TaxTMI 
TaxTMI 
2009 (12) TMI 131
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....ssification under Heading 8702 of the Schedule to the Central Excise Tariff Act, 1985. The department's contention is that the vehicle is classifiable under Heading 8703. For the period prior to 28-2-1992, the tariff headings are as follows: Heading: 8702: Public Transport Type Passenger Motor Vehicle Heading: 8703: Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading No. 87.02) including station wagons and racing cars. Chapter Note 3 to Chapter 87 read as under: "For the purpose of heading Nos. 8702 the expression 'public transport type passenger motor vehicles' means vehicles designed for the transport of ten persons or more including the driver". By the Finance Act, 1992, the Heading 8702 with effect from 1-3-1992 read as under: "Motor Vehicles for the transport of ten or more persons including the driver." 4. In July, 1991 the appellants commenced manufacture of motor vehicle Commander 750 DP (10 seater) and submitted classification list No. 1/91 dated 25-7-1991 classifying the vehicle under Heading 8702. As required under Rule 126 of the Central Motor Vehicles Rules, 1989 the appellants offered a prototype of....
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....charged the show cause notice. The Collector accepted the contention of the appellants that the provisions of the Motor Vehicles Act were not relevant and could not be taken into consideration in interpreting the Heading under the Central Excise Tariff Act. The Commissioner also accepted the position that the only criterion was whether or not the vehicle was designed for the transport of ten persons or more after considering the relevant tariff headings and the chapter notes. 10. The appellants thereafter filed a further classification list No. 1/92-93 with effect from 1-3-92 in respect of Commander Vehicle. The classification list was once again approved by the Assistant Commissioner of Central Excise on 26-6-1992. 11. Being aggrieved by the said approval, the Department filed an appeal against the approval of the aforesaid classification list No. 1/92-93. The ground stated in the appeal filed by the department were that applying Rule 171 as also Rule 79(7), 82 and 84 of the Maharashtra Motor Vehicle Rules, 1989 (MMVR, 1989), the vehicle merited classification under Heading 8703 and not under 8702, as claimed by the assessee. 12. The Commissioner of Central Excise (Appeals) by ....
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....ed or manufactured, with such plant, machinery, materials or things should not be confiscated under Rule 173Q(2) of the Central Excise Rules, 1944. 15.The appellants, at their Nasik factory manufactured Commander 650 DI (10 seater) and filed classification list on 17-12-90 and 2-3-92 both of which were approved and there was no dispute. In respect of Commander 750 DP HT (11 seater and 10 seater vehicles) also classification lists filed on 26-8-91, 9-9-91 and 25-11-91 clarifying the vehicle under Heading 8702 were approved. In respect of both the Commander 650 DI and Commander 750 DP (HT) show cause notices similar to the ones issued in respect of the Kandivali facility were issued on 27-9-93 and 19-11-93. Differential duty demand in respect of Commander 650 DI was Rs.75,29,76,085/- and in respect of Commander 750 DP HT was Rs.19,53,78,560/-. As in the case of Kandivali facility here also periodical show cause notices were issued subsequently. Appellants made common written submission in respect of all the show cause notices. Since the issue involved is similar, all discussions subsequent to this would be in respect of Commander 750 DP HT. 16.The aforesaid demands were confirmed....
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....icle Commander 750 DP as "Omnibus under Non-Transport" category having a seating capacity of Ten (10) persons, when they were aware that such a category did not exist, so as to evade Central Excise Duty, and therefore, the proviso to Section 11A of the Central Excises and Salt Act, 1944 is applicable in the present case. (l) The appellants contravened the provisions of Rule 173B of the Central Excise Rules, 1944 inasmuch as they have not filed appropriate classification list for their product Mahindra Commander 750 DP (10 seater). (m) The appellants contravened the provisions of Rule 173F of the Central Excise Rules, 1944, inasmuch as they have not determined the correct duty liability on the said excisable goods and removed the same without payment of appropriate Central Excise duty. (n) The appellants contravened the provisions of Rule 173G read with Rule 52A of the Central Excise Rules, 1944, inasmuch as they have removed the excisable goods without payment of appropriate duty. 17. While there was no show cause notice for the period 24-11-1992 to 31-3-1993, for the period 1-4-1993 to 22-7-1996, the concerned Superintendent of Central Excise issued Show Cause Notices periodic....
