.1 The Department is seeking to rely upon certain provisions in the MMVR in support of its contention that the vehicle does not meet with the seating size requirements. The rules relied upon by the Department are Rules 79, 82, 84 and 171. 27.2 It is submitted that for interpreting the provisions of the Central Excise Tariff (Central Statute) it is not permissible for the Department to rely upon the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the vehicles in question were approved for registration by the Transport Commissioner under a category that did not exist and therefore the vehicle ought to be registered as a Transport Vehicle. The factual position as evident from the documents annexed to the show cause notice itself is as under: The Transport Commissioner in his certificate has classified the vehicles as "Omnibus under Non-transport Category" This classification was based on the fact that all these terms-viz omnibus, non-transport etc. were defined in the Motor Vehicles Act and the Rules, at the time of certification which was prior to 18-6-1992. 29.2 Between the period from 22-5-1989 to 18-6-1992 there was no distinction or classification of vehicles as transport and non-transport. 29.3 Thereafter on 19-6-1992 the Notification was issued by which omnibus was shown under the transport category. 29.4 In view of the fact that the Transport Commissioners were classifying the vehicles of various manufacturers including that of the appellant as omnibus under Non-Transport Category, a reference was made by the Transport Commissioner to the Ministry of Surface Transport. This fact is evident from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g spaces. 39. We have considered the submissions made by both sides and gone through the records. 40. The issue involves classification of Commander range of vehicle manufactured by the appellants at Kandivali and Nashik. The department's contention is that the vehicle is required to be classified under 8703 of CETA, whereas the appellants claimed the classification under 8702 of CETA. The production of the vehicle commenced somewhere in July, 1991. At that time, the CETA Heading 8702 read as "public transport type passenger motor vehicle". The CETA Heading 8703 covered motor cars and other motor vehicles principally designed for the transport of persons (other than those Heading No. 8702) including station wagon and racing cars. Chapter Note No. 3 to Chapter 87 provided that for the purpose of Heading 8702, the expression 'public transport type passenger motor vehicle, means vehicles designed for the transport of 10 persons or more including the driver. Before we consider the rival arguments and the correctness of contentions of both sides, it will be appropriate to consider how an Assessing Officer would approach the classification when a classification list is filed as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r would call for the certificate issued by the organization recognized for this purpose viz., ARAI or VRDE and if the certificate certifies that the vehicle is designed for carrying 10 persons, he would accept the classification claimed by the manufacturer. He may also verify the certificate of registration issued by the concerned transport authorities, if he is satisfied with the certificate issued by the organization required to certify the vehicle before it is put on the road; naturally he would not have to proceed further. This requirement arises, because as explained earlier, there has to be a standard, based on which a vehicle can be said to have been designed for the transport of 10 persons or more. These standards would be either available in standard text book or scientific literature or with the organizations, which are entrusted to prepare standards or with the organization, who are required to decide such factors and sometimes standards are also prescribed in the relevant Acts framed for such purpose. In this case, the Motor Vehicles Act and Rules there under, lay down the standards. Even if the Motor Vehicle Act does not lay down the standards, the expert's opinion ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for the period June, 1991 to November, 1991. 16-6-1992 - Order dated 10-4-92 passed by the CCE, Mumbai-II accepted the contention of the company that the provisions of the MV Act were not relevant and could not be taken into consideration in deciding the CETH of the vehicle. CCE also accepted the position that the only criterion was whether or not the vehicle was designed for the transport of ten persons or more. 23-6-1993 - In respect of the appeal filed by the Department challenging the approval of the classification of Commander under CETH 8702, the CCE (Appeals) dismissed the Department's appeal inter alia holding that the order of the CCE dated 10-4-92 had become final and had been accepted by the Department. 20-9-2000 - Department being aggrieved by the aforesaid order passed by the CCE (Appeals) filed an appeal before the CEGAT and CEGAT dismissed the Department's appeal by its order dated 20-9-2000. The Department has not challenged that order before the Supreme Court. 1-3-1992 - That CL No. 1/92-93 with effect from 1-3-92 filed in respect of Commander vehicle with a carrying capacity of 10 persons was approved by the Assistant Collector on 26-6-1992; that the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Central Excise Tariff cannot be interpreted by reference to the Motor Vehicles Act. He also submitted that for determining the classification the Excise Department needs some guidance and can therefore, reach out to principles under the Motor Vehicles Act, since it is an act in pari materia. 