TMI Blog2016 (7) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... sst. Commr (AR), for appellant Naresh Thacker, Advocate with Shri Chirag Shetty, Advocate, for respondent ORDER Per: M.V. Ravindran This appeal is filed by the revenue against Order-in-Appeal No. PI/7 to 9/2005 dated 07.01.2005. 2. The relevant facts that arise for consideration are the respondent herein are manufacturers of go-kart and parts thereof. It is alleged that the go-karts manufactured by the respondent are classifiable under chapter sub-heading number 8703.90 and that they have manufactured the products without licence. After investigation, show cause notice was issued to the respondent directing them to show cause as to why the duty payable on the go-karts cleared be not demanded with interest and penalty not imposed. The respondent contested the show cause notice on merits inter alia stating that the classification of the product would be under chapter sub-heading number 95.08 as Fairground amusements. The adjudicating authority after following the due process of law confirmed the demands raised and also imposed penalties besides demanding interest. Aggrieved by such an order an appeal was preferred before the first appellate authority. The firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the amusement park. It is also an admitted fact that the Go-Karts are used solely for the purpose of fun. Therefore, the appropriate classification can only be under CeTH 9508.00. C. The HSN Explanatory Notes provide that the fairground amusements falling in the aforesaid Heading would include the following: a. Roundabouts of all kinds. b. Dodge-em car installations. c. Water-Chutes. d. Scenic railways and slides. e. Swinging boats. f. Shooting galleries and coconut shies. g. Mazes. h. Freak shows i. Lotteries. D. The aforesaid is an inclusive explanation and therefore, Go-Karts which are used for joy rides are more akin to Dodge-em cars, ought to be classified under CeTH 95.08. E. Go-Karts also do not fall under any of the exclusions provided under Chapter 95 of the CETA. The Appellant s submission that Go-Karts are sports vehicles which are excluded under Chapter Note 1 (m) is erroneous since Go-Karts are not sports vehicles. The Respondents submit that they have provided detailed charts, and opinions as to how Go-Karts are different from sports vehicles which were a part of the Appeal Paper book before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expert opinion. It is pertinent to mention that above mentioned expert opinion unequivocally stated that the Go-Karts in the present case cannot be called motor vehicle. Hence, the contention of the department to classify the Go-Karts under Chapter heading 87.03 is misplaced as the same applies only to motor vehicle. Reliance is placed on the following decisions to buttress the contention that the expert opinion should be considered by the department and can not be rejected- M/s Ahuja Radiosm v/s Collector of Customs 1997 (93) ELT 344 Collector of Customs v/s Vishal Surgical 1996 (88) ELT 655 M/s Wipro Ltd V/s Commissioner of Customs 1990 (107) ELT 398 Go-Karts are not principally designed for transportation of persons or goods. J. The impugned order has rightly held that Go-Karts are not principally designed for transportation of persons or goods which is the essential requirement for classification under CeTH 8703.90. The entry reads as follows, Heading Subheading Description Rate of Duty (1) (2) (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reunder. Further importers and dealers in motor vehicles have to get a valid certificate of compliance as per the provisions of Rule 126 of the Central Motor Vehicle Rules, 1989 (CMVR for short). It is also mandatory for the vehicle imported to be submitted for test by the Vehicle Research and Development Establishment, Ahmednagar or the Ministry of Defence of the Government of India or ARAI, Pune or Central Farm Machinery Training and Testing institute, Budni, M.P. P. From the above, it is clear that even statutorily it is a mandatory requirement that the above agencies certify that the vehicles imported comply with the Motor Vehicles Act and CMVR Rules. Accordingly, if the Go-Kart in the present case was imported, then it would necessarily have to be certified by ARAI or other institutes as complying with the aforesaid provisions before classifying the same under Chapter 87. Q. In the present case, the ARAI has categorically stated that the Go-Karts of the Respondents do not require any certification. Therefore, the impugned order has rightly held that Go-Karts are not principally designed for transportation of persons, hence classifiable under Chapter 9508. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement and not for transportation of person. Furthermore, the fact that the Go-Karts in the present case are for amusement and can not be considered as motor vehicle was corroborated by expert opinion. W. It is settled legal position that a judgment must be read applicable to particular facts and doctrine of precedent orders not applicable when the facts in two cases are dissimilar. As stated above the facts of Leisureland Pvt Ltd are different from the present case, hence it can not be followed and does not have a binding effect. Reliance is placed on the following judgment to buttress this contention- Alembic Glass Industries Ltd v/s Commissioner of C.ex 2001(135) ELT 1230 X. It is submitted that although the Go-Karts in the case of Nishiland Pvt Ltd are similar to the Go-Karts in the present case, the legal arguments of expert evidence and mandatory requirement of the ITC HS Exim Policy was not placed before the Honble Tribunal. Since, these arguments were not placed before the Honble Tribunal in the case of Nishiland although it was logically involved in the facts, the decision is not an authority on these points and said be sub-silentio. It is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Leisureland Pvt. Ltd (supra). He would then draw our attention to the differences between the case in Leisureland Pvt. Ltd (supra) and in the case in hand before us. To support his case he would draw our attention to their submission to submit that the motor vehicle is different than the go-kart. He would urge that the common parlance test the applied in the case in hand as there is no definition of motor vehicle in the Central Excise tariff act hence the definition of motor vehicle under the motor vehicle act needs to be considered. 