TaxTMI 
TaxTMI 
2016 (7) TMI 295
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....erits inter alia stating that the classification of the product would be under chapter sub-heading number 95.08 as Fairground amusements. The adjudicating authority after following the due process of law confirmed the demands raised and also imposed penalties besides demanding interest. Aggrieved by such an order an appeal was preferred before the first appellate authority. The first appellate authority after following the due process of law set aside the order in original and held in favour of the respondent herein.. 3. Learned departmental representative after taking us to the entire case records would submit that the products manufactured by the respondent i.e. Go-karts are classifiable under chapter heading number 8703. He would draw our attention to the fact that the respondent had not taken the registration certificate claiming the benefit of small scale industry exemption notification. It is his submission that the first appellate authority has erred in applying the principle that the classification of the product needs to be done on the basis of commercial parlance test and the assessing authority has to follow expert opinion. It is his submission that the adjudicating....
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....m) is erroneous since Go-Karts are not sports vehicles. The Respondents submit that they have provided detailed charts, and opinions as to how Go-Karts are different from sports vehicles which were a part of the Appeal Paper book before the Commissioner (Appeal). The Respondents places reliance on the same. F. The Appellant's contention that Go-Karts are sports vehicles which are excluded under Chapter Note 1 (m) to Chapter 95 was not raised in the Show cause notice, hence the same is beyond the scope of Show cause. G. The impugned order has correctly held that Go-Karts also are not treated as motor vehicles as per commercial parlance or trade understanding. It is settled law that classification of the goods for the purpose of tax must be determined on the basis of commercial parlance and trade understanding. Reliance is placed on the following decisions- a. CST v. Jaswant Singh Charan Singh AIR 1967 SC 1454 b. Alpine Industries v. CCE 2003(152) ELT 16 c. G.S. Auto International Ltd. v. CCE 2003(152) ELT 3. H. The impugned order has correctly considered the expert opinions furnished by the Respondents which have categorically ....
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.... which is the essential requirement for classification under CeTH 8703.90. The entry reads as follows, Heading Subheading Description Rate of Duty (1) (2) (3) (4) 87.03 Motor cars and other motor vehicles principally designed for the transport of not more than six persons, excluding the driver, including racing cars 8703.90 Other 24% (Central Excise Tariff of India 1999-2000) (Emphasis supplied) K. For a good to be classified under CeTH 8703.90 the following requirements have to be satisfied- a. It should be a motor car / other motor vehicles b. Such motor car / other motor vehicles must be principally designed for transport of a set number of persons. Such motor cars include racing cars. L. In the present case, it has been rightly held in the impugned order that Go-Karts are not the same as motor cars or other motor vehicles. It is submitted that motor car or motor vehicle are not defined under the Act or the CETA. Motor vehicle has been defined in Section 2(28) of the Motor Vehicles Act, 1988 as follows, ""motor vehicle" or "vehicle" means any mecha....
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....rincipally designed for transportation of persons, hence classifiable under Chapter 9508. R. Go-Karts are also not principally designed for transportation of persons. The word principally means primarily and / or mainly. The definition of principally in various dictionaries is as follows- a. Concise Oxford Dictionary (Page 948- 8th Edn)- Principally- for the most part; chiefly b. Webster's Third New International Dictionary (Vol.II, Pg. 1830)- "Principally: in principal manner: in the chief place or degree: PRIMARILY, CHIEFLY, MAINLY" . S. The fact that the Go-Kart is not principally designed for transport is apparent from the fact that A Go-Kart can only operate on specialized tracks that are specifically developed for such Go-Karts. The Go-Kart cannot function outside of such specialized tracks as its ground clearance is only around an inch and even a small pebble on a road can bring the Go-Kart to a complete stand still. Classification for excise duty must be based on the primary function of the Product T. It is settled legal position that for purpose of excise duty classification must be based on the primary function of the ....
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....t was logically involved in the facts, the decision is not an authority on these points and said be sub-silentio. It is submitted that precedent sub silentio is neither authoritative nor is binding nor would be followed. Hence, the decision of Nishiland Pvt Ltd can not be followed in the present case. Reliance is placed on the following decision- COLLECTOR OF CENTRAL EXCISE, Rajkot V/s Surgichem 1987(27) ELT 548 COLLECTER OF CENTRAL EXCISE, Meerut V/s Maruthi Foam (P) LTD 1996 (85) ELT 157 Y. It is submitted that there is no principle of res judicata operating on subsequent matters nor Rule of estoppel arises in fiscal matters if fresh facts comes to the light. Reliance is placed on the following decisions- A.b. Mauri India Pvt. LTD.V/s Commissioner Of C. EX., PUNE-II 2010 (260) ELT 424 III Without prejudice to the above contention, the demand is barred by limitation as the Respondents were under bonafide belief that the Go-Karts cleared were not liable for duty AA. It is submitted that the Respondents were under bonafide belief that the Go-Karts manufactured were not chargeable to....
