TaxTMI 
TaxTMI 
2018 (4) TMI 1315
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....By a letter dated 23.06.2008, appellants informed the jurisdictional Central Excise authorities that they intend to classify the said "Bolero Camper" as motor vehicle for transportation of goods under CETH classification 8704.21.90, w.e.f. 01.07.2008. Department took the view that the impugned motor vehicle is not primarily meant for carrying loads but for transporting persons and hence would merit classification under CETH 8703 only. Accordingly, show cause notices were issued to the appellants proposing classification of the vehicles under 8703.33.99 of CETH, demand of differential duty liabilities with interest thereon as also imposition of penalty. On adjudication, the proposals with respect to CETH classification and differential duty liability with interest were confirmed though the amount confirmed was lower than that proposed in the show cause notices. The proposal for imposition of penalty was dropped. Details of show cause notices and adjudication orders (impugned orders) relating to these appeals are given as under: S.No. Appeal No. OIO No. & Date Differential duty confirmed (Rs.) Penalty under Sec. 25/1 (Rs.) 1. E/2715/2010 O-I-O No: 5/2010....
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....enger is considered as 68 kgs per person, as is the norm used for all measurements by ARAI, VRDE, BIS standards, etc. b) The details indicated above have been compiled from the certificates issued by the ARAI/VRDE in respect of the respective vehicles. These are part of the records with the department. 4. Ld. Advocate also made other submissions, which can be broadly summarised as under : i) For a vehicle to fall under Heading 87.03, it should be principally designed for the transport of persons. However, for it to fall under heading 87.04, it need not be principally designed for transport of goods. Thus, if a vehicle is principally designed for the transport of goods, it will definitely fall under heading 87.04. Even if the vehicle is not principally designed for transport of goods, but if it is for transport of goods and persons, neither of which is its principal design, it would fall under heading 87.04. Therefore a hybrid vehicle which is for carrying both persons and goods would fall under heading 87.04. This also gets established from the above that once the vehicle is not principally designed for the transport of persons, it would fall under 87.04 and would be out o....
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....2) ELT A259 (SC). 5. Bolero Camper vehicle and its variants involved in the present case are identical to the vehicle manufactured by the appellants in their Nashik factory, which were considered in the aforesaid decision reported at 2002 (143) ELT 548 and therefore, the issue of classification of the vehicle in question in the present appeals, has been considered and decided by the Tribunal as falling under Heading 87.04 as vehicle for transportation of goods and not as the vehicle principally designed for transportation of passenger under Heading No. 87.03. Hence the impugned orders are liable to be set aside. vi) The Automotive Research Association of India at Pune (ARAI) and the Vehicle Research & Development Establishment, Ahmednagar (VRDE), which are institutions established by the Government of India for certifying that the vehicles manufactured and/or plying in India are complying with Central Motor Vehicles Rules, had categorized the vehicles in question as "Goods Vehicle". The appellants had also furnished copy of the registration certificate issued by the Regional Transport Authority to submit that the vehicles were categorized as Goods Carriage (Annexure-15). Effe....
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....ilities provided for passengers are also significantly more. So would be the relative cost of passenger space and cargo space. Hence, relative space available/facilities for passengers and goods should be taken as the criterion and not the relative weight carrying capacity. e) Since MBC is not meant for carriage of goods alone, but instead may be used, without structural alteration, for the transportation of both persons and goods, the same has to be considered only as 'station wagon', in terms of Note 6 of Chapter 87 of the CETA 1985 1985 and the proper classification of the said vehicle would be under CETH 8703 33 99. f) As per the Customs tariff, 'station wagon' means " vehicles with a maximum seating capacity of nine persons (including driver), the interior of which may be used, without structural alteration for the transport of both persons and goods" . Per contra, as per Chapter Note 6 to chapter 87 of CE Tariff 'station wagons' means "Vehicles which may be used, without structural alteration, for the transportation of both persons and goods". This would suggest that the alteration factor would apply to both interior as well as exterior space. This provision clearly mar....
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....the Budget 2000". In addition, a Chapter Note 6 was introduced in Chapter 87 to elucidate the scope of " station wagons". "87.03 Motor Cars and other motor vehicles principally designed for the transport of not more than six persons, excluding the driver, including station wagons and racing cars. 87.04 Motor Vehicles for the transport of goods" For the purpose of this chapter, 'station wagons' means vehicles which may be used, without structural alteration, for the transportation of both persons and goods" iv) We note that the said Chapter Note 6 evidently had its basis in the following HSN Explanatory Notes for Chapter 8703. "For the purposes of this heading, the expression "station wagons" means vehicles with a maximum seating capacity of nine persons (including the driver), the interior of which may be used, without structural alteration, for the transport of both persons and goods." v) After introduction of 8 digit nomenclature, the competing entries read as follows in 2008-2009: "8703 - Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racin....