45.2 The ld. Advocate for the appellants submitted that there is a long line of judgments including the appellant's own case that the Motor Vehicles Act and the Rules cannot be referred to or relied upon for determining the classification. He also submitted that this submission seeks to bring in the provisions of Motor Vehicle Act by back door for determining classification. He cited Para 4 of the judgment of this Tribunal dated 19-7-2005 [2006 (197) E.L.T. 341 (T)] in support of his contention, which is reproduced below:- "Inasmuch as there is no dispute that the vehicle under consideration is meant for transport of 10 persons or more, the same would get specifically covered by Heading 8702. Heading 8703, by its very language applies to vehicles which are not covered by 8702 and is residual entry in nature. The explanatory Notes to Harmonized System are to the effect that Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and capable of carrying 10 persons. According to them the word "design" was relevant only till 1-3-92 and not thereafter, in view of the change in the tariff Heading. The very same issue as to whether the revision in description under 8702 of the CETA Heading made any difference to the classification of vehicle had come up before the Tribunal in the case of Bajaj Tempo Ltd. v. CCE, Pune - 2001 (128) E.L.T. 402 (Tri.-Del.) and the Tribunal had observed as follows: The exemption under Notification 162/86 was for "Public transport type passenger motor vehicles". The Revenue Authorities had granted this exemption to appellant's motor vehicles, namely, Tempo Trax while approving the classification list. The impugned orders do not bring out any grounds for holding that the motor vehicle, Tempo Trax ceased to be "public transport type passenger vehicle" after 1-3-1992. No change had taken place in the motor vehicle to take it out of the category of "public transport type passenger vehicle" w.e.f 1-3-1992. The records do not give any reason or offer any explanation as to why the vehicle in question was to be treated as "public transport type passenger vehicle". As a result of the mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that the "design" ceases to be relevant after 1-3-92 cannot be accepted. We have also taken note of the fact that this aspect was not brought to the notice of the Tribunal when the order dated 19-7-2005 was passed. In fact, the Tribunal had taken note of the tariff heading description as it existed after 1-3-92 only. Further, the Tribunal also took note of the fact that the explanatory note covers motor vehicles designed for transport of 10 persons or more without making any distinction about the use of the same as public transport vehicle or other. But it has to be noted that the explanatory note to HSN also provided that Heading 8702 covers of Motor vehicles designed for the transport of 10 persons or more. Therefore, the word "design" was very much in existence. In view of the decision of the Tribunal cited above and in view of HSN explanatory notes, we have to and shall proceed on the basis that the change of description of the Tariff heading did not make any distinction/difference to the issue of classification. 46.3 It is not for classification of the vehicle that one is required to look into the Motor Vehicles Act or Rules thereunder. It is to see whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from 11-4-91. Technical specifications were enclosed. Neither in the technical specification nor in the certificate there is any mention about the seating capacity of the vehicle. The only mention of seating capacity is available in the first paragraph of the certificate wherein it says "based on the trials conducted on the prototype of the basic model Mahindra Commander 750/2WD (10 seater) manufactured by Mahindra Mahindra Ltd." 46.6 Shri Z.A. Mujawar, Dy. Director, ARAI, in his statement had clearly stated as follows:- "I would like to state that the vehicle length, width and height are measured by the measuring tape and recorded, curb weight and gross vehicle weight are measured on weigh bridge and cross checked with the technical specification given by the manufacturer, the load carrying capacity is computed from difference between gross vehicle weight and curb weight and the riding capacity checked visually for adequacy of seating. No physical measurements of the seat dimensions are conducted as it is not required as per the Central Motor Vehicle Rules, 1989. However, for satisfying ourselves on seating capacity claimed by the manufacturer, we load the vehicle w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gth of the seat as per law was 15". What happened subsequently is interesting. As per the vendor's request, the appellants sent a body shell of the Commander vehicle and based on the rough guidelines given by the appellants and the body shell of Commander vehicle, the vendor developed the seats. After the seats were developed since the vendor could not give drawing for inspection purpose, the R D section of Mahindra Mahindra then got one set of seat without cover and cushion, through material control department and prepared the drawing for seat and backrest carcass in September, 1991. Apparently, the drawings prepared by the company and forwarded, after development were found unsuitable since the vehicle could not accommodate 10 persons if manufacture of the seat was as per the original design. This shows that irrespective of the contentions of the appellants that they had designed a