Commercial parlance test in tariff classification: fabricating bus bodies on chassis is not manufacture of complete motor vehicles.

Fabrication of bus and truck bodies on chassis supplied by customers is treated as a distinct tax classification issue under the tariff scheme. Applying the commercial parlance and common parlance test, the Court noted that chassis, complete motor vehicles, and bodies for motor vehicles are separately recognised, and that a body built on an existing chassis is only an intermediate stage, not manufacture of a complete motor vehicle. The activity therefore falls under Heading 87.07 as bodies for motor vehicles, and the statutory scheme cannot be stretched to classify it as manufacture of motor vehicles under Headings 87.02 or 87.04.

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Issues: Whether the fabrication or building of bus and truck bodies on chassis supplied by customers amounts to manufacture of motor vehicles classifiable under Heading Nos. 87.02 and 87.04, or whether such activity falls under Heading No. 87.07 as bodies for motor vehicles.

Analysis: The relevant tariff scheme separately classified chassis, motor vehicles, and bodies for motor vehicles, and the exemption notification also treated Heading No. 87.07 goods as distinct. The Court applied the commercial parlance and common parlance approach in tax classification, holding that the character of the article is determined by how it is understood in trade and by consumers. Building a body on an existing chassis was found to be only one stage in the process and not manufacture of the complete motor vehicle. The Court also held that a taxing entry cannot be expanded by reasoning to shift a specifically described item into another entry, especially where the statute and notifications show that bodies are independently taxed or exempted as bodies and not as complete vehicles.

Conclusion: Building or fabricating bodies on chassis does not amount to manufacture of motor vehicles. The activity falls under Heading No. 87.07 and the assessees are not liable as manufacturers of motor vehicles.

Ratio Decidendi: In classification under a taxing tariff, an article must be identified according to its commercial and trade understanding, and a component or intermediate process cannot be treated as manufacture of the complete end-product unless the statute expressly so provides.

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