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2019 (11) TMI 421

..... yond the period of 30 days from the date of the communication of the Advance Ruling Order as envisaged under Section 100(2) of the CGST Act, 2017, which provides that every appeal shall be filed within a period of 30 days from the date on which the ruling sought to be appealed against is communicated to the concerned officer, the jurisdictional officer and the applicant. In view of the above delay, which amounts to 20 days beyond the date of the communication of the Advance Ruling, the Appellant has separately filed a separate application for the condonation of delay in filing of the present appeal incorporating, in detail, the reasons for the said delay, and has pleaded for the condonation of the delay, and for the admission of the instant appeal for hearing on merits. Classification of goods - Rate of Compensation Cess - Tata Harrier vehicle - intra-State supplies and inter-State supplies of goods - Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017, as amended from time to time - scope of Sr. No. 52B of Cess Rate Notification - For the purpose of Cess @ 22% under Sr. No. 52B of Cess Rate Notification, whether the ground clearance of the vehicle is to be considered .....

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..... or vehicles in their unladen state has no significance or implication - it is observed that any vehicles whose ground clearance in laden state are below 170 mm. will not get covered under Sr. 52B of the Cess Rate Notification i.e. Notification No. 1/2017-Compensation Cess (Rate), dated 28.06.2017. Merits of the Advance Ruling order - Validity of order wherein the authority of the Advance Ruling has held that the ground clearance of the motor vehicle should be measured in unladen condition, which they attributed to the reasons that the weights of the passengers occupying any vehicle is not standardized, and will vary from passenger to passenger, and hence is not constant - HELD THAT:- The rulings made by the Advance Ruling Authority is arbitrary and ungrounded, and the same is based on the flimsy notion in so much as they inferred that the weights of the passengers occupying the motor vehicles is not standardized, as the same will vary with persons occupying the motor vehicle, and thereby causing fluctuation in the ground clearance of the motor vehicles. We would like to refer to the submissions made by the Appellant, wherein they relied upon the CESTAT Rulings in the case of COMMIS .....

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..... erein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-93/2018-19/B-32 dated 22/03/2019 = 2019 (5) TMI 494 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA. Brief Facts of the Case A. Tata Motors Limited (hereinafter referred to as The Appellant ) is in the business of manufacturing and selling of vehicles, chassis for vehicles and parts thereof. The Appellant manufactures commercial as well as passenger vehicles. B. The Appellant has launched its passenger vehicle, (Tata Harrier , which has following technical specifications: Particulars Details Seating capacity 5 persons including driver Engine capacity 1956 cc Fuel Diesel Market segment Utility Vehicle (UV) Length 4598 mm Grcund clearance (Unladen) 205 mm Ground clearance (Laden) 160 mm (subsequently amended to 176 mm) C. The Central Government has vide Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017, as amended from time to time, (hereinafter referred to as Cess Rate Notification ) notified the rate of Compensation Cess that would be levied on the intra-State supplies and inter-State supplies of such goods. D. The rate of compensation cess, applicable on supply of goods, is determined bas .....

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..... broadly covers vehicles other than railway or tramway rolling-stock, and parts and accessories thereof. I. As the Tata Harrier is vehicle having seating capacity of upto 5 persons (including driver) most relevant Heading is 8703 which covers motor cars and other motor vehicles principally designed for the transport of less than 10 persons (including driver), including station wagons and racing cars. J. The relevant extract of the Chapter Sub-heading 8703 32 is reproduced hereunder Tariff Item Description of goods (1) (2) 8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars 8703 32 - Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc : 8703 32 10 - Vehicles principally designed for the transport of more than seven persons, including the driver - Other : 8703 32 91 - Motor cars 8703 32 92 - Specialized transport vehicles such as ambulances, prison vans and the like 8703 32 99 - Other K. Since, the Tata Harrier has engine capacity of 1956 cc and seating capacity of 5 persons (including driver), the Appellant was of the view that it would be classifiable .....