vehicle, which was a 10 seater, what comes out from this results of investigation is that the appellants found that the design of the vehicle manufactured by them was not suitable for transporting 10 persons as per law even though they had intended to manufacture a vehicle with capacity of 10 seats i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts as reflected in para 33.7 of the order-in-original show that the appellants themselves found design of the vehicle and the seats were not as per standards, which they had set out to produce and when appellants themselves failed to produce vehicle with seating capacity of 10 persons, the claim that the Assessing Officer should have accepted that the vehicle is designed for 10 persons is not correct. Since all the decisions in favour of the appellants were rendered on the ground that Motor Vehicles Act and Rules cannot be applied without examining all these aspects, we have to and we can differentiate our present conclusion with the earlier decisions rendered in the case of the appellants themselves. While it has to be accepted that just because a vehicle is required to be classified in a particular category under Motor Vehicles Act, on that basis the classification under Central Excise tariff has to be decided is not acceptable, to decide whether a particular vehicle has been designed and fulfils the description of the tariff description, aid and assistance of the standards prescribed by the Government and statutory requirements have to be taken into consideration. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting capacity of the vehicle. What he has said is that the claim of the noticee is therefore not supported by any independent verifiable evidence as regards the seating capacity, whereas the department had clearly shown that the vehicle manufactured by the appellants did not have the seating capacity. 46.11 Further, we also have gone through the records and found that while considering the stay application of the appellants against the impugned order, the Tribunal in the order dated 30-11-2005 also took note of the fact that in the earlier adjudication the only ground taken was that the appellants had claimed the vehicle to be a public transport type passenger motor vehicle and the department had contended that the same was not used for public transport and in that case the department's appeal was dismissed on the ground that additional ground cannot be taken in the appeal. 46.12 Further, the Tribunal had observed that prima facie they were of the view that since the chapter notes and the Tariff entry referred to vehicles "design" for the transport of 10 persons or more, there was nothing wrong in departmental authority taking recourse to t the Maharashtra Motor Vehicle Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.) held that the change in approved classification permissible. Similar view was taken in the case of Pefco Foundry Chemicals Ltd. v. Collector of Central Excise - 1992 (58) E.L.T. 565 (S.C.). 46.16 The detailed discussion above shows that the decision of the Tribunal was based on a limited ground viz., the department had relied upon the MV Act to approve the classification list and there was no dispute about the seating capacity of the vehicle. We have found that both these observations which were confirmed the basis of the decision and also the paragraphs which were reproduced by the Tribunal in the department's appeal did not reflect the correct facts, which should have been considered. We have already reproduced the paragraph in the department's appeal which showed that the department was contesting seating capacity of the vehicle and there was also an observation that the department cannot ignore the provisions of MV Act and Rules while deciding the seating capacity of the vehicle. We are very conscious of the fact that the decisions of the Tribunal are rendered on the basis of the facts presented and the arguments advanced and quite often if one of the parties do not rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant rules under MMVR. Section 111(2)(a) of the MM Act, 1988 delegated the authority to the State Governments for regulating vehicles in the State including the seating capacity. Further, Rule 127 under MMVR unless the vehicles are in conformity with the provisions for design, construction and maintenance of Motor vehicle as pet the MV Act, 1988, the same cannot be sold in the country. "Rules 79, 80 81 of MMVR reproduced Rule 79. - Carriage of goods on stage carriages. - (1) Subject to the provisions of sub-rule (2) of this rule and of Rule 81, luggage may be carried on the roof of a stage carriage or in boot, locker or compartment set aside for the purpose, but where it is so carried on a roof, adequate protection in the form of a guard rail shall be provided. (2) No luggage shall be carried in any stage carriage in such a way as to block any entrance or exit; (3) No goods shall be carried on the top deck of a double decked stage carriage. (4) Where the holder of a stage carriage permit uses a vehicle authorities by the permit for the carriage of goods to the detriment of the public convenience by falling thereby to meet the demand for passenger transport, the Region ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt definitions as per MV Act are given below:- Section 2(33) "private service vehicle" means a motor vehicle constructed or adapted to carry more than six persons excluding the driver and ordinarily sued by or on behalf of the owner of such vehicle for the purpose of carrying persons for, or in connection