5. We have considered the submissions made by both sides and perused the records. 6. The dispute between the revenue and the respondent assessee is regarding the classification of the products manufactured by them which is go-kart. The assessee claims the classification of the same under chapter heading number 9508 while revenue claims the classification under chapter heading number 8703. Both sides have relied upon various documents to justify their claim of classification. In order to appreciate the correct position of law, the relevant chapter sub-heading numbers are reproduced. 87.03 Motor cars and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble of speed upto 40 KM per hour. Its use as a vehicle on roads (though private) is in fact established by evidence of its purchase for use in tea estates which usually have a network of private roads within the estate. Moreover, the tariff heading requires only that the goods should be principally designed for the transport of persons. That the go-karts are so designed is evident from its specifications and also description of its Special Features as, Good for in-city/ township transportation (subject to R.T.A. approval, Also convenient for Tea Estates, factories, Hotels, Farm Houses, Tourist resorts. Sea-side resorts and Private residence. (No RTA approval required). It is clear from the above that go-kart would satisfy the criteria for classification under Heading 87.03 CETA. The fact that its specifications are such that it may not qualify for being registered under the provisions of Motor Vehicles Act and Rules thereunder will not come in the way of its classification under Heading 87.03 as it is worded so long as it can be shown that it is a motor vehicle and that it is principally designed to transport persons. In fact, the Caution in their invoices for the sale of go-kart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier Central Excise Tariff, which is for motor vehicles and tractors including trailors contained definition of motor vehicles as meaning of mechanically propelled vehicles other than tractors designed for use upon roads. It had noted that 87.03 was not so worded as to permit its scope to be limited to vehicles designed for use upon roads. Applying that criteria the fact that the go-kart under consideration is not capable of being used on public roads of all kinds at all times, day and night, will not mean that it is not classifiable under Heading 87.03. 9. On the other hand we had found very considerable similarity with regard to such aspects as engine capacity, speed, passenger capacity, overall dimensions etc. as will be evident from the following chart. In the present case In Leisureland Passenger Capacity Single seater Single/double Weight 180 kgs. 60 to 90 kgs Speed 45 kmph 40 kmph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is transportation. He also contends that the manufacturers in the present case has made a claim that it is principally designed for use in an amusement park. 12. The meaning of the word transport with which we are concerned is to carry goods or persons from one place to another. The argument that because the transport begins and ends at one point around a track there is no transport is simplistic. It is like saying that a person who returns home after going to his place of work has not been transported. No doubt the transport in a go-kart of a person may not be for a purpose such as business, etc. It is transport for pleasure or for the thrill of racing. It however, continues to be transport. A person who goes for a joy ride in an aeroplane has certainly been transported from the ground up to a certain height and a certain distance and back again. 13. The certificate issued to the appellant by Formula K. International Limited, the manufacturer, has been cited in support. This certificate assumes that this go-kart is made for amusement and recreation and is not designed for overall use of regular rides. It emphasises the absence of gears and reversing facility, lights e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l operation. The heading also includes items of auxiliary equipment provided they are presented with, and as components of, these various amusements, notwithstanding that when presented separately such items (e.g., tents, animals, musical instruments, power plants, motors, lighting fittings, seats, and arms and ammunition) would fall in other headings of the Nomenclature. Subject to the provisions of Note 1 to this Chapter, articles which are identifiable as designed solely or principally for use as parts and accessories of such amusements (e.g., boats for swings and water-chutes), remain classified here when presented separately. 15. The go-kart that is under consideration before us is an individual item, capable of being operated on its own, and had not been shown to be a part of a larger installation. As we have noted, it has not been demonstrated that it cannot function on its own. The specific notes to the heading therefore do not justify its classification under Heading 95.08. Therefore, as between the alternative classifications, once Heading 95.08 is excluded the other one 87.03, will apply. Notes under Heading 87.03 also make it eminently clear that it covers mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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