2018 (2) TMI 374 - AT - Central Excise

Classification of goods - whether Armada vehicle manufactured by the appellant was 10 seater vehicle falling under Tariff Heading 8702 or below that to be classified under Tariff Heading 8703? Held that - Mere assumption that Armada vehicle had sitting capacity below 10, does not make the adjudication sustainable. Ld. adjudicating authority did not conduct physical verification of the vehicle nor the vehicle was sent to the Motor Vehicle authority to ascertain the seating capability thereof, for a proper classification - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of the vehicle "Armada" under Tariff Heading 8702 or 8703 based on seating capacity. Validity of show cause notice and lack of evidence for classification. Influence of previous adjudication on the present case. Compliance with legal requirements for adjudication process.

Analysis:
The judgment revolves around the classification of the vehicle "Armada" under Tariff Heading 8702 or 8703 based on seating capacity. The Tribunal noted that despite multiple opportunities given to the Revenue, no evidence was presented to support the classification. The show cause notices lacked specific reasons and evidence regarding the classification, rendering the adjudication process futile. The Tribunal emphasized the importance of a proper foundation through a valid show cause notice for a sustainable adjudication.

The Tribunal criticized the issuance of the show cause notice without substantial evidence or legal basis. It highlighted that allegations should be supported by independent inquiries and technical examinations, which were lacking in this case. The Tribunal expressed dissatisfaction with the hypothetical demands made and referred to previous Supreme Court judgments emphasizing the significance of a well-founded show cause notice in the adjudication process.

Furthermore, the Tribunal pointed out that the Revenue's reliance on a previous adjudication without conducting an independent inquiry on the "Armada Vehicle" was inappropriate. Allegations related to a different vehicle cannot automatically apply to the present case. The lack of technical examination or consultation with the Motor Vehicle authority regarding seating capacity deprived the appellant of a fair opportunity to defend their case.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal based on the absence of concrete evidence, improper issuance of the show cause notice, and failure to adhere to legal requirements for a valid adjudication process. The judgment underscores the necessity of a well-supported foundation, independent inquiries, and technical evaluations in classification disputes to ensure a fair and just adjudication process.