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....he Hon'ble CESTAT referred to above are identical. In the appeal filed by the Department, the Department was seeking to dispute the classification of the vehicle only on the ground that the same did not comply with Rules 79, 82, 84 and 171 of the Maharashtra Motor Vehicle Rules. This is the identical cause of action adopted by the Department in the present case. The appeal (based on an identical basis) having being dismissed by the Hon'ble CESTAT, the issue stands concluded in favour of the applicants. Since the classification list pertaining to the very same period has attained finality in respect of the very same appellants, the same cannot be challenged in the subsequent proceedings until the order is reversed by higher judicial forum. 21. The impugned order has been passed in gross breach of principles of natural justice inasmuch as the Commissioner, after the personal hearing sought to elicit information from the Transport Commissioner and received some response which was not disclosed to the appellant. The relevant discussion is in para 32.6 which is reproduced herein below: "The TC also stated that there were no specifications laid down for governing seating capacity of No....
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....r)". 24. No evidence has been produced by the department that the vehicle is not a ten seater. 24.1 It is for the Department therefore to establish by evidence that the vehicle was not capable of carrying 10 persons, which is the ONLY relevant criterion under Central Excise Tariff. 24.2 The Department has not established anywhere in the show cause notice that the vehicle is not a 10 seater and in fact accepts that the same is a ten seater in earlier proceedings wherein it sought to demand duty on the basis that the vehicle was a non-transport category of vehicle. 24.3 It is submitted that the onus is on the Department to prove that the classification of the said vehicles ought to be under Heading 8703 and not Heading 8702 as claimed by the appellants. The Department does not dispute that the vehicle is not capable of seating ten persons or that it was not designed as a ten seater. What it seeks to do is to apply certain provisions contained in the MMVR (which do not apply to non-transport vehicles - which the Commander vehicles are approved for registration) and, therefore, seek to contend that the same are not 10 seaters. 25. As per commercial parlance test, Commander is a te....
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.... is in full compliance with the seating size regulations applicable in the Punjab Motor Vehicle Rules. Some of the States do not contain any provision relating to seating size. Hence, it is submitted that reference to State Rules would result in a state of confusion with regards to the classification. 28. The Central Excise Department cannot challenge certification by ARAI and Transport Commissioner. 28.1 It is submitted that the Department has engaged itself with the issue of whether or not the non-transport categorization given by the Transport Commissioner is accurate. It is submitted that this is an issue under the registration provisions of the Motor Vehicles Act/Rules and is solely within the domain of the Transport Commissioner. The issue of transport/non-transport is of no significance to classification under the Central Excise Tariff. As against the settled law, the entire basis of the Central Excise Department in the show cause notice and the impugned order seeks to go behind the categorization made by the Transport Commissioner, which is wholly without the authority of law in terms of the settled law. 28.2 It is submitted that the Excise Department is not competent to....
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.... through the Government has not challenged the actions of the Transport Commissioner nor has it ever held that what the TC did was wrong or erroneous. In fact it directed status quo to be maintained. 30. Transport Commissioner has reaffirmed his stand that the vehicle was 10 seater and continued to approve the vehicle as a 10 seater. 31. Allegation of suppression is unsustainable. 32. The Department cannot contend that the ARAI is not the competent authority to certify the seating capacity of the vehicle. 33. There are no circumstances which warrant invocation of penal provisions. The appellants submit that its conduct has been absolutely bona fide and the appellant cleared the motor vehicles on the basis of approved classification lists. Department's submissions: 34. The Counsel on behalf of the department submitted that he agreed that the Central Excise Tariff cannot be interpreted by reference to the MVA. However, for determining classification, the Excise Department needs some guidance and can therefore, reach out to principles under the MVA, since it is an Act in pari materia. 35. The Appellant did not produce the relevant documents including the blue prints before the ....
