TMI Blog2002 (2) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the same to be cleared accordingly. (b) The appellants had classified Tata Mobile 207 Model Crew Cab with load body, as goods transport vehicle under Heading 8704. They were issued a notice for classifying the same under Heading 8703 as the vehicle was considered to be principally designed and meant for transport of passengers, not more than six persons . Duty demands thereafter were made on account of differential of duty payable under Heading 8703 and duty paid under Heading 8704. (c) The Revenue has filed this appeal seeking confirmation of duty for the period March, 96 to January, 98, After holding the subject model vehicle to be a vehicle, principally designed and meant for transport of not more than six persons to be classified under Heading 8703. The department has supported the case of classification under Heading 8703 in the hearing before us on the following grounds - (i) The conclusion that the vehicle is hybrid vehicle and there was no provisions of classification for such vehicles is erroneous. The Commissioner erred and failed to apply the provisions of CETA, 1985. The said vehicle is not hybrid and after coming to a finding that the vehicle was des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle has Cargo carrying capacity of 532 Kgs. whereas capacity to carry person is only 408 Kgs. Therefore holding that it is not a vehicle primarily designed, not for carrying person and would be appropriate to be classified as a multi-utility or hybrid vehicle and classifying it as vehicle for transport of goods under Heading 8704 is not correct. (vii) The Tariff has taken due care to differentiate vehicles principally designed for transport of persons falling under Heading 8703 from those used for transport of goods falling under Heading 8704. Heading 8704 is general description while in Heading 8703. It stressed that the vehicle be designed for carrying persons. It should take precedence over its use for transport of Cargo/Baggage. Such use, as in this case, is incidental into the design of the vehicle for carrying persons. (viii) The Commissioner should have considered the various headings under Chapter 87 for the categorization of vehicle. Page 1427 of the HSN clarifies the expression station wagons means vehicles with a maximum seating capacity of nine persons. The interior of which may be used without structural alteration for transport of both goods and persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti-role bars have been provided with 5 speed gear box with over drive engine and with assurance of Tata s name, visit nearest TELCO dealer - Bring double cab, no wonder your family members would like it. The Commissioner has failed to apply the ratio of the following decisions - (i) 1986 (26) E.L.T. 620 (T) (ii) 1985 (21) E.L.T. 110 (T) (iii) 1986 (23) E.L.T. 343 (High Court, Mumbai) (x) The Commissioner erred in holding that since the department themselves approved classification list of the vehicle or obtained declaration in respect of the said vehicle on three different occasions in the past, and hence there was no wilful suppression of facts on the part of the manufacturers and therefore the show cause notice issued is not sustainable either on merits or on legal grounds. The assessee has first time declared to the Excise department about their manufacturing activity of the subject vehicle vide their classification declaration e.g. 26-3-96 at S. No. 783 under Rule 173B of the Central Excise Rules. Their classification declaration w.e.f. 23-7-96 was filed due to change in rate of duty from 10% to 15% adv. on subject vehicle being the budgetary charge, for T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said vehicle, they should have been granted opportunity to place materials and evidence to controvert and show the actual use to be pre-dominantly for transport of goods. The end use of the vehicles as the crucial test applied by the Commissioner (Appeals) was beyond the show cause notice and the Commissioner (Appeals) had to remand the matter to enable the facts relating to end use to be ascertained. (ii) The classification of the vehicle had to be determined on the basis of the design, not on what use the vehicles are put. The end use arrived at by the Commissioner (Appeals) himself was not accepted to be proof of evidence as it appears from his orders as below - Though the learned Commissioner classified the product manufactured by M/s. TELCO as vehicle for carriage of goods, no enquiries or discussion appear to have been made with reference to the usage of the vehicle i.e. how the customer uses the vehicle whether for carrying the passengers without actually putting the vehicle for commercial use for carrying the goods. Nor it was established that the vehicles are exclusively used only for transporting the goods irrespective of the increased seating capacity. (Para 8). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to appreciate that the terms Heading 8704 would impugned vehicles suitable for or appropriate for transportation of goods and it did not rule out that the use for carriage of some persons and the fact is that if not all goods vehicles which have ability to carry passengers. (vi) The certificate issued by the Motor Vehicle Regulatory Authority to classify the vehicles cannot be relevant for the purpose of CETA, 1985 classification. The ARAI certificate, similarly, has no role to play for the classification of the vehicles and a reference in this certificate to LCV support the classification of the appellant s vehicle. (vii) The reliance on the Explanatory Notes to HSN by the Commissioner (Appeals) relates to the design of station wagons while design of the subject vehicle is totally different from the design of station wagons and it appears the case of the appellants and it is not support the department s case. The analogy of comparing the vehicle with station wagons is erroneous. (viii) Headings 8703 and 8704 of CETA, 1985 are not identical with corresponding headings of HSN and both contain significant differences. Therefore, the reliance of Explanatory Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in this case, the material now been placed by miscellaneous applications should be considered to determine the classification, which is the core dispute before us. Thus material relevant to determine the same can be taken on record. We find that these application rely upon certain letters, we had instructed the Department to complete this correspondence, so that such letters could be appreciated in their entity. As regards the statements, the same shall be considered for what they purported to convey. (b) Before proceeding to determine the classification of any