TaxTMI 
TaxTMI 
2009 (11) TMI 487
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....angement or load carrying capacity and classified the vehicles accordingly after complying with the provisions to the Motor Vehicle Act, Central Motor Vehicle Rules and other Rules made by different State Governments. Rule 126 of the Central Motor Vehicle Rules required the appellants to obtain a certificate from one of the institutions mentioned in the said rules when a prototype of principal vehicle is developed by the appellants Research and Development department and manufactured for the same. 1.2 On development of following types of vehicles, the appellant submitted them for testing to the vehicle Research & Development Establishment, Ministry of Defence (VRDE, Ahmednagar and Automotive Research Association of India (ARAI) in the years 1993, 1996 and 1998 and obtained certificates of compliance with the Central Motor Vehicle Rules. Type of Vehicles (a) Matador F-307 Station Wagon (Taxi) for transport of not more than 6 persons excluding driver WB 2400mm fitted with OM 616 Diesel Engine (4) 7.00 × 15-10 Ply nylon tyres. (b) Tempo Trax (Taxi) for transport of not more than 6 persons excluding driver WB 2160 mm with or without canopy fitted with OM 616 diesel engine ....
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.... six persons, but not more than twelve persons (excluding driver) 58&59 8702.10 -do- -do- Motor vehicles principally designed for transport of not more than six persons (excluding driver) 5. Metador F-307 Station Wagon (Taxi) for transport of not more than six persons excluding driver. Wheel Base 2400 MM 32 8703.90 BED-24% Adv. SED-16% Cess-1/8% We will claim refund of excess duty paid on vehicles at the time clearance after following condition No. 45 of Notf. No. 5/99, dtd. 28-2-99 (S. No. 232) 6. Tempo Trax (Taxi) for transport of not more than six persons excluding driver Wheel Base 2160 MM 37 8703.90 -do- -do- 7. Tempo Trax Town & Country (Taxi) seating capacity 5+D persons, with partitions Lug space Wheel Base 2750 MM 48 8703.90 -do- -do- 8. Tempo Trax Wheel Base 2400 MM for transport of not more than six persons (excluding driver) 61 & 62 8703.90 -do- Tariff rate. This item though not described as Taxi in classification declaration w.e.f. 1-4-99 but Taxi refund claim filed for this as well. 1.4 On examination of classification details declared by the Bajaj it was noticed that motor....
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.... of Rs. 84,41,443/- sanctioned to Bajaj but not paid was held to be not payable and claims for refund of duty amounting to Rs. 1,42,42,977/- were rejected as inadmissible. 3. Bajaj filed an appeal to the Commissioner (Appeals) and Commissioner (Appeals) in the impugned common order in respect of all the four appeals namely on classification and three refunds as discussed above and held that vehicles are correctly classifiable under heading 8703.90 and Bajaj was eligible for the refunds claimed by them in terms of notifications. He also rejected the appeal filed by the department against the sanction of refund made earlier by the Original Adjudicating Authority. Revenue is in appeal against this decision of the Commissioner (Appeals) in the common order passed by him in respect of four issues detailed above. 4. Learned DR on behalf of the Revenue submits that :- 4.1 As can be seen from the classification declaration filed by Bajaj, the vehicles with the same wheel base and also with the same model name have been cleared with different seating capacity. He drew our attention to the certificates issued by Automotive Research Association of India (ARAI for short), which stated....
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....hat the certificate issued by ARAI provides the seating capacity based on the number of seats attached by Bajaj at the time of producing of vehicle for testing and the certificate does not certify the maximum transport capacity of the said Motor Vehicles nor does it certify the principal design to which the said vehicles were manufactured as regards various variants of the basic model. 4.3 Further learned DR also relied upon the statements of Shri M.M. Gupta, Divisional Manager (Marketing), of Bajaj who had stated that there is no difference in these two types of vehicles except the number of seats provided at the time of manufacture and clearance of the vehicle. 4.4 As regards the fulfilment of conditions under the notifications, one of which requires manufacturer to furnish a certificate from an officer authorized by the State Transport Authorities with whom the said Motor Vehicle has been registered for use and sale for taxi, he submits that the said transport authority register the vehicle as it is presented and they are not really concerned with the classification of the vehicle as such. Therefore, merely because Bajaj has been able to produce the certificate they would ....
