2002 (2) TMI 717 - AT - Central Excise

Issues Involved:
1. Classification of 'Tata Mobile 207 Model Crew Cab' vehicles.
2. Classification of 'Mahindra Utility Double Cab' vehicles.
3. Determination of whether vehicles are designed for transport of persons or goods.
4. Application of the Harmonized System of Nomenclature (HSN) and Central Excise Tariff Act (CETA) interpretations.
5. Consideration of end-use in classification.

Summary:

Issue 1: Classification of 'Tata Mobile 207 Model Crew Cab' Vehicles
The Commissioner had classified 'Tata Mobile 207 Model Crew Cab' vehicles u/s 8704.20 at 15%, considering them as goods transport vehicles. The Revenue appealed, arguing these vehicles should be classified u/s 8703 as they are "principally designed and meant for transport of not more than six persons." The Revenue contended that the vehicle's features, such as seating arrangements and side windows, indicated it was designed for passenger transport. The Tribunal examined the payload distribution and found that a significant portion was allocated for cargo, affirming the classification under 8704.

Issue 2: Classification of 'Mahindra Utility Double Cab' Vehicles
The Commissioner (Appeals) had classified 'Mahindra Utility Double Cab' vehicles u/s 8703.90, treating the price as cum-duty price. M/s. Mahindra & Mahindra appealed, arguing the classification should be u/s 8704. The appellants claimed the design features indicated the vehicle was intended for goods transport, not passenger transport. The Tribunal analyzed the vehicle's payload distribution and design features, concluding it was primarily designed for transporting goods, thus classifiable under 8704.

Issue 3: Determination of Vehicle Design for Transport of Persons or Goods
The Tribunal emphasized that classification should be based on the vehicle's design rather than its end-use. It referred to the Harmonized System of Nomenclature (HSN) and Central Excise Tariff Act (CETA) interpretations, which guide that vehicles designed with a major portion of their gross vehicle weight for cargo should be classified under 8704. The Tribunal found that both 'Tata Mobile 207 Model Crew Cab' and 'Mahindra Utility Double Cab' vehicles had significant cargo capacity, supporting their classification under 8704.

Issue 4: Application of HSN and CETA Interpretations
The Tribunal considered the HSN Explanatory Notes and previous decisions, noting that while HSN notes are not legally binding, they have persuasive value. The Tribunal rejected the Revenue's argument that the World Customs Organisation's (WCO) classification opinions should be disregarded, citing previous cases where WCO opinions were considered authoritative. The Tribunal applied the logic of HSN classification, which aligns with the CETA terminology of "principally designed."

Issue 5: Consideration of End-Use in Classification
The Tribunal concluded that end-use is not a relevant criterion for classification when the tariff entry does not specify such use. It analyzed statements from end-users and found that the predominant use of the vehicles was for transporting goods, not passengers. The Tribunal dismissed the Revenue's reliance on isolated advertisements and non-representative user statements, affirming the vehicles' classification under 8704 based on their design and predominant use.

Conclusion
The Tribunal ordered the classification of both 'Tata Mobile 207 Model Crew Cab' and 'Mahindra Utility Double Cab' vehicles under 8704, dismissing the Revenue's appeal and allowing M/s. Mahindra & Mahindra's appeal with consequential relief as per law.

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