9911796707
TMI Blog1998 (2) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicles and hence on the basis of investigation and after carrying out detailed adjudication the lower authorities confirmed the classification under sub-heading No. 8706.30 of the Central Excise Tariff. In this case the show cause notice was issued on 28-8-1986, which was adjudicated by the Assistant Collector by his order dated 6-2-1987 and has also confirmed a duty demand of ₹ 38,704.80 under Section 11A of CESA, 1944. The Assistant Collector in his order has held that the goods chassis and cowls had been manufactured as vehicles for transport of goods. However, the chassis and cowls so manufactured are capable for being used for manufacture for carrying passenger type of vehicles. He has observed that since the classification and rate of duty in the present case depends on the kind of vehicles in which it is used and therefore, the claim of the appellants cannot be accepted to the effect that the classification should be independent of what happens to the goods subsequently. This reasoning has been adopted on the ground that at the time of removal according to purchase orders assessee knew for what purpose those can be used whether for transport of goods or for passenger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86-C.E., dated 1-3-1986. (iii) Chassis fitted with engines for Motor Vehicles falling under Chapter Heading 8701 to 8705 of the Central Excise Tariff Act, 1985, are classifiable under Heading No. 8706. The details of all the vehicles were given in Annexure to the show cause notice. The party classified NC-640/665 chassis and cowl for use of Heading No. 87.04 i.e. for the motor vehicles meant for transport of goods. (iv) On the basis of intelligence collected by the department that the chassis cleared by the party by declaring that they were for the motor vehicles for the transport of goods, were in fact used for the motor vehicles for the transport of persons. Motor vehicles for transport is classifiable under Chapter Heading 8706.30 which attracts duty at 35% ad valorem. Working on the above intelligence, Supdt. Range-H, of Nasik Division, in whose jurisdiction the party's factory is located, called for information from the actual customers of NC-640/NC-665 chassis to know as to whether the same were used for vehicles for transport of goods or for transport of persons. A larger number of customers spread all over the country to whom the party had sold NC-640/NC 665, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Fisheries, Bihar : vide their letter No. 262/Fish/dated 4-2-1986 for supply of three number of NC 665 for fabrication of jeep body with Dunlop Seats and canvas hood (Passenger vehicle). (xi) Letter No. J:CN:PR:637/1036, dated 4-7-1986 to Lal Bahadur Shastri Engineering RES & Consultancy Centre, Trivandrum. Regarding supply of NC 640 Cowl and chassis with Roplas Hiridar fibre glass body. It is mentioned that they are requesting their Bombay office for release of cowl and chassis early to Roplas, Pune for fitment of FRP body. (xii) Letter No. MD/APG/9808, dated 26-12-1986 to M/s. Simla Automobiles, Simla regarding NC and CJ Advertisement. The advertisement in `Nava Bharat Times' dated 13-12-1985 mentioned that NC-640 DP Cowl and Chassis-4WD & 2WD with several body options which shows that the party had prior knowledge of NC Cowl and Chassis to be utilised for passenger carrying applications as one of the option and as admitted by Shri S.K. Sengupta in his statement dated 3-3-1988 recorded before the Assistant Collector, Central Excise, Aurangabad. (xiii) Letter No. SA/86/2385, dated 8-4-1986 from M/s. Skyline Automobiles, New Delhi to the party requesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched the premises of Regional Sales Office situated at 6-R. Ambedkar Road, Pune and the premises of M/s. Silver Jubilee Pvt. Ltd., Pune on 29-2-1988 and recovered incriminating documents and recorded the statements of concerned individuals. Shri H.F. Eduljee, Branch Manager, Regional Sales Office of the party at Pune stated that their office was handling only Jeep trucks upto August, 1987 and thereafter the additional responsibility of Jeep was placed with them by a general directive by the Head Office, Worli, Bombay. That the orders are placed by the dealers directly to their Head Office and supplies are made from the factory. That they have no relation with any other body builder. Shri D.A. Birajdar, Chief Accountant of M/s. Silver Jubilee Pvt. Ltd., Pune stated that they deal in Mahindra vehicles & spare parts. They receive cowl and chassis and platform in case of NC-665/640 models. That they deal in fibre glass bodies manufactured and sold by M/s. Roplas India Ltd., Pune according to the requirement of the customers. That NC-640 and NC-665 models are sold by them as cowl and chassis and Mini Trucks only. The Preventive Officers also visited the premises of M/s. Roplas I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Super Deluxe. These bodies were developed in answer to market demands. The sitting capacity of different type of bodies referred above has been stated to be as follows :- 1. Hirider 6+1 (Driver) 2. Ashwini Passenger 7+1 (Driver) 3. Ranger 7+1 (Driver) 4. Hirider Super