2017 (9) TMI 64 - AT - Customs

Classification of the imported vehicles - Sportsman Forest Tractor - classified under CTH 87012010 or under CTH 87031090? - The department is of the view that such vehicles are all train vehicles capable of being used not only on road but also in other places like farms, golf course etc. But the claim of the appellant is that the vehicles are constructed essentially for hauling or pushing another vehicle, and satisfy the condition of Note-2 to Chapter 87 and hence classifiable as a Tractor under 8701 - Held that - Only the vehicles which satisfy the Note-2 to Chapter 87 will merit classification under 8701 whereas heading 8703 will accommodate motor vehicles principally designed for the transport of persons. There is no dispute about the fact that Note-2 to Chapter 87 is satisfied by the imported vehicles. On a perusal of the booklet pertains to the imported vehicles, it is easily seen that it can accommodate only one person i.e. driver of the vehicle. The appellant has submitted copies of the tariff ruling by the U.K. as well as that of the European customs authorities wherein identical goods have been classified under heading 8701 9020 in accordance with the General Interpretation Rules as well as Rule 2 to Chapter 87. It is to be recorded that the Indian Customs Tariff is aligned with the HSN and hence the HSN explanatory notes as well as various decisions in connection with the classification of goods under HSN will have persuasive value. The vehicles are rightly classifiable under 8701 2010 as claimed by the appellant in the Bills of entry - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported vehicles under Customs Tariff Headings 87012010 or 87031090, differential duty demand, imposition of penalty, time bar challenge, application before Advance Ruling Authority, suppression of facts.

Classification Issue:
The appeal challenged the reclassification of imported All-Terrain Vehicles from Tariff Heading 87012010 to 87031090 by the Customs Department. The appellant justified the original classification under 87012010 as tractors, citing design features for agricultural use, hauling capabilities, and alignment with international classifications. The Revenue argued for classification under 8703 based on the vehicles' recreational and farm usage features. The Tribunal analyzed technical specifications, noting hauling capacity, off-road design, and single-person seating. It concluded that the vehicles, meeting Note-2 to Chapter 87, were primarily for hauling, justifying classification under 8701 as tractors.

Alignment with International Classifications:
The appellant presented rulings from U.K. and European customs authorities classifying similar vehicles under 8701 9020, aligning with HSN and supporting classification under 8701. The Tribunal considered these rulings, noting the persuasive value of HSN explanatory notes and international decisions. This alignment reinforced the classification under CTH 8701, rejecting the Revenue's reclassification under 8703 1090.

Decision and Outcome:
The Tribunal set aside the impugned order, allowing the appeal on 24.07.2017. It upheld the original classification under 8701 2010, finding no justification for the Revenue's reclassification to 8703 1090. The judgment emphasized the vehicles' hauling nature and alignment with international classifications, leading to the favorable decision for the appellant.

Other Issues:
The appellant also challenged the time bar and suppression allegations, highlighting the withdrawn Advance Ruling Authority application and Customs' knowledge. However, the Tribunal's decision primarily focused on the classification issue, leading to the appeal's success and the original classification's validation under Tariff Heading 8701.