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of <h1>Tribunal classifies Go-Karts under chapter 8703, overturns penalties.</h1> The Tribunal concluded that Go-Karts are classifiable under chapter heading 8703, consistent with previous judgments. The impugned order was set aside, ... Demand of duty of manufacturing of go-kart and parts thereof - classifiable under chapter sub-heading number 8703.90 or not - respondent / manufacturer contended that the product would be under chapter sub-heading number 95.08 as Fairground amusements - Held that:- It is undisputed that the go-kart manufactured by the respondent assessee is used for racing in go-kart racing - 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 - Decision of larger bench in the case of Leisureland Pvt. Ltd [1994 (1) TMI 152 - CEGAT, NEW DELHI] followed. Demand of duty confirmed - However, since the issue is of interpretation and classification of the products, penalties imposed on the appellant waived - Decided in favor of revenue. Issues Involved:1. Classification of Go-Karts2. Applicability of Expert Opinions3. Comparison with Previous Judgments (Leisureland Pvt. Ltd. and Nishiland Park Ltd.)4. Limitation and Bona Fide Belief5. SSI Exemption and Tax InclusionIssue-wise Detailed Analysis:1. Classification of Go-Karts:The primary dispute is the correct classification of Go-Karts manufactured by the respondent. The revenue argues that Go-Karts should be classified under chapter heading 8703 as 'motor cars and other motor vehicles principally designed for the transport of not more than six persons.' The respondent contends that Go-Karts should be classified under chapter heading 9508 as 'fairground amusements.' The respondent supports their claim by stating that Go-Karts are used solely on specialized tracks in amusement parks and are designed for recreational purposes, not for transportation.2. Applicability of Expert Opinions:The respondent provided expert opinions to support their classification under chapter heading 9508. Experts from TVS Motor Company Ltd., Auto Motor & Sport magazine, Auto India magazine, and ARAI stated that Go-Karts are designed for recreation and not for transportation. The Tribunal emphasized that assessing authorities must consider expert opinions, as established in previous cases like M/s Ahuja Radiosm v/s Collector of Customs and M/s Wipro Ltd V/s Commissioner of Customs.3. Comparison with Previous Judgments (Leisureland Pvt. Ltd. and Nishiland Park Ltd.):The revenue cited previous judgments, specifically Leisureland Pvt. Ltd. and Nishiland Park Ltd., where Go-Karts were classified under heading 8703. The Tribunal in these cases concluded that Go-Karts are mechanically propelled vehicles designed for the transport of persons, even if used on private roads or for amusement. The respondent argued that the facts in the present case differ, as their Go-Karts are used solely for amusement and are supported by expert opinions. However, the Tribunal found the previous judgments applicable, noting that Go-Karts in these cases had similar specifications and purposes.4. Limitation and Bona Fide Belief:The respondent claimed that the demand is barred by limitation as they were under a bona fide belief that Go-Karts were not liable for duty under heading 8703. This belief was based on the Customs department classifying imported Go-Karts under heading 9508. The Tribunal did not find sufficient grounds to accept this argument, as the classification under heading 8703 had been judicially settled.5. SSI Exemption and Tax Inclusion:The respondent argued that various parts manufactured and cleared by them fall under headings eligible for SSI exemption and that their total clearance value was below the exemption limit. They also contended that the price of Go-Karts included all taxes, and thus, taxes and duties should be abated from the price. The Tribunal did not address these points in detail, as the primary issue was the classification of Go-Karts.Conclusion:The Tribunal concluded that Go-Karts are classifiable under chapter heading 8703, consistent with previous judgments in Leisureland Pvt. Ltd. and Nishiland Park Ltd. The impugned order was set aside, and the adjudicating authority's order was restored. However, penalties imposed on the respondent were set aside due to the interpretative nature of the classification issue. The appeal was allowed, and the judgment was pronounced on 21.06.2016.
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