Deluxe 8+1 (Driver) The above referred bodies made on NC vehicles are only meant for passenger carriage. These vehicles are not meant for the purposes of carrying loads. That production is undertaken of all the FRP bodies for passenger utility. The views of original manufacturers i.e. M/s. Mahindra & Mahindra is taken because the sale of body from their company and sale objectives of vehicles of the party are complementary to each other. The Preventive Officers along with the assistance of officers of Nasik Division and the Officers from Central Excise Collectorate, Bombay-I searched the Central Sales Office and the registered Head Office of the M/s. Mahindra & Mahindra at Bombay on 2/3-3-1988 and recovered incriminating documents found relevant with the inquiry and recorded the statements of the concerned officers. In his statement dated 3-3-1988, Shri Keshub Mahindra, Chairman of M/s. Mahindra & Mahin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and they were aware that customer was using their vehicle for application of passenger. He further deposed that they had knowledge that the vehicles were being put for passenger application by the customers. That the passenger application is a multiple use by the customer. NC Cowls and Chassis were for multiple use. (iv) In his statement dated 11-5-1988, Shri K.S.C. Parthasarthy, Deputy General Manager (R&D) of the party deposed that progressive springs were for comfort in riding of the vehicle with improved riding characteristics, the safety of vehicle was also improved. That the introduction of progressive springs aimed at primarily removing problems of bumpy ride and consequently allowing the comfortable ride. That the total load carrying capacity of springs remained unaltered hence pay load of the vehicle did not change but the comfort of the passengers improved in the unladen condition. In a memo dated 29-12-1985 addressed to M.S. Gadikar, Shri M.S. Parthasarthy mentioned that originally NC Springs were not designed for 1 ton pay load truck and subsequently "Marketing" had requested to re-design the spring to suit the metal body for which a progressive spring was int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced in 1981 and designated the NC 665 was designed as a mini truck and the company found that a number of such vehicles though not designed for the transport of person were in fact put to use of transport of persons. Later the company introduced the cowls and chassis model of that vehicle and made certain design changes in the chassis and these changes of design consisted of reducing the size of the tyres and changing the design of the springs and suspension. The changes though mainly introduced for reasons of safety for the transport of goods had the effect of making of chassis capable of adaptation for the transport of persons. The letter further mentioned that they were aware that a number of NC series Cowl and Chassis vehicles have been converted to passenger application. In order to know the difference between the vehicles for the purpose of Transport of persons and transport of goods, the vehicle Research and Development Establishment, Ministry of Defence, Government of India, was addressed, who gave the expert opinion that the only distinguishing feature between Load Carrying Vehicle and Passenger Carrying Vehicle is that the load carrying chassis is provided with stiffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs, therefore, it appears to have been designed for transport of persons. In view of the allegations made up in the show cause notice and the annexure filed in detail that the party had prior knowledge regarding the end use of the Cowls and Chassis cleared by them. Therefore, the demand of ₹ 3,53,78,652.30 was and also they were asked to explain as to why penalty should not be imposed. It was alleged that the party had suppressed the facts with an intend to evade payment of duty, therefore, the extended period of 5 years is rightly applicable in the present case. 5. The assessee filed their reply to the show cause notice through their advocates. At the outset, it was contended that Rule 9 (2) cannot be invoked in the present case, as the goods had been cleared after due approval of classification list, price list etc. and were openly cleared in the usual and ordinary course after submitting gate passes as required by Central Excise Law. In this regard, ruling of the Supreme Court judgment in Sanjana's case was relied as reported in AIR 1970 SC 2039, 2048 and J.K. Steel Ltd. case as reported in AIR 1970 SC 1173. In paragraphs 9 to 19, they have traced out the history of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in AIR 1972 SC 229 has observed : "Ordinarily chassis have bodies attached to them for commercially profitable use." 8. They have relied on the literature of other companies also following similar procedure for manufacturing their vehicles. They stated that the fact that the use of vehicles can be altered not only at the stage of initial purchase but subsequently is recognised by the Excise Department itself as is clear from the Trade Notices issued in 1988 by the Baroda, Bombay and Hyderabad Collectorates. They stated that the object in selling chassis is to enable the individual purchaser