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.... been designed for this purpose. 42. The next question that arises is how should the Assessing Officer examine this aspect? Can he do this by requiring the assessee to transport or fill up the vehicle with 10 persons including the driver and come to the conclusion that the vehicle has been designed for 10 persons? Obviously, the answer would be "NO". Since the Assessing Officer cannot be said to be having the expertise which is required to consider this aspect. Further, there are so many variables when 10 persons are loaded in the vehicle. The actual number of persons that can travel in a vehicle is not really relevant for the purpose of deciding whether a vehicle has been designed to carry that many persons. It is usual to find that a large number of people (much more than the capacity of the vehicle certified) travelling in vehicles in India. A bus, which is supposed to carry 50 persons often, carries more than 100 persons in this country. The cars, which are designed to carry 5 or 6 persons, carrying more than 10 persons are not rare to be seen. Therefore, as a lay man an Assessing Officer cannot decide whether a vehicle has been designed to carry 10 persons. In such a situatio....
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....level of uniformity can be achieved and certain uniform standard are followed in the country. Once a vehicle is certified by ARAI or VRDE as the vehicle designed for the transport of 10 persons or more including the driver, the classification claim has to be accepted and approved. But if no such expert, concurrence is available or if they have not certified the requirement of the tariff heading as is the case, assessing officer has to consider whether he can decide the seating capacity himself or he needs expert assistance. If provisions of law are simple and do not need expertise, assessing officer himself can decide whether vehicle fulfils the condition. 43.In this background, it is necessary to examine the chronological events in this case, which have led to the dispute before us. July, 1991 - The company commenced manufacture of a ten seater motor vehicle Commander 750 DP and submitted CL No. 1/91, dated 25-7-1991 classifying the vehicle under CHN 8702; that the vehicle was tested and certified by the ARAI as a ten seater vehicle; the State Transport Commissioners of Gujarat, Maharashtra classified the vehicle as an omnibus in the non-transport category capable of carrying 10....
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....s the arguments were advanced and chronological history of the dispute was given and details were mentioned, we felt that the issue has already attained finality with the decision of the Tribunal dated 19-7-2005 and it would not be appropriate on our part to hear this case. 44.1The ld. Advocate also submitted that while granting unconditional stay to the appellants, this Tribunal had observed that since the classification list pertaining to very same period has attained finality in respect of the very same appellants, the same cannot be challenged in the subsequent proceedings until the order is reversed by the higher judicial forum. It was also pointed out that the Tribunal also observed that the vehicles manufactured by the appellants would merit classification under CETA Heading 8702 and the provisions of Maharashtra Motor Vehicle Rules are not relevant for the purpose of determination of classification of the vehicle. 44.2 We immediately asked the Counsel for the Revenue as to why should we not dispose of the appeal on the basis of these submissions alone, since we felt that if we proceed to decide the issue, it may amount to review of the order of this Tribunal. The ld. Advo....
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....question of dependence on any said laws for determination of tariff heading. In terms of the commercial parlance test declared by the Hon'ble Supreme Court, for determining the classification, the fact that the vehicle is bought and sold as a 10 seater is determinative of classification and no further guidance is required. The CBEC itself has clarified that ARAI certificate/Transport Commissioner's certificate will be definitive and, therefore, the Commissioner should have gone only by those certificates. 45.4 The ld. Advocate for the Revenue submitted that the very starting sentence of para 4 "Inasmuch as there is no dispute that the vehicle under consideration is meant for transport of 10 persons or more, the same would get specifically covered by Heading 8702" would make this decision (dated 19-7-2005) inapplicable to the facts of the present case. According to him the whole dispute before the Tribunal was whether the vehicle under consideration was designed for transport of 10 persons or more. The Tribunal went on to observe that the Heading 8702 covers motor vehicles designed for the transport of 10 persons or more without making any distinction about the use of the same as p....
