1989 (3) TMI 234 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Maruti Van under Notification No. 20/84-C.E.
2. Time-bar of the demand raised by the Department.

Issue-wise Detailed Analysis:

1. Classification of Maruti Van under Notification No. 20/84-C.E.:

The primary issue in this appeal was whether a Maruti Van could be considered a "saloon car" under Notification No. 20/84-C.E., dated 1-3-1984. The appellants manufactured tyres and supplied them to Maruti Udyog Ltd. (MUL) for use in Maruti Vans, availing of the concessional rate prescribed by the Notification. The Department contended that a Maruti Van is not covered by the expression "saloon car" in the Notification and demanded duty at a higher rate. The Collector of Central Excise adjudicated that a Maruti Van could not be considered a saloon car and thus, the tyres supplied for vans were not eligible for concessional duty.

The appellants argued that the Maruti Van should be considered a saloon car, referring to the dictionary meaning of "saloon car" and the fact that the Motor Vehicle Authorities registered the Maruti Van as a saloon car. They also submitted affidavits from individuals dealing with Maruti Cars and Vans, which were ignored by the Collector. The appellants emphasized that the measurements of the tyres for Maruti Cars and Vans were the same, with only a difference in ply rating.

The Department argued that the term "saloon car" should be understood in trade parlance rather than dictionary meanings. They also contended that the explanation in the amended Notification could not retrospectively classify vans as saloon cars.

The Tribunal examined the dictionary definitions of "saloon car" and "van," concluding that a saloon car is a motor car with a closed body and no partition behind the driver, while a van is a covered vehicle for transporting goods. The Tribunal noted that the affidavits provided by the appellants were unchallenged and supported the classification of the Maruti Van as a saloon car. The Tribunal also considered the registration of the Maruti Van as a saloon car by Motor Vehicle Authorities and the Explanatory Notes of the Customs Co-operation Council, which classified vehicles with closed bodies and used for transporting persons as saloon cars.

The Tribunal held that based on dictionary meanings, affidavits, and the practice of Motor Vehicle Authorities, the Maruti Van should be considered a saloon car for the purposes of Notification No. 20/84.

2. Time-bar of the demand raised by the Department:

The appellants contended that the demand was time-barred as the show cause notice was issued on 4-9-1985 for the period 25-5-1984 to 16-1-1985. The Collector did not provide a finding on the applicability of the extended period of limitation but noted that there could have been a genuine doubt about the van tyres being entitled to concession. The Tribunal observed that in the absence of suppression or mis-statement of facts, the extended time limit could not be justified. Consequently, the demand was held to be time-barred as the show cause notice was issued more than six months after the clearance of the tyres.

Conclusion:

The Tribunal allowed the appeal on both merits and the question of limitation, concluding that the Maruti Van could be considered a saloon car under Notification No. 20/84 and that the demand was time-barred.