to have a body built on such chassis to his individual requirements. They furnished a table to show that of the total number of 25086 NC models cleared between 1-3-1981 and 31-3-1988 as many as 13425 constituting 54 per cent of the total were cleared in the form of mini trucks and the balance of 11661 constituting 46 per cent of the total were cleared in the form of cowl and chassis. Therefore, they stated that the bulk of the cowl and chassis so cleared were supplied to the Government Departments etc. many of whom used these cowl and chassis after having passenger bodies install ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icles cleared in the form of cowl and chassis are in the all basic respects identical to the vehicles cleared as mini-trucks, the only difference being that in respect of the latter certain fixtures and fittings have been added to enable the said vehicles to function as mini-trucks. They state that as there is no significant difference between the two, therefore, it established, inter alia, by the observations made during the inspection by the CERA Audit dated 9th May, 1983 in which it was contended that the cowl and chassis were nothing but intermediate products of mini-trucks. They had disputed these contentions. They had relied on the correspondence on this aspect of the matter to show that it conclusively establishes that the said cowl and chassis are in all basic respects identical to the said mini-trucks. They stated that as far as the design changes introduced in the NC models are concerned, the principal change has been in the introduction of what are called progressive springs. They pointed out that the show cause notice appears to proceed on the erroneous basis that a progressive spring is the same as a soft spring and that introduction of a progressive spring, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n wagons and racing cars. Heading 87.04 deals with motor vehicles for the transport of goods. Heading 87.05 deals with special purpose motor vehicles. They stated that passenger type motor vehicles would merit classification under either Heading 87.02 or 87.03, depending upon their design. If they had designed for the transport of 10 or more persons they would merit classification under Heading 87.02; if they had designed for the transport of less than 10 persons, they would merit classification under Heading 87.03. If the motor vehicles are not principally designed for the transport of persons they would not merit classification either under Heading 87.02 or 87.03. They relied on the meaning of the word "for" as appearing in Indian Chamber of Commerce in AIR 1976 SC 348, 356. The Supreme Court has explained the meaning of the word "for" :- "'for' used with the active participle of a verb means `for the purpose of....' It connotes the end with reference to which anything is done. It also means the sense of `appropriate' or `adopted to'; suitable to purpose....." Therefore, they stated that the chassis would, therefore merit classification under sub-heading 8706.30, if the chassi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985 (20) E.L.T. 70 (Bom.) = 1987 (11) ECR 204] and Union Carbide [1976 (38) STC 198]. They also stated that the proviso to Section 11A(1) of the Act cannot be invoked in the present case. They stated that the new Tariff came into force on 1st March, 1986 and that they had submitted a classification list classifying the NC cowl and chassis under sub-heading 8706.40 and the said classification list had been approved by the Assistant Collector on 27th August, 1986. They stated that before the said classification is approved it is the duty of the officer to carry out such enquiries as is provided under the provisions of Rule 173B and once the classification is deemed to have been approved it follows that such classification is deemed to have been approved after due enquiries. They also relied on several materials to show that the department had full know-ledge about the use to which the chassis were being put to passenger use. They also relied on the classification list submitted on March, 1987 seeking classification of the said cowl and chassis under Heading 8706.30 as also sub-heading 8706.40. They stated that enquiries had been made and they had clarified by their letter dated 5th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also looked into the aspect pertaining to the expression "FOR THE VEHICLES" would mean and convey. He has held that one has to go into the aspect of designing of the chassis to determine the term "used for", in that event one has to go to the predominant use which is for the goods vehicle and therefore, no demand on merits could be made. In order to arrive at this conclusion he has looked into the technical literature produced by the appellants. He has noted from the Book Manual on Design and Application of leaf springs, SAE HS J-738 by Society of Automative Engineers, USA to state that variable or progressive spring is a popular type of spring particularly in the light truck models. They have the potential of improved ride quality over a wide load range. They are particularly used where a relatively low rate is desirable when the vehicle is in operation with only the driver and perhaps a light