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..... ing Minimum Ground Clearance as 176 mm (laden) in accordance with IS-9435; in the absence of said ARAI Certificate at the time of filing Application for Advance Ruling, the Appellant had mentioned Ground Clearance in laden condition as 160 mm in table to Question No. (1.1); under the circumstances, the Appellant requested to treat the said Application amended to this effect more specifically question nos. (1.1), (1.4) and (1.5) framed in the Application; c. notwithstanding the above factual amendment in subject Application, considering the fact that in near future the Appellant may launch vehicles with ground clearance below 170 mm in laden condition, the Appellant requested the Advance Ruling Authorities for deciding the questions raised in Application. O. In the said letter, in view of amendment in ground clearance, the Appellant also framed Additional Question as below: Q. No. (1.4A) Vehicle whose ground clearance in unladen condition is more than 170mm but below 170mm in laden condition, whether will get covered under Sr. No. 52B of Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017 as amended. P. The ARA passed Order No. GST-ARA-93/2018-19/B-32, dated 22.03.2019 .....

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..... her will get covered under Sr. No. 52B of Cess Rate Notification? Answer to question No. 1.6: To get covered under Sr. No. 52B of Cess Rate Notification No., the ground clearance should be 170 mm or above in unladen condition. Q. Being aggrieved by the answers in Impugned Order to question Nos. 1.3 and 1.6 of the Application for Advance Ruling, the Appellant is filing the present Appeal before your honour to the extent they are answered against the Appellant. R. However, the Appellant has filed this appeal beyond the period of 30 days from the date of the communication of the Advance Ruling Order as envisaged under Section 100(2) of the CGST Act, 2017, which provides that every appeal shall be filed within a period of 30 days from the date on which the ruling sought to be appealed against is communicated to the concerned officer, the jurisdictional officer and the applicant. S. In view of the above delay, which amounts to 20 days beyond the date of the communication of the Advance Ruling, the Appellant has separately filed a separate application for the condonation of delay in filing of the present appeal incorporating, in detail, the reasons for the said delay, and has pleaded for .....

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..... vehicle is required to obtain certificate from The Automotive Research Association of India ( ARAI ) to the effect that the vehicle manufactured by the manufacturer is complying with the Central Motor Vehicles Rules. The said certificate is issued based on the standards laid down in this regard. ARAI is a research institution of the automotive industry with the Ministry of Heavy Industries & Public Enterprises, Government of India. The ARAI has been certifying the specification/ dimensions of vehicles including ground clearance in accordance with IS-9435. 5. IS-9435 is Indian Standard for terms and definitions relating to dimensions of road vehicles issued by Bureau of Indian Standards. At Clause 5.8 of IS-9435 enclosed as Annexure - 11, following is mentioned: The distance between the ground and the lowest point of the centre part of the vehicle. The centre part is that part contained between two planes parallel to and equidistant from the longitudinal median plane (of the vehicle)(see 4) and separated by a distance which is 80 percent of the least distance between points on the inner edges of the wheels on any one axle. Note - This measurement has to be done on fully laden ve .....

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..... The Appellant also submits that there are specified norms for computation of ground clearance. As per these norms, the dimension is to be scaled with the vehicle loaded to its maximum capacity or the approved gross vehicle weight ( GVW ). In other words, the ground clearance is measured in laden condition and the weight considered in determining the same is the maximum capacity or the approved gross vehicle weight. 9.4 Given this, the finding that the weight of passengers will not be constant and will change, is not correct to determine the ground clearance of the vehicle. Accordingly, the Appellant submits that the impugned Order should be set aside to the extent it is held that the ground clearance is to be considered in unladen condition. 10. Since, the GST law including the Rate Notification does not lay down the procedure method to determine the round clearance the reference should be drawn from The Central Motor Vehicle Rules 1989 10.1 It is a settled position of law that if a term is not defined in the Act or the rules, then the meaning of the said term should be drawn from the Statue which governs the same subject. The view of the Appellant finds support in the case of Mahi .....