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....cle" with vehicles registered by Registration Authorities as a Public Transport. This is not a correct understanding of the entry. There is no requirement stipulated under the exemption notification that the vehicles, in order to become eligible for the exemption should be registered as public transport. Such a requirement cannot be read into the notification particularly so, since the exemption is for "public transport type passenger vehicle" (emphasis added) and not to "public transport passenger vehicles" registered as public transport. The equating of the two amounts to reading the exemption notification excluding the word "type". For the purpose of the exemption it is sufficient that the motor vehicle is of the prescribed "type"; it does not have to be. Words are not to be supplied to or taken out of statutes while interpreting them. Therefore, the interpretation placed by the Commissioner is not correct. The Commissioner also rejected the appellant's submission that the change in the wording of Tariff Item 8702 in the Budget for 1992-93 had no revenue effect by stating that it is not for the quasi-judicial authorities to ascertain the intention of the legislation and to inter....
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....visions of MV Act and Rules. 46.4 Further, as rightly pointed out by the Ld. Advocate for the Revenue, the observation that there is no dispute that the vehicle is meant for transport of 10 persons led to the conclusion in favour of the appellants, whereas the very starting paragraph of the ground of appeal stated that the vehicle was actually not a 10 seater. The relevant paragraph is reproduced below:- "The Commissioner (Appeals) in his impugned order had failed to appreciate that M/s. Mahindra & Mahindra Ltd., had wrongly classified their motor vehicle under chapter heading 87.02 by declaring the motor vehicle as ten seaters. The vehicles were actually not ten seaters as they did not satisfy the conditions for such vehicles laid down under the provision of MMVA, 1988. To decide whether a vehicle could be classified as are with a capacity in carry 10 persons or more, the provisions of the Motor Vehicles Act relating to the seating capacity as well as weight loading capacity cannot be totally ignored and in absence of any statutory provisions under the C.Ex. Act, the provisions of other Act/Rules could be followed". 46.5 We have already observed earlier that if it is left to th....
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....ifying the capacity. As regards the authority of ARAI to certify seating capacity we shall revert to you shortly". Subsequently, they clarified that they were not required to certify the seating capacity to Transport Commissioner." 46.7 On the other hand, the Transport Commissioner says that since they classified the vehicle of a non-transport vehicle, the compliance with the norms for seating capacity actually meant for public and private services vehicles has not been rigorously verified. He also says that in the blue prints available on the records of assessing officer it is possible that the seating capacity would fall slightly short of the one assigned presently, if it were to be approved as a transport vehicle. Thus, the both ARAI and the Transport Commissioner do not specifically say that the vehicle is designed for carrying 10 persons. Both of them in fact say that they were not required to verify this aspect. The Transport Commissioner was not required to do so, since he had classified the vehicle as a non-transport vehicle and the ARAI was also not required to verify since he was not required to verify this as per Rules. 46.8 Ld. Advocate for the Revenue took us through....
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....gn, the question is not of quantum of difference between the standard and the actual unless the standard itself provides for difference between the standard and actual. Admittedly, the seating requirements for seating capacity under Rule 171 of MMVR prescribed the minimum length required. Therefore, the fact that the length of the seat was marginally lower would not help the appellants at all unless such margin is provided by law and is acceptable. In this case, the appellants themselves found seats as per design could not be fitted into the vehicle and if the same could be fitted there would have been no problem whatsoever. From the above discussion what emerges is that the appellants proceeded to design a vehicle for transporting 10 persons by making modification in one of their existing model and fell marginally short and subsequently proceeded to manufacture the vehicle anyway and released it to the market. If they were to reveal that these vehicles could not be classified as a public transport type vehicle, the classification list as proposed would not have been proved. It has to be noted that the classification list No. 1/91 was submitted on 25-7-91, whereas the drawing for t....