with, his trade or business otherwise then for hire or reward but does not include a motor vehicle used for public purposes; Section 2(35) "public service vehicle" means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a maxi cab, motor cab, contract carriage and stage carriage. Section 2(47) "transport vehicle" means a public service vehicle, a goods carriage, an educational institution bus or private service vehicle. The reproduction of relevant definitions clearly shows that transport type vehicle designed to carry 10 persons has to fulfil the requirements of "public service vehicle" as defined under MV Act. If it is not transport type, it would not be classifiable under CETH 87.02 at all. 48.4 Section 41 of the MV Act, 1988 provides that registration of any vehicle depends upon the parameters laid down by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed through the Material Control Department and drawings were prepared (page 212/Vol. I). That the dimension of side seat carcass, part No. 0070995, was having length 28.50" and width 13" (page 213/Vol. I). That 28.50" is equivalent to 724 mm (28.50" x 2.54 = 723.0 mm). That the total length of finished seat along with cushion and cover was 730 mm (724 mm + 6 mm). That the length available per person was only 365 mm (730 mm/2 = 365 mm). That the side seat carcass of length 724 mm was used for fitting in the impugned vehicle and the seats which they were presently receiving conformed to the same length and width. That the side seat No. 0070995 having length of 724 mm and 6 mm of cover and cushion, thereby providing a seating space of 365 mm per person, was not in conformity with the minimum seating space per person of 375 mm prescribed under the Punjab Motor Vehicle Rules. We find ourselves on agreement with the Revenue and find that this submission of the appellant is not based on facts, law and records. 48.6 Another submission, which we found to be not based on facts on record was that "between the period 22-5-89 to 18-6-92, there was no categorization of vehicles as transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between back of the front seat and the front of the rear seat must be at least 660 mm. The top of the back rest of all seats should be 406 mm above the seat level. Shri Sanjay Joshi has explained what was done after he received note from the marketing department. Based on the note and drawings for the seats were prepared and forwarded by the R D unit and thereafter the vendor was called to develop the seat as per the drawings. However, the vendor did not follow the design. Instead proposed that he himself would develop the seat on his own design for fitting in the vehicle as per the rough guidelines shown and told to him. Thereafter a body shell of the Commander vehicle was sent to him. In the meantime based on the rough guidelines, the R D unit prepared a seat layout drawing - 071001 and handed over to the vendor. The vendor did not follow the drawings and developed his own seats, which were tried out and an order was placed on him for supply. Thereafter when the vendor expressed his inability to provide drawings for the seats manufactured by him, the R D Unit obtained one set of seats without covers and cushion and prepared the drawings in September 1991. Thereafter the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed above shows that while the appellants proceeded and intended to manufacture a vehicle seating capacity of 10 persons so that they can avail the benefit of the lower rate of duty available under CETH 8702. when they found that they fell short of specifications, they obtained a certificate in a category, which did not require any verifications of seating capacity by the statutory authorities like the Transport Commissioner. It has been contended on behalf of the appellants that the Commissioner was wrong in taking a stand that the Transport Commissioner did not act as per the law and he had no power to sit in appeal over the decision of the Transport Commissioner. We fully agree with the contention of the appellants. While this could be a mistake on the part of the Commissioner in the impugned order, he has not made any mistake as regards the determination of seating capacity. The very fact that the internal note sent to the design department in June, 91 and note sent by marketing department in January, 91 show that the appellants were also aware that there was a statutory minimum requirement of seating capacity. Otherwise, there would not have been an indication of minimum le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it is to be made under 8702, it has to be a transport type vehicle. Obviously the seating capacity has to be determined on that basis. As rightly pointed out by the appellants, the purpose of MV Act and Rules is entirely different and the purpose of classification under Central Excise Tariff Act is entirely different. Therefore, even if ARAI and Transport Commissioner get satisfied by checking up whether 10 persons can be seated in the vehicle or not for checking the roadworthiness, the Central Excise Officer for classification purpose has to check whether the vehicle fits into description given in the tariff. The tariff as it existed prior to 1-3-92 classified public transport type passenger motor vehicle under Heading 8702. The vehicle has to be of this type and it has to fulfil the requirements of this type of vehicle if the same is to be classified under this heading when read with chapter note. The vehicle manufactured by the appellants is admittedly not the transport type since motor vehicle authorities have classified at as a non-transport vehicle and it does not have the seating capacity in view of the fact that it does not fulfil the requirements of specifications to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants relied upon following decisions: (a)Leisureland Pvt. Ltd. v. CCE, Calcutta - 1994 (71) E.L.T. 489 (T) (b)Bolani Ores - AIR 1975 SC 17 (c)MSCO - 1985 (19) E.L.T. 15 (S.C.) = AIR 1985 SC 76 (d)Tata Tea Ltd. - 2002 (142) E.L.T. 3 (S.C.) = 2002 (50) RLT 126 (SC) (e)Brooke Bond India Ltd. v. UOI Others - 1984 (15) E.L.T. 32 (A.P.) (f)Premier Automobiles v. CCE, Mumbai - 2007 (209) E.L.T. 439 (T). We found following decisions which found the same permissible and we have reproduced the relevant paragraphs below: (a) Scooter India Ltd., 2003 (156) E.L.T. 535 (Tri.