pay load, but a higher rate is required, when the vehicle is at designed loads. As in the light load range the second stage left are inoperative and as the payload increases they come into operation. From this description he has concluded that progressive springs are introduced only where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch Association of India, Research Institute of Automative Industry of Ministry of Industry). On reference by the enquiry officer that it was not possible to state that the chassis were designed for passenger vehicle. He has also referred to certificate issued by VJTI (Victor Jubilee Technical Institute, Bombay a Govt. of Maharashtra run Engineering Institute have Motors Degree Courses in Automobile Engineering) has categorically opined that the chassis was not suitable for passenger use and has features essential for a vehicle used for transport of goods. In view of these certificates from the experts, he has held that it does not support the view that the design is for suitable or appropriate for vehicle for transport of persons. Therefore, he has held that he could not find any specific design of the chassis meant for or changed for use for transport of persons. He has noted that from the history of the development of the Models and changes incorporated including the `progressive springs' it is observed that all the changes were contemplated and implemented by May, 1985 well before the new Tariff was enacted and implemented. The design was meant for and used for goods transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inguishing between load carrying vehicle and passenger carrying vehicle is that the load carrying chassis is provided with stiffer suspension whereas the passenger carrying chassis is provided with a softer suspension along with shock absorbers to provide a good riding comfort and that the tyres, their size is decided based on the load to be carried. The opinion of the Automotive Research Association of India is also relied which had given the opinion that it is difficult in the Indian automobile field to distinguish between the chassis designed for passenger carrying application and the chassis designed for goods carrying application, as there are hardly any such clear demarcation existing today. It was also clarified that ideally speaking the suspension system for passenger carrying version is expected to be designed for better ride comfort. However, the suspension parameters such as road conditions and many LCV manufacturer use same spring for both the application. It is not possible to state from the suspension design alone whether the chassis is intended for passenger or truck application. Therefore, it is contended that the Collector has wrongly placed reliance on the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed specifications or authoritative guidelines to decide whether a particular chassis is meant for transporting goods or transportation of passengers; the Collector ought to have considered the actual use of the chassis while deciding the classification of the chassis on the basis of maxim "resipsa loegiter" (the thing speaks for itself). It is stated that in this case VJTI had mentioned that the chassis are not fit for transporting passengers, therefore, the opinion of VRDE quoted that the vehicle for transport of passenger had soft spring and shock absorbers which distinguished it from the vehicle for transportation of goods ought to have been considered. They stated that the admission of the stated persons had been duly corroborated by various experts from all over the country, therefore, the proper classification for the goods in question ought to be under sub-heading No. 8706.30 as suitable for the vehicles of Heading No. 87.03. 12. We have heard the learned Sr. Advocate, Shri A.M. Setalvad for the assessee's company and the learned DR, Shri D.S. Negi for the Revenue. 13. The learned Sr. Advocate submitted that the goods in question cannot be classified as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of Excise Duty) or when it is imported (for the purpose of Customs Duty). In this regard, he relied on the judgment of the Supreme Court in the case of Dunlop India Ltd. v. Union of India as reported in 1983 (13) ELT 1566 (S.C.) = AIR 1977 SC 597, 607 and that of Bombay High Court judgment rendered in the case of Sainet Pvt. Ltd. v. Union of India as reported in 1984 (18) E.L.T. 141, 148. He submits that the sub-heading 8706.30 does not specifically or at all refer to the actual end-use of the chassis; on the contrary if correctly read, introduces the criteria of design, not the actual end-use. He submits that when the Parliament wanted to specify actual end-use it always does so specifically as can be seen from the Headings 37.07 and 40.11 and such is not the case with regard to sub-heading 8706.30. He points out that more than half of the very same item has been used for transport of goods. He submits that even if it is assumed for the purpose of arguments that the end-use of the said vehicle is to be taken as criteria then in that case what has to be considered is the predominant use as has been held in the case Annapoorna Carbon Industries v. State of Andhra Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollector