Motor vehicle classification turns on common parlance: body-building on supplied chassis is not manufacture of complete motor vehicles.

Fabricating and mounting bus or truck bodies on chassis supplied by customers does not amount to manufacture of complete motor vehicles in common parlance or functional classification. The activity remains manufacture of bodies of motor vehicles classifiable under Heading 87.07, not motor vehicles under Headings 87.02 or 87.04. Because the goods fall outside the motor-vehicle entries covered by the exemption carve-out, the units are not liable to excise duty on motor vehicles and do not require a licence as manufacturers of motor vehicles. The distinction between bodies built separately and bodies mounted on supplied chassis was rejected as immaterial.

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Issues: Whether persons engaged in building or fabricating bodies for buses and trucks on chassis supplied by customers manufacture motor vehicles, and are therefore liable to excise duty and to obtain a licence, or whether they manufacture only bodies of motor vehicles falling under Heading No. 87.07 and entitled to exemption.

Analysis: The bodies built by the petitioners were not separately marketed as motor vehicles and the petitioners were small-scale units undertaking only body-building on chassis supplied by customers. Applying the common parlance and functional character tests, the identity of the article depended on how traders and consumers understood it, and a body fitted on a chassis did not become a complete motor vehicle. The heading for bodies of motor vehicles remained a separate entry, and the exemption notification excluded motor vehicles under Headings 87.02 and 87.04 while leaving Heading 87.07 outside the duty net. The Court also rejected the distinction between bodies built separately and bodies built on chassis, holding that the nature of the body did not change merely because it was fixed on a chassis.

Conclusion: The petitioners do not manufacture motor vehicles; they manufacture only bodies of motor vehicles falling under Heading No. 87.07, and they are not liable to excise duty or to take a licence under the Act.

Ratio Decidendi: Where a small-scale unit fabricates and mounts bodies on chassis supplied by customers, the activity is not manufacture of a complete motor vehicle in common parlance and the goods remain classifiable as bodies of motor vehicles rather than motor vehicles themselves.

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