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....r chapter notes and relied upon various authorities to support the contention viz. Fenner India Ltd. v. CCE - 1995 (77) E.L.T. 8 (S.C.); Sanghvi Swiss Refills - 1997 (94) E.L.T. 644; Saurashtra Chemicals - 23 E.L.T. 283 (CEGAT); Metrowood Engg. Works - 43 E.L.T. 660; Vanguard Ins. Co. AIR 1960 SC 971. While it is necessary to consider the note 3 to chapter 87 before arriving at heading 8702 or 8703, it is equally necessary and essential to arrive at the correct seating capacity of the impugned motor vehicle before considering Note 3 of Chapter 87. e.g. the seating capacity zero or more than zero would determine whether note 3 is to be taken into consideration or otherwise. Further, if the seating capacity is more than zero then depending upon whether it is 10 (or more) the heading 8702 would be attracted in terms of Note 3 (supra) else the heading 8703 would be attracted. Therefore, the contention of the investigation to rely upon the MV Act, 1988 and the rules there under to determine the correct seating capacity of the impugned vehicle is well founded". 46.10 Further, in Para 35 of his order, the Commissioner has rejected the claim of the appellants regarding classification on t....
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....artment cannot rely upon the MV Act for classification and allowing the appeal filed by the appellants upholding the classification under CETH 8702 was dated 19-7-2005 (dictated in Court) yet the same was signed by the members of the Bench on 25-10-2005 and it was issued by the registry on 24-11-2005. The stay order was heard on 19-9-2005 and the order was signed on 30-11-2005. Therefore, even though the stay order has been set aside, the same has been discussed only to show that another Bench of this Tribunal had taken a prima facie view that while deciding the seating capacity of the vehicle recourse can be had to Maharashtra Motor Vehicle Rules independently without being influenced by the decision of another coordinate Bench. 46.14 Further, the Hon'ble Mumbai High Court also had occasion to consider this issue in the Writ Petition filed by the appellants. The Hon'ble High Court observed that merely because earlier the Excise department had accepted a certain classification does not mean that the Excise department cannot later based on material, find that the classification ought to be under a different heading. Thus we find that the Hon'ble High Court had also come to the conc....
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....hat it is not at all based on the ARAI or Transport Commissioner's certificate/opinion/correspondence. In fact Commissioner's conclusion is that the Transport Commissioner made a mistake in including 10 as seating capacity and when the vehicle was presented there was no category such as "non-transport". From Shri Muzavar's statement what emerges is that ARAI is concerned with Rules 91 to 126 of Maharashtra Motor Vehicle Rules (MMVR) none of which relate to seating capacity. In fact both Shri Muzavar and Transport Commissioner admit that in the absence of any legal requirements of seating capacity as per standards laid down in MMVR. ARAI had put 10 passengers and tested the vehicle and RTO also had done the same. What the Commissioner says that while determining the seating capacity, Rule 79 to Rule 82 and 171 of MMVR have to be applied and after determination of seating capacity, classification under SCETA has to be done as we have observed above. Therefore, we do not find any relevance of the correspondence/consultancy and conclusion thereof with Transport Commissioner in respect of the proceedings before us. Therefore, this plea fails. 48. Now we take up the classification of th....
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....ence or discomfort is caused to any passenger. Such number of seats may be specified in the permit shall be kept fee and unimpeded for the use of passengers and the access to the entrance to and exit from the vehicle, required under Chapter VII of these rules shall be unobstructed. (7) The weight in kilograms of goods carried on a stage carriage shall not exceed (N-X) x 68 where in relation to a single decked stage carriage or to the lower deck of a double decked stage carriage. For the purpose of this sub-rule "N" is the registered passenger seating capacity of the vehicle; and "X" is the number of passengers carried on the vehicle, or the number of passengers for whom seats are kept free and unimpeded by goods whichever is greater. Rule 80. - Carriage of goods on contract carriage prohibited. - The Regional Transport Authority may, authorize the use of contract carriage for the carriage of goods used for- (a)special reasons on particular occasions and subject to conditions and restrictions to be specified on the permit; (b)the carriage of the personal, office or household effects of a hirer, so authorised in the permit but not the carriage of general merchandise. 81.Carriage....