of Customs as reported in 1989 (41) E.L.T. 144. He also refe- rred to uncontroverted affidavit of Mr. Parthasarthy, General Manager (R&D) that the said chassis were not designed for the transport of persons and that he has not been cross-examined though made available and his statement is required to be accepted. In this regard, he relied on the following judgments : 1. AEG Carapiet v. A.Y. Dederian - AIR 1961 Cal. 359 2. Modi Rubber Ltd. v. C.C.E. - 1989 (42) ELT 48 (Tri.) = 1989 (13) ETR 820 3. M. B. Moosa v. C.C. - 1986 (25) E.L.T. 804 4. Chander Kumar v. C.C. - 1990 (49) E.L.T. 257 14. He also submits that there is no ground to invoke Rule 9(2) as there was no clandestine removal and that the department's contention that clandestine removal is a "must" for application of Rule 9(2) is wholly wrong. In this regard, he relied on the judgment of the Supreme Court rendered in the case of N.B. Sanjana v. Elphinstone Spg. & Wvg. Mills as reported in 1978 (2) ELT (J399) (S.C.) AIR 1971 SC 2039. 15. He also submits that there is no ground for invokation of proviso to Section 11A(1) as according to them there was no suppression in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly after search. He submits that even in their earlier correspondence there was no indication about their clearances of the same goods for two purposes. Therefore, their contention that there is no suppression in the matter. The evidence of VJTI cannot be relied, as it is self-interested testimony. Even the reports of ARAI indicates that there is no specific design for any of the said end-use. 17. We have carefully considered the submissions made by both the sides and have perused the records. 18. In this case, it is clear from the admissions of the witnesses that the appellants had prior knowledge in large section of supplies pertaining to use of the chassis and cowl for use of transport of persons. However, for the purpose of classification, is this understanding sufficient? According to Revenue, the end-use is in-built in the tariff. On this point, the Sr. Counsel does not differ but he submits that end-use is not determinable on the reading of the tariff sub-heading, as the description under sub-heading 87.03 is "motor cars & other vehicles" principally designed for the transport of persons........" It is contended that this description does lay down the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wheels 8. Shock absorbers, fuel tank, petrol and hydraulic pipes, brake shafts and cables, and, of course, some means of mounting these components. The literature states that "On a conventional chassis the components are mounted on a frame, which at a later date in the vehicles manufacture will have the body fastened to it. Many production cars are now made with a combined welded construction of strengthened floor and body which replaces the conventional frame". On a further discussion on the types of frame, the literature concludes at page 82 that - "In general this type of chassis is used on large or expensive cars and commercial vehicles, and where the same engine, transmission and suspension might be used with different bodies". Therefore, it is clear that one type of chassis described therein has a common use both for cars and for commercial vehicle. It follows that use of "progressive rear springs" and `softer suspension' alone cannot be the criteria for determinative of its use for both the types of the vehicles. Moreover, the assessee were constrained to bring changes for giving better effect to transport vehicles as explained. Further, it is seen from the pamphlets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ministry of Industry, Govt. of India VT/TMB/MM/CE/65 Dated 4-8-1988 M/s. Mahindra & Mahindra Ltd. Automotive Division Akurli Road Kandivli (East) Bombay 400 101 Ref : Your letter No. M&M/ELC/NSK-27/87-88, dated 31-5-1988 and letter even No. fy. 5-6-1988 Dear Sirs, Though the differences in fully built vehicles for passenger and goods carrying applications are obvious, distinguishing between the chassis designed for passenger-carrying application and the chassis designed for goods carrying application is difficult in the Indian automobile field as there are hardly any such clear demarcation existing today. Today most of the Indian vehicle manufacturers use the same basic design of chassis for both bus and truck applications. In the heavier class of passenger carrying vehicles longer lengths are permitted by the RTOs in the certain areas. It is only abroad that the design consideration for passenger carrying vehicles are clearly different such as pneumatic suspension, integral body construction and rear engine (in the heavier class), etc. However these, still, are in the experimental stage in our country. Ideally speaking the suspension system for passeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Safety is an important criteria in the design of both passenger and goods vehicles, but comfort is much more an important criteria in the design of passenger vehicles. Comfort in vehicle is affected by fatigue due to vibrations in all directions and modes, surroundings in the vehicle, random or continuous noise, the external scenery, etc. Many of the factors are subjective in nature, but the results of some experiments regarding effects of vibrations on human comfort are available. These results lay down a guideline for vehicle designers to design vehicles from passengers' comfort point of view. Some of the results are given below : 1. If the vestibular apparatus of the inner ear is subjected continuously to linear and/or angular accelerations between about 0.5 and 0.75 Hz., dizziness and seasickness will be produced. 