Common parlance test for tariff classification upheld: Maruti Van treated as saloon car, and limitation barred the demand.

Where an undefined tariff or notification term is construed, its meaning is determined by common parlance, trade understanding and contemporaneous practical recognition; on that basis, a Maruti Van was treated as a saloon car for the benefit under Notification No. 20/84-C.E. The document also states that extended limitation could not be invoked because suppression or mis-statement was not proved, particularly where the department acknowledged a genuine doubt about eligibility. As the notice was issued beyond six months from the relevant clearances, the demand was held time-barred. The assessee succeeded on both classification and limitation.

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Issues: (i) Whether a Maruti Van could be treated as a saloon car for the purposes of Notification No. 20/84-C.E. dated 1-3-1984. (ii) Whether the demand was barred by limitation.

Issue (i): Whether a Maruti Van could be treated as a saloon car for the purposes of Notification No. 20/84-C.E. dated 1-3-1984.

Analysis: The expression "saloon car" was not defined in the notification or tariff. The vehicle's character had therefore to be determined on the basis of ordinary meaning, trade understanding, and the surrounding evidence. The dictionary meanings showed that a saloon car is a closed motor car without partition behind the driver, while a van is ordinarily a covered vehicle used for carriage of goods. The affidavits filed by persons dealing with Maruti vehicles supported the assessee's stand and were not challenged by cross-examination. The registration particulars also described the body type as "saloon". The explanatory material relied upon further supported the view that a closed vehicle intended for passengers falls within the concept of a saloon car.

Conclusion: A Maruti Van was held to be a saloon car for the purposes of Notification No. 20/84-C.E., and the assessee succeeded on merits.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The show cause notice was issued after the clearances in question, and the adjudicating order itself recorded that there could have been a genuine doubt regarding eligibility for concession. In those circumstances, suppression or mis-statement was not established so as to justify the extended period of limitation. The notice having been issued beyond six months from the relevant clearances, the demand was time-barred.

Conclusion: The demand was held to be barred by limitation, and the assessee succeeded on the question of time-bar as well.

Final Conclusion: The appeal was allowed, with the assessee succeeding both on classification and on limitation.

Ratio Decidendi: Where a tariff or notification expression is undefined, its meaning is determined by common parlance, trade understanding, and contemporaneous practical recognition; and an extended limitation period cannot be invoked in the absence of proved suppression or mis-statement, especially where the department itself recognises genuine doubt.

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