TMI Blog2023 (12) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... and 17.09.2009 were placed on them. Copies of the purchase orders placed on Bafna Healthcare for conversion of Force Traveller Van No. 3350 mm WB into Emergency Response Van have been enclosed. The Commissioner, after noticing that though the vehicles at the time of delivery could not be used as ambulances and they had been modified subsequently, proceeded to hold that the vehicles supplied by Force Motors were incomplete or unfinished vehicles having the essential characters of complete or finished ambulance and thus would be classifiable under ETI 8703 33 92 in view of the provisions of rule 2(a) of the General Rules of Interpretation. The Commissioner was not justified in drawing such a conclusion. As observed earlier, the goods have to be assessed in the form in which they are presented at the time of clearance and not in the form they may ultimately take. The vehicles at the time of clearance did not have the essential character of an ambulance. What was purchased were bare delivery vans without any fittings. It cannot, therefore, be said that the vans had the essential character of an ambulance. Rule 2(a) of the General Rules for Interpretation would not come to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with penalty and interest. The Commissioner has also imposed penalty upon GVK Emergency Management Research Institute, Dehradun (appellant of Excise Appeal No. 51661 of 2021), GVK Emergency Management and Research Institute, Bhopal (appellant of Excise Appeal No. 51662 of 2021), GVK Emergency Management and Research Institute, Bangalore (appellant of Excise Appeal No. 51663 of 2021) and GVK Emergency Management and Research Institute, Guwahati (appellant of Excise Appeal No. 51711 of 2021). These five appeals have, accordingly, been filed. 5. To appreciate the contentions that have been advanced by Shri S.A. Gundecha, learned counsel of Force Motors and Shri Pankaj, Finance Head of GVK Research Institute as also Shri Rakesh Agarwal, learned authorized representative appearing for the department, it would be appropriate to briefly examine the show cause notice issued by the department, the reply submitted by the appellant and the order passed by the Commissioner. 6. The show cause notice, in brief, alleges that from the technical specifications contained in the tender it would be clear that GVK Research Institute invited tender for supply of incomplete ambulances having the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppression of facts, willful misstatement or fraud. The Notcee No. 1 also appears to have rendered themselves liable for penal action under Section 11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2002. Further, the Noticee No. 2, 3, 4 and 5 abetted in short payment of duty by Noticee No. 1 in fraudulent manner by giving Purchase Orders in the name of Delivery Vans and therefore, the Noticee No. 2, 3, 4 and 5 also appear liable for penalty under Rule 26 of the Central Excise Rules, 2002. (emphasis supplied) 7. The appellant filed a reply to the show cause notice pointing out that the status of the vehicles at the time of clearance determines the classification of goods and what was actually supplied by Force Motors were delivery van vehicles. The appellant, therefore, submitted that merely because such delivery vans were converted into ambulances by GVK Research Institute would not mean that they were required to be classified as ambulances. Learned counsel also pointed out that whenever customers placed order for procurement of traveler ambulances they were classified as ambulances. The appellant also contended that the extended period of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Customer, and accordingly the duty liability computed as per the provisions of Section 4, of the Act, was discharged by us, considering the provisions of the Central Excise Rules, 2002. The monthly returns filed for the respective months, disclose the invoice numbers. xxxxxxxxxxx 23. The Customer and other customers of our, placed specific order for procurement of Traveller Ambulances, from us, e.g. Tamil Nadu Medical Services Corporation Limited, Chennai, floated tenders for procurement of ambulances having the technical specifications, of Ambulances, with all internal fittings such as Hooks for intravenous bottles, Brackets for oxygen cylinders with adjustable straps, factory made stretcher, seats, Medicine box. Annexed hereto and marked as Annexure 37 is a copy of one of such tender. We submitted the bid and accordingly received the Purchase Orders for supply of Traveller Ambulances from these two entities. xxxxxxxxx. 27. Thus, it would be kindly observed from the above documentation that two different models of Traveller type of vehicles, were sold by us, to the Customer, either as Delivery Van or as Ambulance, depending on the technical specification, Purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to 5 as ambulances and thereafter used as ambulances by the customers. xxxxxxxxx Thus, I find that those vehicles manufactured and supplied by Noticee No. 1 were incomplete or unfinished vehicle having the essential characters of complete or finished ambulance and it was also known to Noticee No. 1 at the time of clearance of the said vehicles that the same were going to be used as ambulances. xxxxxxxxx 9.3. In this regard, I find that Rule 2(a) of the Interpretative Rule of the First Schedule to the Central Excise Tariff Act, 1985 makes it clear that any reference to an article under any heading shall be taken to include a reference to that article unfinished or incomplete provided the same has attained the essential character of the complete or finished article. 11. I also find that the Noticee No 1 had knowingly delivery van in their invoices with sole intention to pay lesser rate of duty, the duty owingly which was appropriately payable on that and the Noticee No: 2 to 5 had willfully facilitated them in the same. It is observed that the goods manufactured and supplied by Noticee No. 1 to Noticee No.2 to 5 were having the essential characters of the complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inder in patient compartment. Learned counsel also pointed out that even after the fabrication work, the vans did not become full-fledged ambulance because after receipt of the vans from the fabricators they are equipped with ventilator, defibrillators, pluse oxymeters, stretchers, wheel chairs, etc., to make them full-fledged ambulances. Learned counsel also pointed out that it is thereafter that the vehicles were registered with the Regional Transport Authority as ambulances. 