-Del - Para 10) - The Commissioner has relied on the warranty booklet and also the letter dated 8-10-99 addressed to ARAI for coming to the conclusion that the auto-rickshaw and the chassis manufactured by the assessee are designed to carry more than six passengers excluding the driver. We are not able to agree with the view taken by the Commissioner. It may be that the assessee desired to manufacture a chassis for vehicle with passenger capacity of more than seven passengers including the driver. But, its application was not approved by ARAI since it was found that the design of the vehicle is not adequa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed principle of Interpretation that courts in construing a statute or notification will give much weight to the interpretation put up on it at the time of enactment or issue, and since by those who have to construe, execute and apply the said enactments. 12. How then should the courts proceed? The expressions in the Schedule and in the notification for exemption should be understood by the language employed therein bearing in mind the context in which the expressions occur. The words used in the provision, imposing taxes or granting exemption should be understood in the same way in which these are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them. It is, however, necessary to bear in mind certain principles. The notification in this case was issued under Rule 8 of the Central Excise Rules and should be read along with the Act. The notification must be read as a whole in the context of the other relevant provisions. When a notification is issued in accordance with power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is, as if it were contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to be conveyed by the use of the words under the circumstances". The decision is not relevant in view of the fact that in this case the tariff heading, explanatory note and the Chapter note do not provide a procedure or method. 48.15 Another point which was argued by the ld. Counsel for the Revenue with which we concur is that when the law is pari materia, the same would be applicable. In this case, the terminology used viz., public transport type vehicle finds place in the MV Act also. When we consider the relevant provisions of MV Act this become clear. According to Section 2(47) "transport vehicle" means a public service vehicle, a goods carriage an educational institution bus or a private service vehicle or a "private service vehicle". "Public service vehicle" according to Section 2(35) of MV Act means any motor vehicle used for carriage of passengers for hire or reward, and includes a maxi cab, a motor cab, contract carriage and stage carriage. In this the tariff heading reads public transport vehicle. Therefore, for the purpose of determining public transport vehicle, there is nothing wrong in going to MV Act. Since that is the only place where public transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not required to verify the claim. (b) Department has established that vehicle cannot be considered as ten seater. (c) Common parlance test is not relevant in view of detailed discussion about categories such as transport, non-transport, provisions of MV Act and Rules. (d) There is no dispute that vehicle has to be classified as per the CETH. But this can be done only after coming to the conclusion as to whether vehicle is designed for/for transport of ten persons. The vehicle has failed this test. (e) Ld. Counsel for Revenue also agreed that MV Act cannot be relied upon for classification. This has been elaborated in our discussion and hence the fact that MV Act cannot be applied does not help the appellant. (f) We agree with the appellant that the Commissioner cannot challenge the certificates. In fact the request of appellant is to decide classification on the basis of certificates. We find that certificates of ARAI and Transport Commissioner do not help the appellants at all. (g) We also find that MV Act and Rules are relevant and can be taken recourse to. 49. The next question to be addressed is the contention of the appellants that the findings of suppressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal had come to the conclusion based on the facts and law as presented before them. In the absence of detailed investigation which had been conducted subsequently, none of the authorities including the Tribunal had dealt with the classification procedure on the assumption that the provisions of MV Act cannot be applied and the vehicle had the seating capacity. Whether the seating capacity was determined properly or not has come out only after the detailed investigation conducted by the department. 