Revenue loses appeal on Tata-207 Vajra riot control vehicle classification under CETH 8705 special purpose vehicles

CESTAT Chandigarh dismissed Revenue's appeal regarding classification of Tata-207 Vajra Vahan riot control vehicle. The vehicle was classified under CETH 8705 as a special purpose vehicle rather than CETH 8703 for passenger transport vehicles. The Tribunal held that despite carrying police personnel, the vehicle's primary purpose was riot control with specialized equipment and design certified by VRDE and Transport Commissioner. The body-builder's right to change classification from earlier CETH 8707 was upheld, noting no estoppel exists in revenue matters and parties may correct past classification errors.

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Issues involved:
Classification of Vajra Vahan-207 under Central Excise Tariff Headings (CETH) 8703 3392 or 8705 9000.

Classification under CETH 8705:
- The Vajra Vahan is specially designed for non-transport functions like riot control and fighting terrorism.
- Fitted with various equipment for specific functions, classified as a special purpose motor vehicle.
- Supported by HSN explanatory notes and previous case laws for classification under CETH 8705.
- Transport authorities' registration and expert opinions considered for classification.
- Heading 8705 covers vehicles with non-transport functions, not primarily for passenger or goods transport.
- Upheld the Commissioner's decision on classification under CETH 8705, eligible for exemption under Notification No.06/2006-CE.

Argument for Classification under CETH 8703:
- Revenue argues Vajra Vahan should be classified under CETH 8703 3392, along with ambulances, based on ejusdem generis principle.
- Contention that Vajra Vahan is not a special vehicle and akin to vans used for transporting prisoners or ambulances.
- Department's stance that the vehicle is primarily designed for transporting persons, not for specific non-transport functions.

Decision and Rationale:
- The Vajra Vahan is a special purpose vehicle principally designed for riot control, supported by VRDE and DRDO certifications.
- Certification by VRDE and Transport Commissioner considered in line with the Motor Vehicles Act for classification.
- No evidence presented to challenge the validity of certifications or the classification as a special purpose vehicle.
- Previous classification under a different heading not a bar to changing classification to avail benefits.
- Upheld the Commissioner's classification under CETH 8705, dismissing the appeal for lack of merit.

Judgment Date:
Pronounced on 08/11/2023.

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