2018 (4) TMI 1315 - AT - Central Excise

Tribunal Classifies Mahindra Bolero Camper as Goods Vehicle

Mahindra & Mahindra Ltd Versus CCCE & ST, Hyderabad-I

The Tribunal classified the 'Mahindra Bolero Camper' under CETH 8704 as a vehicle for transporting goods, rejecting the classification under CETH 8703 for ... Classification of goods - Mahindra Bolero Camper and its variants - appellants informed the jurisdictional Central Excise authorities that they intend to classify the said “Bolero Camper” as motor vehicle for transportation of goods under CETH classification 8704.21.90, w.e.f. 01.07.2008 - Department took the view that the impugned motor vehicle is not primarily meant for carrying loads but for transporting persons and hence would merit classification under CETH 8703 only - whether the goods classifiable under CETH 8704 or under CETH 8703? Held that: - the test laid down in the earlier Tribunal decision in their own case in CCE, Pune-I Vs. Telco Ltd. [2002 (2) TMI 717 - CEGAT, MUMBAI], that a motor vehicle would be classifiable under 8703 or 8704, depending on how the gross vehicle weight in design of the vehicle was distributed and whether the major portion of it was used for transportation of passengers or for transportation of goods, is still the settled yardstick to be applied in such a controversy - On the basis of the details submitted by appellants, the above test when applied to various variants of the impugned vehicle clearly indicate that in these vehicles of the appellant the load carrying capacity is more than passenger capacity. Evidently, these vehicles then cannot be alleged to be vehicles “principally designed for the transport of persons” which is a sine qua non for meriting classification under Tariff heading 87.03. For a motor vehicle to find a fit in Heading 8703, will necessarily have only a single enclosed interior space, have rear windows along two side panels, have sliding, swing out or lift up doors, with windows, on the side panels or in the rear and more importantly, will not have any permanent panel or barrier between the area for the driver and front passengers and the rear area to enable it being used for transport of both persons and goods. Moreover, as per HSN, to find place in 8703, there should be presence of comfort features and interior finish throughout the vehicle interior - the impugned vehicle namely “Mahindra Camper” and its variants by no such imagination can be said to be satisfying these requirements. Hence, even by applying the conditionalties attendant to HSN notes in Heading 8703, we find that the impugned vehicle will not merit classification under 8703. Revenue have made another contention that by common parlance, the vehicle is only known as a “passenger vehicle”. But, other than making such an assertion, no evidence has been brought forth to prove that the impugned vehicle is used predominantly for transport of passengers and not of goods. Appeal allowed - decided in favor of appellant. Issues Involved:1. Classification of 'Mahindra Bolero Camper' under Central Excise Tariff Heading (CETH) 8703 or 8704.2. Determination of differential duty liabilities and penalties.Issue-wise Detailed Analysis:1. Classification of 'Mahindra Bolero Camper':The core issue is whether the 'Mahindra Bolero Camper' should be classified under CETH 8703 as a vehicle for transporting persons or under CETH 8704 as a vehicle for transporting goods.- Appellant's Argument:- The vehicle has a crew cab in the front and an open load body portion at the rear, making it a hybrid vehicle for carrying both persons and goods.- For a vehicle to fall under Heading 87.03, it must be principally designed for the transport of persons. However, for it to fall under Heading 87.04, it need not be principally designed for the transport of goods.- The vehicle's load carrying capacity for goods is more than that for persons, indicating it is not principally designed for transporting persons.- The Tribunal's decision in CCE Vs. Telco Ltd. (2002) supports this classification, as similar vehicles were classified under Heading 87.04.- The Automotive Research Association of India (ARAI) and Vehicle Research & Development Establishment (VRDE) categorized the vehicle as a 'Goods Vehicle,' and the vehicle is registered as such by the Regional Transport Authority.- Respondent's Argument:- The product catalog and brochures highlight passenger comfort features, indicating the vehicle is designed for passenger use.- The vehicle's space for transporting passengers is more significant than the cargo space, suggesting it should be classified under Heading 87.03.- The classification should consider the vehicle's volume and facilities for passengers, not just the weight carrying capacity.- The inclusion of 'station wagons' in Heading 87.03 after the 2000 Budget and the introduction of Chapter Note 6 supports the classification under Heading 87.03.Tribunal's Findings:- The Tribunal referred to its earlier decision in CCE, Pune-I Vs. Telco Ltd., which classified similar vehicles under Heading 8704 based on their load carrying capacity.- The Tribunal noted that the vehicle's load carrying capacity for goods is more than that for passengers, indicating it is not principally designed for transporting persons.- The Tribunal found no material difference between the Chapter Note 6 in the Central Excise Tariff and the corresponding HSN Note, dismissing the respondent's argument.- The vehicle's registration as a 'Goods Vehicle' by the RTO authorities supports the classification under Heading 8704.- The Tribunal concluded that the vehicle is primarily designed for transporting goods and not persons, thus falling under Heading 8704.2. Determination of Differential Duty Liabilities and Penalties:- Appellant's Position:- The classification under Heading 8704 would result in lower differential duty liabilities.- The penalties imposed in some of the show cause notices should be reconsidered based on the correct classification.- Tribunal's Decision:- The Tribunal set aside the impugned orders, which had confirmed the classification under Heading 8703 and imposed differential duty liabilities and penalties.- The appeals were allowed with consequential benefits as per law.Conclusion:The Tribunal held that the 'Mahindra Bolero Camper' and its variants are to be classified under CETH 8704 as vehicles for transporting goods. The impugned orders were set aside, and the appeals were allowed with consequential benefits.