49.4 The appellants have submitted that there was no misdeclaration at all since they had not suppressed or misdeclared any facts; all documents required to be filed under Excise law were filed; the vehicle on the MV Act was available at all times; for invoking extended period, misdeclaration to other department is irrelevant; the department could have raised all these issues when the first classification list was filed; all the information including the statutory requirement of seating space with permissible limits for luggage were available to the department; entire activity of manufacture was done with the full knowledge of excise department. The Commissioner has elaborately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarity) submitted to the Transport Commissioner had a note stating that "specifications are subject to change without any notice". Such papers cannot be filed with statutory authorities. This shows very clearly that when the classification list was filed and when certificates were obtained, the appellant could not have claimed that the vehicle is designed for transportation of 10 persons. During the 1991-92, the tariff description under 8702 meant vehicle designed for the transport of 10 persons or more including the driver. We have already discussed the meaning of public transport type vehicle in terms of the MV Act and Rules and the requirement for having seating capacity as per the law. Such seating capacity can be proved only by the means of complete designs and drawings which is what a professional motor vehicle manufacturer would do and which is what the appellants also set out to do and unfortunately by the time they found that the seat manufactured as per the specifications under MV Act and MMVR could not be fitted into the vehicle manufactured by them apparently they intended to get the vehicle some how cleared without foregoing the lower rate of Central Excise duty. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written submission under the head computation, appellants submitted as under:- "Without prejudice to the above, and in any event assuming (without admitting) merely for the sake of argument that the Commander was a "Transport Vehicle" and hence should meet the parameters of MMVR, it is submitted that there was no categorization of Omnibus under Transport or non-transport under the Motor Vehicles Act till 18-6-92. For the first time, Omnibus was categorized under Omnibus under "Transport category" on 19-6-92 (refer to page 190 - Vol. I). The same was also brought under "non-transport" category on 24-11-92. Thus, even assuming that the parameters specified in MMVR could be applied to these vehicles (as they were to be considered as "Transport vehicles"), the demands would be restricted to the period 19-6-92 to 23-11-92). We find this to be another wrong submission on the part of appellants. The MV Act, 1988 defines light motor vehicle as - "light motor vehicle" means a transport vehicle or omnibus the gross vehicle weight of either of which or a motor car or tractor or road roller the unladen weight of any of which, does not exceed 7,500 Kgs." Omnibus is defined as - "omnibus" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is but we find that the even before us a written submission was made. Not only this was a wrong submission but the appellants also made two more wrong submissions before us, which have been discussed earlier. 51. It is to be noted that the appellants have stated wrong facts and have not submitted all the facts correctly not only before this Tribunal or before the lower authorities. As pointed out by the ld. Advocate for the Revenue they had done this before the Hon'ble Bombay High Court also. The Hon'ble High Court in their order observed "as far as suppression of facts are concerned, even before us the relevant blue prints, design sheets, etc. with regard to the actual size of seats and the manner of placing them in the vehicles were not produced. Therefore, we cannot fault the respondents in their contention of suppression of facts". These observations cannot be taken lightly in view of the fact that the main ground the Revenue had taken in that case was that when the show cause notice was pending, the High Court was not supposed to interfere or entertain writ petition and in support of this contention several Supreme Court's decisions were cited. But the Hon'ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or this Tribunal is not concerned with the declaration made before Transport Commissioner, we are not considering the relevant cases cited by the appellants. Both the ARAI and Transport Commissioner had never stated that the seating capacity was as per the requirements of the seating capacity for transport type vehicle. 56. Another submission made was that the show cause notice does not set out what fact was suppressed or misdeclared to the Excise department. We find that all the facts have been set out and all the relied upon documents have been provided. The conclusions have to be drawn based on the analysis of facts and circumstances and the adjudicating order cannot go beyond the facts and details set out in the show cause notice. The only objection the appellants had taken was that the Commissioner's correspondence with the Transport Commissioner was not provided to them. Since the Commissioner has not relied upon the Transport Commissioner's certificate, this becomes irrelevant. Therefore, we do not find in substance in the submission and we also find that the decisions cited by them are not relevant. 57. In view of the above discussion, we uphold the Commissioner's ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