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....es and some have no rules as regards seating capacity at all. Therefore one cannot rely upon MMVR only. This has already been answered by another Bench of this Tribunal in their order dated 30-11-2005 while considering stay application against this order and the Bench observed that since vehicles were manufactured in Maharashtra, there was nothing wrong in relying upon MMVR to see whether vehicle has the seating capacity as per MMVR. It was also submitted that vehicle is in full compliance with the seating size regulations applicable in the Punjab Motor Vehicle Rules. We find from the records that this submission was rebutted by the Special Counsel for Revenue when this Tribunal was hearing the stay application and we reproduce the same. "The applicant had also raised a contention that the parameters of said seat for two persons recorded during investigation was 75 cms (i.e. 750 mm) and consequently 375 mm per person was in conformity with the 375 mm specified under the Punjab Motor Vehicle Rules. In reply, it was submitted that para 9 of the Show Cause Notice refers to the details of the said dimension. That 750cms was recorded for part No. 0070994 (i.e. finished side seat - carc....
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....carriage. Section 2(47) "transport vehicle" means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. Central Motor Vehicles Rules 1989 - Rule 2(h) "non-transport vehicle" means a motor vehicle which is not a transport vehicle". 48.7 The definitions in the MV Act and the Central Motor Vehicle Rules specified the parameters for transport category vehicles in respect of seating capacity and load bearing capacity. Rule 171 of MMVR stated that for each passenger, a reasonably comfortable seating space of not less than 381 mm was to be provided. The department's case is that the vehicle manufactured by the appellants does not fulfil this requirement. The Commissioner in his order has observed that the length of the seat was found to be only 723.9 mm as against 762 mm required for two persons in the case of side seats. In the case of co-driver seat also, the length was found to be less than what was required. The Commissioner has also relied upon the statement of Shri Sanjay S. Joshi, Section Engineer, who in his statement admitted that he had received a note from the marketing department as rough guidelines for development of seats....
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....when the direction for issue of registration certificate was granted, there were no drawings, designs, etc. as regards the seating capacity in respect of the vehicle. 48.9 The statement of Shri Mujawar as well as the reply to the Tran- sport Commissioner clearly shows that they have gone through the seating capacity declared by the appellants and both of them have not taken the statutory requirements into consideration. The ARAI was not required to do so and the Transport Commissioner also stated that he was not required to look into it since for the vehicle is of non-transport category; there were no specifications in the MMVR for seating capacity. He also relied upon the ARAI certificate and the report of the RTO both of whom tested the seating capacity by putting 10 persons in the vehicle. Interestingly, the so called drawing, which was submitted to the Motor Vehicle authorities, has the words "specification subject to change without notice". It is strange that when the statute requires that every prototype of the vehicle is required to be certified by the ARAI and every vehicle is to be registered by the Transport Department and no change in the design, construction, etc. can ....
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....ification. If we accept the contention of the appellants, the report of ARAI and the observations of the Transport Commissioner are to be accepted, it would mean that we are applying the provisions of MV Act. But considerable time was spent in arguing in support of the contentions that MV Act cannot be depended upon. 48.11 Another reason why we cannot accept this view is description in the tariff itself. The tariff description prior to 1-3-92 was public transport type vehicle. The contention of the appellants is that neither Central Excise tariff nor the HSN referred to, MV Act and Rules thereunder. Therefore, Revenue cannot rely upon the MV Act and Rules for classification. The question arises where to go to find out the meaning of public transport vehicle. How do we find whether the vehicle is for transporting 10 persons and whether it is a transport type vehicle. The HSN explanatory note is meant for the whole world. As pointed out by the ld. Advocate, standards are available and no meaning is available and when the MV Act provides that a vehicle cannot be sold if it does not fulfil the requirements in terms of the design, construction, etc. and cannot ply on the road, whether ....
