TaxTMI 
TaxTMI 
2016 (7) TMI 295
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....ion 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 authority has correctly come to a conclusion t....
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....ts 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 stated that Go-Karts are designed for recreation and entertainment purposes. The relevant extracts from the expert opinions are reproduced herein below- - Arvind Pangaonkar, General Manager (R&D), TVS Motor Com....
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....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 mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a....
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....w 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 product, in other words its final use. As aforesaid, the primary function of the Go-Karts in the present case is for amusement and not principally designed for transport of persons. Hence, the Go-Karts are rightly classified under Chapter 9508.Reliance is placed on the following decision to buttress the contention Atul Glass v/s Collector 1986 (25) ELT 30 U. It is pertinent to mention that under a notification dated 4th May 2002 issued b....
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.... 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 duty under heading 87.03 and never suppressed any fact. This belief was also based on the fact that Customs department were classifying the Go-Karts under Chapter 95.08, as evident from the Two Bills of Entry filed by them during the reply where Go-Karts imported have been cleared under Chapter 95.08 of the Customs Tariff Act,1975. Hence, the proviso of Section 11A is not applicable and demand is of Rs. 25,23,842 is barred by limitation. Reliance is placed on the following decisions- Padmani Products v/s Collector 1989 (43) EL....
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....ents. 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 Leisureland Pvt. Ltd. (supra) wherein majority order records that product in question are identical goods manufactured, classifiable under chapter heading number 8703. There is no dispute that the products manufactured by the appellants in the case of Leisureland Pvt. Ltd. (supra) (as per the technical specification indicated in paragraph number 5 of the said order) are similar to the products manufactured by the respondent assessee herein as can be ascertained from the technical specification provided by the respondent and as reproduced in show cause notice. The Tribunal in the major....
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....o-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 appellant can only accommodate one person and, unlike the two seater dealt with in Leisureland Pvt. Ltd. v. CCE, does not have lights and horn, and does not have instrumentation such as speedometer. We agree that the go-kart considered in Leisureland Pvt. Ltd. v. CCE was fitted with a speedometer and odometer, lights and horn, when the goods under consideration lacks them. However, the presence of a speedometer and odometer, as far as we can see, is only relevant for the purpose of the Motor Vehicles Act and the rules framed therein. That Act makes it mandatory for the speedometer to be fitted to a vehi....
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....forced 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 principally designed for the transport of persons. According to him since it is not capable of being driven on roads and it is used to carry one person around a fixed track, it is not designed for such purpose. The term transport should not be construed in the narrow sense that carrying persons around a fixed tract is transportation. He also contends that the manufacturers in the present case has made a claim that it is principally designed for use in an amusement park. 12. The meaning of the word transport with which we are concerned is to carry goods or persons from one place to another. The argument that because the transport begins and ends at one point around a track there is no transport is simplistic. It is like saying that a person ....
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.... 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 commercial, it should be classified under Chapter 95 is rebutted. The Explanatory Notes to Heading 95.08 under the HSN reads as follows. "Fairground amusements, travelling circuses, travelling menageries and travelling theatres fall in this heading provided they comprise all the essential units required for their normal operation. The heading also includes items of auxiliary equipment provided they are presented with, and as components of, these various amusements, notwithstanding that when presented separately such items (e.g., tents, animals, musical instruments, power plants, motors, lighting fittings, seats, and arms and ammunition) would fall in other headings of the Nomenclature. Subject to the provisions of Note 1 to this Chapter, articles which are i....