2015 (11) TMI 962 - SC - Central Excise

Classification of goods - three wheeled tractor which are known as Auto Track and semi-trailer - Classification under Chapter Heading 8701 or under Chapter Heading 8704 - Classification of three wheeled tractor or auto trailor - Held that - Tribunal found that the Commissioner while relying upon the earlier decision of the Tribunal ignored the fact that on the first occasion, when the matter was remanded, the Tribunal itself had observed that the new tariff did find the meaning of the tractor and also that positive evidence would be necessary to make them depart from its earlier view. It further found that the Revenue had not disputed that it is immaterial whether vehicle in question comprising of hauling unit and semi trailer is cleared together or separately which is clear from Chapter Note 2. - classification under Chapter Heading 87.01 and not under heading 84.04 upheld - Decided against Revenue.

Summary

Issues: Classification of goods as three-wheeled tractor or auto trailer under Chapter Heading 8701 or 8704.

In this judgment, the primary issue revolves around the classification of goods, specifically whether they should be categorized as a three-wheeled tractor or an auto trailer under Chapter Heading 8701 or 8704. The respondent-assessee claimed that the product should be classified as a tractor under Tariff Item 34 (II) of the erstwhile Tariff. However, the Department disagreed, asserting that the goods should be treated as a Light Motor Vehicle (LMV) for goods carriage under Chapter Heading 8704.

The Department issued a show cause notice and passed an Order-in-Original confirming the demand based on their classification. The respondent appealed to the Commissioner, who upheld the Department's decision, considering the auto track manufactured by the assessee as an articulated vehicle falling under Chapter Heading 8704. The Customs, Excise and Service Tax Appellate Tribunal (Tribunal) later overturned the Commissioner's order, emphasizing that the vehicle in question comprised a hauling unit and semi-trailer, which could be cleared together or separately under Chapter Note 2.

The Tribunal found that the vehicle should be classified as an articulated motor vehicle under Chapter Heading 8701, supported by the automotive dictionary's definition of articulated motor vehicle. The Tribunal also referenced opinions from VRDE and VRIA, indicating that the vehicle was a tractor and not an LMV. Additionally, the Tribunal highlighted that the goods were solely used to haul another trailer, lacking payload capacity to transport goods independently. The judgment cited a previous case involving Volvo India Pvt. Ltd., where similar goods were classified under Chapter Heading 87.01, reinforcing the classification decision.

Upon hearing arguments from both parties, the Court found no merit in the appeal and dismissed it, affirming the classification of the goods under Chapter Heading 8701 as an articulated motor vehicle.