product, it is essential that identification of the entity which are proposed to be classified is first arrived at. This identification process is to be distinguished from the next step which follows, viz, the enquiry whether one or more Tariff provision applied to the entity which has been so identified. It is not the provision of the Tariff, which determine the relevant entity of the goods. They only determine whether the identified entity will attract duty thereunder. The appropriate heading or sub-heading is to be found after the goods are identified. The Rule 1 of the Statutory Rule of Interpretation in CETA, 1985 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arated from the passenger area by a removable partition (metal plate in the lower part and grill in the upper part). A panel of plywood is placed on the floor to provide a flat floor in the cargo area and the rear part of the passenger area (dual purpose area). The panel has openings for mounting the bench on anchor points in the passenger area (dual purpose area). There is no anchor point in the cargo area. The total load capacity (cargo and persons, excluding the driver) is 945 Kg. The vehicle has a well finished interior (e.g., upholstered seats or benches with headrests and decorative wall panels). 8704.31 1. Two-wheel-driven motor vehicle , with a spark ignition internal combustion piston engine of a cylinder capacity of 2,254 cc. The vehicle has four doors, two seats in the front and a non-collapsible bench for three persons in the passenger area (so-called double cab). The superstructure of the vehicle consists of two separate bodies, one for the driver and passenger area, and one for the cargo area. The cargo area is open and has a drop-down tailgate to facilitate the loading or unloading of cargo. The total load capacity (persons, including the driver, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lmost similar logic has been used by them in M/s. Mahindra Mahindra case which is - ......(a) The World Customs Organisation has not yet been recognised by the Government of India and referential respect given by the Authorities in India to HSN was not confirmed upon this organisation. Therefore, the contents of June, 2000 World Customs Organisation carries no weight so far as the interpretation of the Excise Tariff in India is concerned. (b) As against that the department had referred to and relied upon the re-introduction of the entry station wagon in the Finance Bill of 2000. In the context of the department s submissions that the impugned vehicle could appropriately he classified as passenger vehicle falling within the ambit of station wagon, inter alia briefly, the following points were made. (i) The entry station wagon existed under Chapter 8703 as passenger vehicle applicable to the impugned vehicle until the year 1995-96. The same was deleted only with effect from 23-7-1996. This means that the entry did not exist only during the period of dispute in this case. Prior, thereto and immediately thereafter station wagon as a passenger vehicle was a part of the Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Co. Ltd. [1997 (93) E.L.T. 548 (Tribunal)], the Tribunal has held that opinion given by World Customs Organisation in regard to classification of goods having great persuasive value, considering the purpose of its setting up and expertise it represents . In the case of Netlon India Ltd. [2000 (121) E.L.T. 675 (Tribunal)], it was held that Central Excise Tariff being structured on HSN, opinion and recommendation of the Harmonised System Committee cannot be brushed aside (Para 8 of the reported decision refers). In the case of Manisha Pharma Plasto Pvt. Ltd. [1999 (112) E.L.T. 22 (Del.)] had held that opinion and recommendations of the System Committee on HSN cannot just be brushed aside . Revenue has not brought out in the written and oral submissions, any decision contrary to the above. Being bound by the Delhi High Court decision and in view of the fact that CBEC has on occasions, relied upon the WCO rulings on classification to issue instructions on classification under CETA, 1985, we find no substance in the arguments, now being placed before us, that WCO ruling made by and published in the authoritative classification opinion by the WCO should be ignored. Especially when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods, viz., agricultural products and labour (Exhibits 2-F and 2-G), engineering team, goods and tools (Exhibit 2-J), vegetables and farmers (Exhibit 2-K), persons and boxes (Exhibit 2-M), hotel staff, vegetables and grocery (Exhibit 2-N), mechanics and spare parts (Exhibit 2-O). # only 4 users used the said vehicle to transport persons (Exhibits 2-A, 2-E, 2-L and 2-P). Assuming, whilst denying, that the user was a relevant criteria for determining classification, the main use of the said vehicle was to carry goods, or goods and persons, and, consequently, it must be held that the vehicle was correctly classified as a vehicle for the carriage of goods. See Annapoorna Carbon Industries Co. v. State of Andhra Pradesh, (1976) 2 SCC 273, 276-7 (S.C.). 4. Regarding the letters of ARAI, Exhibits 3-A, and 3-B of department s affidavit. These letters merely describe the different categories of vehicles under the Terminology of the Indian Standards Institute. It should be noted that ARAI had itself classified the said vehicle as falling in the N-1 category, as per IS : 14272, which is the standard relied upon by the department, as is clear from Exhibit B of the reply affidavit filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common use, that would be relevant, such common use as found, based on material relied by Revenue, is to be of Transport of Cargo . Therefore 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 . A single isolated Advertisement cannot be a cause to classify the entity under 8703. The substantial normal use, as it appears, from the documents in the Miscellaneous Application of Revenue is for transport of goods. Exact proportions of one use over other was not required to be determined. We find that the material does not help the plea of Revenue to cause a classification under 8703. (i) We have considered the following submissions made by Revenue in written reply dated 31-12-2001 - In view of the fact that neither the Automotive Research Association of India and nor the Bureau of Indian Standards are statutorily capable of opining or effectively laying down any descriptional character of the impugned vehicle for the application of appropriate Excise Tariff Entry, the only statutory provision which defines the character of the impugned vehicle must be accepted a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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