10. Thus, according to the learned counsel, GVK Research Institute had placed order on Force Motors for delivery vans and not for ambulances. The vans which are supplied by Force Motors to GVK Research Institute did not have the fittings necessary to treat them even as incomplete ambulances, much less a complete ambulances. According to learned counsel for the appellant, the goods have to be assessed in the form in which they are presented at the time of clearance and not as what they may ultimately become after going through various processes. Under rule 2(a) of the General Rules for Interpretation, the goods should have the essential character of complete/finished articles, but in the present case what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 14. In the year 2009, four institutions namely, Emergency Management Research Institute, Guwahati, Assam, Emergency Management Research Institute, Bangalore, Karnataka, GVK Emergency Management Research Institute, Dehradun, Uttarakhand and GVK Emergency Management Research Institute, Bhopal, Madhya Pradesh, floated tenders to procure vehicles of a certain type. The bid of the Force Motors was accepted and the aforesaid four customers placed orders for supply of Traveller Delivery Vans. 15. Based on these order, Force Motors supplied 212 vehicles to the aforesaid institutions between October 2009 to July 2010 and it is as follows: Sr. No. Name of the Institution Number of vehicles supplied (a) Emergency Management Research Institute, Guwahati 5 (b) Emergency Management Research Institute, Bangalore 144 (c) GVK Emergency Management Research Institute, Dehradun 18 (d) Emergency Management Research Institute, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the tender documents floated by GVK Research Institute and the purchase order for the procurement of the OEM integral vans. 21. It would, therefore, be useful to reproduce the relevant portions of the tender document which are as follows: TENDER NOTIFICATION Sealed tenders are invited by Emergency Management and Research Institute (EMRI) from reputed Manufacturers / Suppliers with authorization from original manufactures has to be enclosed for supply of the items mentioned below. OEM INTEGRAL VANS. (For construction of Ambulances) 367 Nos. ***** Sale of Tender Form 28/1/2009 to 15/02/2009 Last Date Time for obtaining Tender Form 15/02/2009 up to 5:30 P.M. Pre-Bid meeting at EMRI Bangalore 03/2/2009 at 11 A.M. Last date Time for submission of Tenders: 16/02/2009 up to 10 A.M. Opening of Tenders 16/02/2009 at 10:30 A.M. TENDER DOCUMENT FOR ORIGINAL EQUIPMENT MANUFACTURER (OEM) INTEGRAL VANS QUANTITY 367NOS. General Terms and Conditions for supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Turing Circle Radius Not More than Chassis/Body OEM Standard 6.5 m Steering Ordinary Mechanical Steering Patient Compartment The patient compartment must have all six sides, one partition, two side walls and one rear wall (doors) and roof and floor and should not be accessible to dust and water (rain or road splashes) with all doors and windows closed. The patient compartment will have all six sides, one partition, two side wall and one rear wall (doors) and roof and floor and it will not be accessible to dust and water (Rain or road splashes) with all doors and windows closed. ***** ***** ***** Doors Dual hinged doors for easy entry and exit of paramedic/Ambulance stretcher, with 270 degree open out at the rear (positively securable in fully open condition of 270 degrees) with glass view panels. The doors would be completed in all respects including trimmings. Dual hinged doors with 270 degree open out at the rear with gl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice encloses purchase orders issued for delivery of 212 Traveller Delivery Vans. 24. It needs to be noted that the effective rate of central excise duty on Traveller Van is lesser then Traveller Ambulance Van and it is for this reason that the department alleges that Force Motors with an intent to evade payment of duty connived with GVK Research Institute and mis-classified the vehicles as Traveller Delivery vans instead of ambulance vans. 25. The tender document and the price schedule clearly mention that the OEM integral vans are meant for construction of ambulances‟. They do not mention that they are meant for ambulances‟. It would also be seen from the specification contained in the tender and the specification offered by Force Motors that the manufacturer would have to take a modular approach suitable for air conditioned ambulances with stretcher cum trolley. The finished version will have adequate space in the patient cabin, where apart from positioning of the patient in a comfortable position, a number of medical and communication equipments would also have to be fixed besides the patient. It also required that patient cabin to have enough sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Force Traveller Van No. 3350 mm WB into Emergency Response Van have been enclosed. 29. It is seen that after the vehicles are received from Force Motors, at the instance of Emergency Management Research Institute, the fabricators convert the delivery vans into ambulances by fitting them with a stretcher, attendant seats, wailing horn, medical cabinets, fans, hooks for intravenous bottle and oxygen cylinder in the patient compartment. Even after the fabricators fit the above requirements, the delivery vans do not become full-fledged ambulances because after the said vans are received from the fabricators, the vans are equipped with ventilator, defibrillators, pulse oxymeters, stretchers, wheel chairs etc., to make them into full-fledged ambulances. These vehicles are then registered with the Regional Transportation Authority as Ambulances. 30. The goods have to be assessed in the form in which they are presented at the time of clearance and not what they may ultimately become after going through various processes. In order to invoke rule 2(a) of the General Rules of Interpretation, the goods should have the essential character of complete/finished articles. What was p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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