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....ue claims the classification under chapter heading number 8703. Both sides have relied upon various documents to justify their claim of classification. In order to appreciate the correct position of law, the relevant chapter sub-heading numbers are reproduced. "87.03 Motor cars and other motor vehicles principally designed for the transport of not more than six persons, excluding the driver, including racing cars 8703.10 Three-wheeled motor vehicles 8703.90 Other 95.08 9508.00 Roundabouts, swings, shooting galleries and other fairground amusements. 6.1 It can be seen from the above reproduced chapter subheading number, revenue wants to classify the product as motor cars while the assessee wants to classify the same as article of Fairground amusements. 6.2 It is undisputed that the go-kart manufactured by the respondent assessee is used for racing in go-kart racing. The differentiation brought out by the learned Counsel in the case of Leisureland Pvt. Ltd. (supra) and Nishiland Park Ltd. (supra) does not instill any confidence in us to reconsider the issue afresh. We find that the issue is now squarely settled by the judgement of ....
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....as it can be shown that it is a motor vehicle and that it is principally designed to transport persons. In fact, the Caution in their invoices for the sale of go-karts is 1. Use on private property only; 2. Illegal to ply on public roads. Therefore, even if the goods are designed for plying on private roads for transport of persons, they will be covered by Heading 87.03 CETA. In such a context and having regard to the wording of the tariff heading, it may not be necessary to invoke the definition of the term Motor Vehicle from the M.V Act for construing the tariff heading. In the result, the go-karts have been correctly held to be classifiable under Heading 87.03 CETA -85. The order proposed bv Hon'ble Member (Technical) is, therefore, concurred with." 6.3 Similar issue as to the import of the very same item go-kart was being considered by this Tribunal in the case of Nishiland Park Ltd therein the Tribunal in paragraph number 8 to 15 held as under. "8. The Counsel for the appellant next contends that the go-kart considered by the Tribunal was significantly different from the go-kart that is presently under consideration. He emphasised that the go-kart imported by the ....
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....Steering Positive Positive Electrical No lights Lights and Horn Wheels 4.10 W 350, 4 ply tyres and tubes. Front 1000-1270 mm base and 750-900 mm track Overall length 1400 mm 2000 mm Overall width 1200 mm 850 mm Overall height 650 mm 800 to 1000 mm Brakes Twin hydraulic disc brakes operating to both rear wheels On both rear wheels Accelerator Wire linkage Wire linkage Start Recoil starter Recoil starter Fuel Petrol Petrol and Mobil oil Consumption 30 kmpl 25kmpl Fuel Capacity 3 litre 3 litre Engine Honda 5.5 HP, 4 stroke engines 2.5 BHP, single cylinder, two stroke Chassis Steel tubing braced and reinforced Tubular steel frame Bodyshell Glass reinforced plastic PBS sheet 10. A consideration of these features it does not impel us to conclude that the difference between the vehicle under consideration and the one found in Leisureland Pvt. Ltd. v. CCE is not significant enough not to apply the ratio of the earlier decision. 11. Nor we are able to accept the contention of the Counsel that the appellant that the go-kart is not pri....
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.... imported without the master control and the split leads, etc. is not one which can be stopped or controlled by an external agency. It is a vehicle whose operations are completely under the control of its driver. The certificate is therefore, incorrect to the extent that it lay emphasis upon the master control. It would not have any impact upon the classification of the go-kart. 14. Even independently of decision of the Tribunal in Leisureland Pvt. Ltd. v. CCE we are unable to accept classification of these goods under Heading 95.08. Classification is claimed under this heading are on the ground that the goods fall in the category of other fairground amusements. Note (1) to Chapter 95 excludes from that Chapter in Clause (n) sports vehicles other than bobsleighs, toboggans and the like of Section XVII and sports craft such as canoes and skiffs, childrens bicycles. Now not one of this category of vehicles or craft is intended for commercial transportation of persons or goods. Each of them is intended to provide transportation but for reasons of pleasure and amusement. Therefore the view that since the go-cart is intended to transport persons only for purposes other than ....