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....ort of their contentions. In this case, the assessing authority had to determine the vehicle had seating capacity and whether the vehicle was of public transport type. Only when the vehicle had the seating capacity as a public transport type vehicle, it could have been classified under CETA 8702. For this purpose, in the absence of any methodology or procedure set out either in the tariff or in the HSN, the Central Excise Officer had no option but to rely upon the specifications given in the MV Act and the Rules, which are meant specifically for this purpose. Therefore, the decision of the Hon'ble Supreme Court in the case of Fenner India Ltd. v. CCE, 1995 (77) E.L.T. 8 (S.C.), Sanghvi Swiss Refill - 1997 (94) E.L.T. 644 (Tri.), Saurashtra Chemicals - 1986 (23) E.L.T. 283 (Tri.), and Metrowood Engineering Works - 1989 (43) E.L.T. 660 (Tri.) are of no support to the appellants. Since in this case tariff heading read with Chapter note are not sufficient to determine the classification and to determine the type of vehicle and seating capacity the officer has to refer to MV Act. 48.13 We have elaborately discussed and come to the conclusion that the process adopted by the Revenue for ....
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....AI and the statutory authorities are to be ignored only for the reason that in the instructions and warranty booklet dual seat has been shown in the driver's cabin. The explanation offered by the assessee that dual seat in driver's cabin was meant only in respect of three-wheeler used as load carrier or delivery van is only to be accepted. (b) CCE v. Parle Exports (P) Ltd., 1988 (38) E.L.T. 741 (Para 10 & 11) - Our attention was drawn to a decision of the Government of India in Re: Asian Chemical Works [1982 (10) E.L.T. 609A] where the Government of India opined that 'Food flavours' and food preparations' might improve taste or appearance of food products and/or food preparations, but by themselves could not be legitimately consumed directly or after processing such as cooking, dissolving, or boiling in water for human consumption independently. Mr. Singh submitted that in ordinary common and commercial parlance also the goods in question are not known as food products and/or food preparations as such, therefore, these are not to be treated as exempt under the notification. Mr. Singh submitted that when a person says "I have consumed food" he does not mean/or says that he has....
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....ty of construction arises. The Judicial Committee reiterated in the said decision at page 369 of the report that in a taxing Act provisions establishing an exception to the general rule of taxation are to be construed strictly against those who invoke its benefit. While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided. Therefore, in our view department is free to place reliance upon the provisions of MV Act and Rules and this further leads support to the case of the Revenue. 48.14 The appellants relied upon the decision of the Vanguard Ins. Co., AIR 1960 SC 971 and stated in para 6 of the order in support of their contention. "It is well settled that all statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clause which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in diff....
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....mself, which is what the Commissioner has proceeded to do in his order in paragraphs 33.2, 33.4, 33.5 and 34. 48.17 At this stage we cannot ignore the fact that as per the law there is a requirement of a baggage allowance of minimum of 14Kgs. for each person assuming that the appellants vehicle is not a stage carriage. This has been analysed by the Commissioner in his order. Without going into too many details, we see that the vehicle taking payload is 700Kgs. average weight as 68Kgs. per person. If 10 persons are seated in the vehicle, the total weight would come to 680Kgs, this means that these 10 passengers together cannot carry luggage of more than 20Kgs. It is for the appellants to consider as to whether this would be adequate for 10 passengers or not. In any case as examined by the Commissioner, this is not sufficient. On this ground also, the appellants vehicle fails the test of classification under 8702. 48.18 It was also submitted that when common parlance test is to be applied vehicle has to be clarified as a 10 seater. Commercial/common/trade parlance more often than not precedes the vehicle. When a vehicle of this type was not at all on the road when clarification was....
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....d vehicle was not in conformity of the said Rule 171 of MMVR, 1989; that as per the provisions of Rule 171 of MMVR, 1989 which M & M knew to be applicable, the seating capacity of the impugned vehicle was less than 10 persons including the driver". 49.2 However, we find that the Commissioner has listed out the contentions of the appellants before him relating to the suppression in para 16 of his order. We intent to consider each of the ground canvassed before the Commissioner and deal with the same in the light of the facts and arguments advanced before us. 49.3 A show cause notice had been issued on 26-12-91 proposing to demand duty of Rs.8.9 crores and this was after carrying out a detailed verification of the vehicle and the Commissioner, Mumbai-II passed an order, which was issued on 16-6-92 dropping the proceedings. We find that the Commissioner in his order had dropped the proceedings after his finding that the department itself had accepted that the Commander type vehicle were vehicles designed for the transportation of 10 persons including the driver. He also observed that this was based on the Circular dated 19-8-91 of the Transport Commissioner. This is precisely the r....