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....and also by taking note of the design and drawing separately for each variant shows that the contention of Shri B.N. Ghosh the clause 'Principally designed' applies to only basic model is not correct 5.1 He further submits that according to Rule 126 of Motor Vehicles Manual (As applicable in MP State) prototype of every Motor Vehicle is required to be subjected to test. The Rule specifies that prototype of every vehicle is required to be submitted to the recognized agency to test and to grant a certificate as the compliance of the provisions of the Act and these Rules. 5.2 Further, he also drew our attention to the definition of Motor Vehicles in the Motor Vehicles Act, 1988. According to the definitions in the Motor Vehicles Act:- "Maxi Cab" means any motor vehicle constructed or adapted to carry more than six passengers but nor more than twelve passengers, excluding the driver, for hire or reward. "Motor Cab" means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward. "Omnibus" means any motor vehicle constructed or adapted to carry more than six persons excluding the driver. 5.3 As per Section 41 of....
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.... is not the case of Revenue that vehicles have been modified subsequently, in fact, Revenue has not shown even one vehicle to have been modified, it is not the case of Revenue that vehicles as they were cleared from the factory do not fulfil the requirement of the exemption Notification or were cleared without filing the classification declaration. 5.5 Ld. Advocate also submitted that the explanatory notes issued by the Board regarding budget changes in 1997-98 with respect to motor vehicles, clearly provides that the seating capacity of the motor vehicles has to be ascertained from the registration certificate issued by the State Transport Commissioner or Certificate of compliance of the Central Motor Vehicles Rules issued by the recognized testing agency. This clarification was issued specifically with respect to exemption notification which provided for refund of excess duty paid in respect of vehicles which are used as taxi cabs. He also submitted that in respect of other vehicles of the same model which were not cleared for use as a Taxi Cabs, Bajaj had paid 40% Central Excise duty and had not claimed any refund. 5.6 He also cited several decisions in support of his cont....
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....fied under 8702 and 8703 considering the seating capacity of the vehicle when they were cleared from the factory. The stand of the Revenue is that for classification under 8702 or 8703, what is relevant is principal design and not actual seating capacity of the vehicle. Therefore, the whole issue before us is whether the words "Principally designed" used in the classification heading is to be treated as applicable only to what is known as basic model or can it be said that the designing of the vehicle is complete only when manufacturer also provides appropriate number of seats in the vehicle and designs it for a specific number of passengers. 6.4 Certificates issued by ARAI shows that while issuing certificate they had classified the vehicles as basic model and also variants. The details such as whether the model is basic model or variant, wheel base, GVW (Gross Vehicle Weight) as well as seating capacity are indicated in the certificate. Further, the certificate also has a title "certificate of compliance to the Central Motor Vehicles Rules". The department's case is mainly dependent upon the statement of Shri M.M. Gupta, additional Manager who stated that there is no differenc....
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....roduced as below :- "Motor Vehicles (Chapter-87). - The effective rate of duty on tractors of different engine capacities is incorporated in the Tariff itself. However, there is no change in the effective rate of duty on tractors. Tractors of engine capacity not exceeding 1800cc continue to be exempted and tractors of engine capacity exceeding 1800cc attract a duty of 10% ad valorem under their respective sub-headings in the tariff. (Finance Bill and S. Nos. 115 and 116 of Notification No. 16/96-Central Excise) Chapter Heading No. 87.02 and 87.03 in the tariff have been modified to align them essentially on the lines of the Motor Vehicles Act, 1988, wherein the passenger motor vehicles are classified on the basis of passenger carrying capacity. Consequently, the earlier classification of motor vehicles falling under heading No. 87.02 on the basis of Gross Vehicle Weight (GVW) has been discontinued. The seating capacity of the motor vehicles can be ascertained from the registration certificate issued by the State Transport Commissioner or the 'Certificate of Compliance of Central Motor Vehicle Rules' issued by Vehicle Research and Development Establishment, Ministry of Defe....