2. The visceral region objects to frequencies between 5 and 7 Hz. 3. The head and neck are sensitive to vertical vibration frequencies of 4-1/ 2, 8-1/2 and 12 Hz and longitudinal and transverse vibrations at 1.5 Hz. 4. If Kv is a criterion of unpleasantness or discomfort for longitudinal acceleration then Kv = A.e. 0.13 f; for A = acceleration, m/s2, f = fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amping = 1.584 Hz. NC-640-DP-4 WD vehicle is fitted with shock absorbers with resistance values at 85 rpm and 76.2 mm (3") stroke. Extension = 2562 + 316 N.S./m. and Compression = 347 + 169 N.S./m. The first shock absorbers are at an inclination of 6o with vertical and rear shock absorbers are at an inclination of 28o with vertical. The total critical damping for = 43851 N.S./m Effective damping force of front shock absorber each = 1218 N.S./m. Effective damping force of rear shock absorber each = 1082 N.S./m. Total effective damping force = 4600 N.S./m. Damping co-efficient = 0.105 Bounce frequency in first mode of vibration considering damping = 1.736 Hz. In disturbing condition, K = 2.59 for vertical vibrations 2.59 = A e0.13f Hence corresponding acceleration for CJ - 500 D vehicle is A = 2.108 m/s2 and for NC - 640 DP - 4 WD vehicle A = 2.0667 m/s2. The minimum height of step input producing disturbance to CJ - 500 vehicle = 2.13 cm. and the minimum height of step input producing disturbance to NC - 640 DP - 4 WD vehicle is 1.737 cm. In uncomfortable condition, Kv = 3.05 for vertical vibrations. Therefore, the minimum height of step input prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of India (Research Institution of the Automotive Industry with the Ministry of Industry Govt. of India) Grams : AUTOHSI POST BOX NO. 832 POONA 411004 Telex : 0145-484 VT/TMB/CE/66 Phones : 31819 444920 August 4, 1988 The Asstt. Collector (Prev.) Office of the Collector of Central Excise & Customs Pratapmal Surana Complex Jafar Road, Aurangabad Ref : Your letter No. F. No. P/VII/92/2-88/7696, dated 22nd June, 1988 Dear Sir, Though the differences in fully built vehicles for passenger and goods carrying applications are obvious, distinguishing between the chassis designed for passenger-carrying application and the chassis designed for goods-carrying application is difficult in the Indian automobile field as there are hardly any such clear demarcation existing today. Today most of the Indian-vehicle manufacturers use the same basic design of chassis for both bus and truck applications. In the heavier class of passenger carrying vehicles longer lengths are permitted by the RTOs in the certain areas. It is only abroad that the design consideration for passenger carrying vehicles are clearly different such as pneumatic suspension, integral body constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial vehicle is the classification. It is understood that RTO authorities of various states have different classifications. The terms, jeeps, mini trucks, etc., are derived from common usage and we are not aware of any standard technical definitions. Thanking you, Yours faithfully, for the A.R.A.I. Sd/- T.M. BALARAMAN DEPUTY DIRECTOR" 22. As can be seen, this report has been obtained by the department. This report fully supports the assessee. Further, the affidavit of Shri K.S.C. Parthasarthy, General Manager (R&D) has not been controverted by the Revenue. Hence in the face of these wealth of evidence, the point raised by the Revenue in their appeal has to be negatived and the learned Collector in Revenue appeal E/998/95 has rightly come to the conclusion that the Revenue has not established their case on merit. The aspect pertaining to the knowledge of the party of the goods being put to different uses by customer loses its significance, as the goods were not for "principal design for not for the transport of persons" but it was for commercial vehicles also and that the commercial and trade understanding was also as such. Further, the other manufacturers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration." 26. As can be seen Rule 3(a) lays down that a specific entry shall be preferred to headings of general description. In the present case, the goods are not specific nor the technical evidence discloses that they were "principally designed for transport of persons". The evidence discloses that the goods have predominantly used (54%) for transport of goods. Hence the heading of specific description is required to be excluded. The Rule 3(c) states when goods cannot be classified with reference to (a) or (b) they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. The Heading 87.04 occurs last and as both the headings equally merit classification, the Collector adopted Heading 87.04 is fully justified and that t ..... 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