2006 (10) TMI 327 - AT - Central Excise

Summary

Issues:
Dispute over the seating capacity of a motor vehicle for classification under Central Excise Tariff Act, 1985.

Analysis:
The appellants, engaged in manufacturing motor vehicles, faced a dispute concerning the seating capacity of their model "Mahindra Armada" for classification under chapter heading No. 8702.00 of the Central Excise Tariff Act, 1985. The crux of the issue revolved around whether the seating capacity was indeed 10 or less. The Advocate for the appellants argued that the Transport Commissioner and Automotive Research Association of India had certified the vehicle's seating capacity as 10, as per the Budget 1996-97 clarification. The Tribunal's past decision in a similar case favored relying on the Transport Commissioner's certificate over the Maharashtra Motor Vehicle Rules. The Commissioner's rejection of the seating capacity claim based on specific rules was deemed inapplicable by the Tribunal, further supported by the decision in Leisureland Pvt. Ltd. v. CCE, Calcutta. The appellants sought a waiver of pre-deposit based on these grounds.

The Respondent, however, contended that the issue in the present case differed from the Tribunal's past decision, emphasizing that the Automotive Research Association of India's certificate did not pertain to the Maharashtra Motor Vehicle Rules and its competency to certify seating capacity. Reference was made to various rules specifying vehicle dimensions, seating per person, and payload capacity, arguing that the vehicle did not meet these parameters. Additionally, the department's appeal against the Tribunal's past decision was highlighted, suggesting that the appeal's admission implied a stay on the judgment, as per legal precedents.

Upon review, the Tribunal found that the Maharashtra Motor Vehicle Act or Rules were irrelevant for determining a vehicle's classification. Certificates from the Transport Commissioner and Automotive Research Association of India, aligning with CBEC instructions, supported the appellants' claim of a 10-seating capacity. The Tribunal clarified that the vehicle was not intended for stage carriage, as per the defined rules, and the Commissioner's basis for disputing the capacity was unfounded. Regarding the appeal admission, the Tribunal noted that stay had been denied in the revenue's appeal, indicating that admission did not equate to an automatic stay. Consequently, the Tribunal ruled in favor of the appellants, waiving the pre-deposit of duty and penalty and staying recovery pending appeal disposal.