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..... n this, motor vehicle is an object which is common for Rate Notification and the Motor Vehicle Act, 1988. 10.4 By applying the ratio laid down in case of Mahindra & Mahindra Ltd. [2015 (324) E.L.T. 707 (Tri. - LB)] = 2015 (4) TMI 563 - CESTAT MUMBAI, the Appellant submits that for determination of ground clearance, reference should be made to Motor Vehicles Act, 1988 and the rules made thereunder. 10.5 It is relevant to note that as per IS 9435:2004 - TERMS AND DEFINITIONS RELATING TO DIMENSIONS OF ROAD VEHICLES OTHER THAN 2 AND 3 WHEELERS ground clearance for measurements should be carried out in laden condition. 10.6 The fact that the ground clearance is in accordance with the criteria laid down by Indian Standards IS 9435:2004 is also mentioned in the certificate issued by ARAI. 10.7 Given the aforesaid, the Appellant prays that the impugned Order should be set aside, to the extent it states that for the purpose of Cess Rate Notification, the ground clearance should be considered in unladen condition. Personal Hearing 11. A personal Hearing in the matter was conducted on 22.08.2019, wherein Shri Rajesh Shukla, Head, Indirect Tax and Shri Sanjay Ekhande, Dy. General Manager, .....

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..... pellant. Discussion and Findings 13. Heard both the parties, and have also gone through the facts of the case and all the written and oral submissions made by the Appellant as well as the Jurisdictional officer/Respondent. The Appellant, having been aggrieved with the ruling in respect of Question 1.3 and Question 1.6, have filed the present appeal against the impugned Advance Ruling passed in respect of the aforementioned questions 1.3 and 1.6 only. Hence, first we would like to go through the impugned ruling pronounced by the Advance Ruling Authority in respect of the above-mentioned questions, wherein they held as under: Question No. 1.3: For the purpose of Cess @ 22% under Sr. No. 52B of Cess Rate Notification, whether the ground clearance of the vehicle is to be considered in laden condition or in unladen condition? Answer to question No. 1.3: The ground clearance given in the Cess Rate Notification must be arrived in unladen condition. Question No. 1.6: Vehicle whose ground clearance in unladen condition is more than 170mm but below 170mm in laden condition, whether will get covered under Sr. No. 52B of Cess Rate Notification? Answer to question No. 1.6: To get covered under .....

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..... the present case is The Automotive Research Association of India ( ARAI ) to the effect that the vehicle manufactured by the manufacturer is complying with the Central Motor Vehicles Rules. The said certificate issued by ARAI is based upon the standards laid down in this regard. ARAI is a research institution of the automotive industry with the Ministry of Heavy Industries & Public Enterprises, Government of India. The ARAI has been certifying the specification/ dimensions of vehicles including ground clearance in accordance with IS-9435. 19. Further, it is seen that IS-9435 is Indian Standard for terms and definitions relating to dimensions of road vehicles issued by Bureau of Indian Standards. Clause 5.8 of IS-9435, which deals with the minimum ground clearance of the motor vehicles, is being reproduced herein under: The distance between the ground and the lowest point of the centre part of the vehicle. The centre part is that part contained between two planes parallel to and equidistant from the longitudinal median plane (of the vehicle) (see 4) and separated by a distance which is 80 percent of the least distance between points on the inner edges of the wheels on any one ax .....

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..... he CESTAT Rulings in the case of TELCO Ltd. [2002 (143) E.L.T. 548 (Tri.-Mumbai)] = 2002 (2) TMI 717 - CEGAT, MUMBAI which has been upheld by Hon ble Supreme Court and reported in [2003 (152) E.L.T. A259 (S.C.)] = 2002 (9) TMI 876 - SC ORDER], wherein to compute payload of the vehicle the standard weight per passenger was considered as 68 kg in line with the yard stich proposed by motor vehicle law. In view of the above cited ruling of the CESTAT Mumbai, which was subsequently upheld by the Supreme Court, it is observed in the instant case that the Advance Ruling Authority has not followed the principle of the ratio decidendi, and thereby erred in holding that the weight of the persons occupying the motor vehicles cannot be standardized, and hence would not be constant for the purpose of determining the payload of the vehicle, which in turn will cause fluctuation in the ground clearance of the vehicle in the laden state. They relied on this theory and eventually decided that the ground clearance of the vehicle will be measured in the unladen state to determine the applicability of the compensation cess as prescribed under the Cess Rate Notification i.e. Notification No. 1/2017- Com .....

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