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TMI Blog1989 (12) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... bodies of trucks and buses. The chassis on which the bodies are built are supplied by the customers. The respondents are owners of small scale units for fabricating or building bodies for trucks and buses. They are not holding any licence for manufacture of motor vehicles. The annual turnover of theirs is not more than Rupees ten lacs in any way. They do not sell any motor vehicle. They charge the price of the body built by them either of the bus or of the truck. 3. It is not disputed that there are large number of such units in the State. The Central Excises and Salt Act, 1944 (Act 1 of 1944) prescribes various rates as specified in the Schedule chargeable as the excise duty. It is provided under the said Schedule as follows: Heading No. Sub-heading No. Description of goods Rate of duty 87.01 8701.00 Tractors (other than tractors of heading No. 87.09) 15% 87.02 8702.00 Public transport type passenger motor vehicles. 25% 87.03 8703.00 Motor ears and other motor vehicles principally designed for transport of persons (other than those of heading No. 87.02), including station wagons and racing cars. 5% plus Rs. 16,500 per car or vehicle as in- the case may be. 87. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Range, Moga that by virtue of Notification, dated April 24, 1986 the respondents, i.e. the body builders of trucks and buses were liable to pay the excise duty and a similar letter was written on September 16, 1987 that since they were manufacturing bodies for trucks and buses resulting in the manufacture of motor vehicles as envisaged by the Schedule and they were not having a proper licence, action would be taken against them for the lapse. The above duty was levied by the Central Government in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) by issuing Notification No. 162/86-Central Excise, dated March 1,1986. It was notified that the manufacturers of public transport type passenger motor vehicles covered by Heading No. 87.02 or 87.04 of the Schedule were liable to pay the excise duty at the rate of Rs. 8,000/- per motor vehicle and the manufacturers of motor vehicles for transport of goods were liable to pay excise duty at the rate of Rs. 4,000/- per motor vehicle. 5. The respondents challenged the levy of the excise duty and contended that Notification No. 162/86-Central Excise, dated March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the class or section of people dealing with or using the products. The words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted. Applying these tests, the bodies built/fabricated by the respondents on the chassis supplied by the customers cannot be termed to be motor vehicle. 8. The respondents just build a part of the motor vehicle and the part cannot be equated with the whole. It was further observed that if the process of manufacturing the body on the chassis had culminated in the manufacture of a complete and whole motor vehicle, then entry 87.07 in the Schedule would become redundent. The distinction admitted to have been drawn by the appellants to the effect that bodies independently built without the chassis and then mounted on the chassis, will not make any difference with the one built on the chassis itself. Resultantly, the Writ Petition was allowed and it was held that the building of bodies or fabrication of the same on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at "when there is no reference to the use of adaptation of the article, the basis of end use for classification under a Tariff entry is absolutely irrelevant"; "It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the Trade and its popular meaning should commend itself to the authority"; and "The meaning given to articles in a fiscal statute must be as people in the trade and commerce conversant with the subject generally treat and understand them in the usual course. But, once an article is classified and put up in a distinct entry, the basis of classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, there is no difficulty for statutory classification under a particular entry." 13. It was observed in Synthetics & Chemicals Ltd. etc. etc. case (supra) that having regard to the principles of interpretation and the constitutional provisions, in the light of the language used and having considered the impost and the composition of industrial alcohol, and the legislative pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of complete motor vehicle. It may be a link in the whole process and the Legislature has taxed it as an independent item. It is not unknown that in order to encourage subsidiary industries and the small scale units, the Legislature thinks it proper to exempt such industries or units from the excise duty. However, they still kept the impost if the body is built as part of the integral process of manufacturing the vehicle. It is not disputed that in the trade body building is taken as an independent item and building of it is not understood as manufacturing of a motor vehicle. No body builder has ever been described to be a manufacturer of motor vehicle. It does not appeal to the reason that merely body being built on the chassis will deprive it of its character as a body of the motor vehicle. It would still continue to partake the colour and name of the article known in the trade, i.e. body building. It is in the eyes of those who are dealing with the commodity and in commercial parlance that the body is treated as distinctive character and identity from the end-product. The interpretation put forward by the appellants would lead to an illogical result. There is no reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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