CX - Classification of Commander Vehicles, whether under heading 87.02 or 87.03 of CETA, 1985 - In absence of any expert opinion from ARAI or VRDE, Larger Bench handicapped in taking final view - Matter remanded: CESTAT
By TIOL News Service
MUMBAI, APR 15, 2015: THE issue involved in these appeals relates to classification of motor vehicle model Nos. Commander 750 DP (10 Seater), Commander 650 DI (10 Seater) and Commander 750 DP (ST) manufactured by the assessee in their Kandivli and Nasik factories during the period from 01/04/1991 to 22/07/1996. The department's contention is that these vehicles merit classification under tariff heading 87.03 [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, Tariff @ 60%] of the Central Excise Tariff, whereas, the appellant claims classification under tariff heading 87.02 [‘public-transport type passenger motor vehicle', Tariff @ 25%].
The Apex Court vide its order dated 27/08/2014 - 2014-TIOL-71-SC-CX in Civil Appeal Nos. 2542 of 2006 and 957 of 2010observed as follows:-
"There is a conflict of opinion between two Benches, of the Customs, Excise and Service Tax Appellate Tribunal (herein after referred to as "the Tribunal”).
In appeal No. E/394/01, the Tribunal passed an order on 19 th July 2005 - 2005-TIOL-1243-CESTAT-MUM holding that the vehicles manufactured by the assessee falls under Entry 87.02.00 of the Central Excise Tariff Act, 1985 (hereinafter referred to as "the Act”).
However, in Appeal No. E/2053/05, decided on 7 th December 2009 - 2010-TIOL-128-CESTAT-MUM, the Tribunal has taken the view that the vehicles manufactured by the assessee falls under Entry 87.03.00 of the Act.
Since two Benches of the same strength of Members have taken two conflicting views, we are of the opinion, that judicial discipline requires that instead of disagreeing with the view taken by the first Bench, the appropriate course for the second Bench would have been to refer the matter to a larger Bench. This is the basic requirement of judicial discipline. Since this has not been done, we set aside both orders and remand both the appeals back to the Tribunal and request its President to constitute a larger Bench of three Members to decide the issue whether the vehicles manufactured by the Assessee falls under Entry 87.02.00 or 87.03.00 of the Act."
Pursuant thereto, the matter was heard by the Larger Bench of the Tribunal.
Elaborate submissions were made by the appellant and the Special Consultant for the Revenue.
After considering the submissions made by both sides, the relevant chapter notes and heading description, Motor Vehicles Act & Maharashtra Motor Vehicle Rules, 1989, the Larger Bench observed -
"From the various arguments made by both the sides, it appears to us that the matter needs careful and detailed examination with the assistance of a technical expert such as ARAI, Pune or Vehicle Research and Development Establishment, Ahmednagar, or some other recognized testing agency to confirm whether the motor vehicles manufactured by the appellant satisfy the specifications/criteria laid for transport vehicles for the carriage of passengers under the Motor Vehicle laws of the country. In the absence of such an expert opinion or advice, we are handicapped in taking a final view on the classification issue before us . Therefore, in our considered opinion, the matter needs to go back to the adjudicating authority for re-examination of the issues afresh, preferably with the assistance of an expert body, as to what constitutes the seating capacity of a vehicle, to consider the standards of automobile industry and what are the relevant specifications thereof which needs to be complied with by a manufacturer of motor vehicles. Accordingly, we remand the matter back to the adjudicating authority for fresh consideration, keeping all issues open. Since the issue involved pertains to the classification of the motor vehicles manufactured by the units of the appellant at Kandivli and Nashik, falling in different central excise jurisdictions, it is desirable to appoint a common adjudicating authority to decide the matter as has been done earlier. The learned Counsel for the appellant had also raised a point that the department had obtained certain additional information from the Transport Commissioner, copies of which were not given to them. If this is true, then it is necessary that the appellant be given copies of the reports/information received from the Transport Commissioner so that there is complete transparency while adjudicating the matter. The appellant is also directed to co-operate with the adjudicating authority in getting the expert opinion by providing all drawings and technical specifications adopted by them while manufacturing the vehicle and if the said models are still in manufacture, to make the vehicle available for inspection/testing. Since the matter is very old, we direct the adjudicating authority to complete the adjudication process as expeditiously as possible…."
The appeals were allowed by way of remand keeping all issues open.
In Command : The vehicles available, if any, would be almost twenty four years old! Someone is going to have the last laugh before round two begins…
(See 2015-TIOL-676-CESTAT-MUM-LB)