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....cipally designed for transport of not more than six persons'. Ultimate usage of a product, mentioned in the entry is not (h) relevant, when the entry refers to no such end use. In case of 8703 the term "Other motor vehicles principally designed for the transport of not more than six persons", may imply reading of an 'end use' stipulation to mean that Design of the vehicle for purpose of transport of passengers and not cargo. we therefore conclude, that an incidental use by crew/family members/farm labour, should not over-ride the essential characteristic of the vehicles herein which is for transport of goods/spare parts & tools/goods-farm produce for which it is designed put to use. The transport of person is incidental. That farm labour/crew/family members could travel in relative comfort of a Tractor/Trolley one encounters in the Rural Indian Scene, will not contribute to be a factor to determine those transports as 'principally designed for persons'. The other evidence from Transport Companies, which Revenue wants to rely upon, only indicate that the vehicle does not find, any use in Transportation Business. Such commercial non-use by itself, would not cause it to be class....
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....o prior to introduction of Finance Bill 2000 whereby chapter note '6' and description of heading 8703 of chapter 87 of Central Excise Tariff was amended. However, on careful examination, we find that both the arguments do not carry merit. True, the Tribunal in that decision did consider the period when the eight digit classification had not yet been introduced, however we find that there is no difference whatsoever in the tariff descriptions of the main headings 8703 and 8704 which has been analysed by the earlier Tribunal decision and the description thereof during the period impugned in the present appeal. iv) Revenue has made reference to re-introduction of the entry "station wagon" in the Finance Bill of 2000 and also an argument that the Chapter Note 6 to Chapter 87 of Central Excise Tariff is a partial departure from the corresponding Note in the HSN Tariff Heading 8703. We find however that this contention had also been addressed by the Tribunal in their earlier decision, and it was held that there is no material difference between the headings in the CETA. v) We also find that the vehicle in dispute in that case was "Mahindra Utility Double CAB" with a total upload of....
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....ion under Tariff heading 87.03. 6.6 Revenue have further contended that the description/purpose of "Mahindra Camper" variants as per their company's website and in advertisements is marketing the vehicle for the purpose " whether you have loads to deliver or places to visit for persons/with the family" and that the said descriptions highlight the plush interiors of the vehicle, which is not but one would expect in a vehicle for transportation of goods. The impugned orders also have referred to the brochures of the vehicle which emphasize luxury and comfort features for the driver. Nonetheless "plush interiors" cannot be made the deciding factor on whether the impugned vehicle is to be classified as a vehicle for transport of persons or otherwise for transport of goods. Possibly the appellants put forth such advertisements as a marketing ploy to attract attention of potential customers who require low tonnage pick up vehicle but at the same time want a comfortable driver cabin for themselves. It is not the case that the volume or tonnage available for storage of goods in the impugned vehicle are much lower than that provided for passengers, like what one would find in a passenger....
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....out structural alteration, for the transportation of both persons and goods. Corresponding Note 5 in HSN Tariff Heading 8703 reads as follows: "For the purposes of this heading, the expression "station wagons" means vehicles with a maximum seating capacity of nine persons (including the driver), the interior of which may be used, without structural alteration, for the transport of both persons and goods." Ld. Sr. Counsel pointed out that since the words "interior of which" is omitted in the Central Excise Tariff, the "no alteration" of notification would apply to both interior as well as exterior space, hence there is distinct difference between the entry in the tariff and the entry in HSN. We are unable to agree with such a proposition. In the first place, it has been unequivocally held by the Tribunal in its earlier decision (referred to supra) that there is "no material difference" between these two entries. Secondly, in our view, the non-inclusion of "interior of which" do not in any way materially change or impact the scope of the definition. The important requirement is only that the vehicle should not be subjected to any "structural alteration". However, in ou....
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....th persons and goods; (e) Presence of comfort features and interior finish and fittings throughout the vehicle interior that are associated with the passenger areas of vehicles (e.g. floor carpeting, ventilation, interior lighting, ashtrays)." The important takeaways from these HSN notes is that for a motor vehicle to find a fit in Heading 8703, will necessarily have only a single enclosed interior space, have rear windows along two side panels, have sliding, swing out or lift up doors, with windows, on the side panels or in the rear and more importantly, will not have any permanent panel or barrier between the area for the driver and front passengers and the rear area to enable it being used for transport of both persons and goods. Moreover, as per HSN, to find place in 8703, there should be presence of comfort features and interior finish throughout the vehicle interior. Discernibly, the impugned vehicle namely "Mahindra Camper" and its variants by no such imagination can be said to be satisfying these requirements. Hence, even by applying the conditionalties attendant to HSN notes in Heading 8703, we find that the impugned vehicle will not merit classification under 8703. ....