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.... not mean that company did not declare the seating capacity of the vehicle wrongly. The marketing department was aware about the seating specifications as early as January and in June, 1991, the note was transferred to Shri Sanjay Joshi of R&D unit. We have already reproduced the relevant portions of the statement and the contents of the note. What the notes and the ultimate results revealed is that there were no drawings for the seats of the vehicle as on 25-7-91, the date on which the classification list was filed by the appellants. At that time they had only one sample set of seats made by the vendor and the trial fitment had been carried out and note dated 26-7-91 was forwarded to vendor. This statement of Shri Sanjay Joshi, Sector Engineer, R&D unit clearly shows that leave alone the drawings, design etc. in respect of the seats even the seats manufactured by the vendor had been returned to him requesting him to make some modifications based on the observations. Only subsequent to this vendor supplied the seats, which were found to be satisfactory and thereafter prototype was sent to ARAI for certification and the circular was issued by the Transport Commissioner for registrat....
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....appellants is that the Transport Commissioner did not have any objection with regard to the blue prints submitted by them. They also submitted that they had not relied upon the circular of the Transport Commissioner and the same was submitted as requested by the Assistant Collector. The classification was not in any way depending on the determination of the type of the vehicle under the MV Act. They had not declared the vehicle as Omnibus in non-transport category in any application to any authority. The excise department had not produced any evidence to controvert the fact that the vehicle was capable of carrying 10 persons. In fact the internal note issued by Shri Pavithran wherein safeguards to be taken for ensuring the admissibility of lower excise duty benefits have been mentioned itself would be sufficient to show that the appellants were aware that their vehicle did not fulfil the requirement of the transport type vehicles. If it fulfilled the requirement as per Act and Rules applicable to Transport type vehicles, there was no need to issue any letter. In fact, the vehicle was registered by the Transport Commissioner of Maharashtra pending classification of the vehicle by i....
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..... Advocate informed us that the appellant's company had an agreement for using the brand name "Jeep" with Chrysler (owner name of the brand name) and this agreement expired somewhere in 1989 or subsequently and, therefore, this internal note was issued. It was also submitted that the "Jeep" logo was not put on any vehicles and not Commander alone. While going through the records, we found the appellants had filed a classification list on 1-3-92 after the tariff heading was amended. In this classification list there are about 10 models of vehicles, which are described by the appellants as jeep. This clearly shows that the internal note was issued to ensure that if the vehicle is shown as jeep, the requirements of transport type vehicle would be attracted and vehicle will fail the seating capacity test. The claim of the appellants is that they were not responsible for getting the registration as Omnibus in non-transport category design does not carry convention. In fact the Omnibus under non-transport category was notified because of the initiative taken by the appellants by making a representation on 22-7-92 and held meetings between 4th and 7th August, 1992. It has to be noted that....
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....are subject to change and we also found the initials of an officer of transport department. For the purpose of Transport Commissioner may be he considered this sufficient and, therefore, we cannot take any objection to the same. But for the purpose of classification under Central Excise tariff, the department has shown that the vehicle did not have seating capacity. Even the Hon'ble High Court was not fortunate to see the blue prints or designs. 53.The appellants have cited several decisions of the Hon'ble Supreme Court in support of their contention that extended period cannot be invoked where the goods are cleared on the basis of approved classification list. These decisions are not applicable in view of the fact that in this case the department's case is that approval of classification list was obtained by the suppression of facts and misdeclaration. 54. Further, the appellants have contended that if earlier show cause notices have been issued on the same issue, there cannot be another proceedings. We have already discussed this aspect and there are several decisions of the Supreme Court, which we have stated earlier to show that the department is not estopped from changing th....