1994 (1) TMI 152 - AT - Central Excise

Issues Involved:
1. Classification of 'Go-kart' under Central Excise Tariff.
2. Whether 'Go-kart' qualifies as a motor vehicle.
3. Applicability of trade and commercial understanding for classification.
4. Consideration of alternative classification under Heading 95.08.
5. Applicability of time bar for demand of duty.

Issue-wise Detailed Analysis:

1. Classification of 'Go-kart' under Central Excise Tariff:
The appellants contested the classification of 'Go-kart' under chapter sub-heading 8703.00 of Central Excise Tariff, 1985, which pertains to 'Motor cars & other Motor vehicles principally designed for the transport of persons.' The appellants argued that 'Go-kart' is designed for amusement purposes, not for transporting persons, and thus should not fall under this heading. However, the ld. Collector confirmed the classification and the consequent duty demand based on the department's adopted classification.

2. Whether 'Go-kart' qualifies as a motor vehicle:
The appellants argued that 'Go-kart' is not roadworthy, lacks essential features of a motor vehicle (like gears, reverse gear, lights), and is not certified by the Automobile Research Association of India (ARAI) for road use. They cited the definition of 'motor vehicle' under Section 2(18) of the Motor Vehicles Act, 1939, which includes vehicles adapted for use upon roads. The ld. Collector, however, held that the 'Go-kart' is similar to a 'Golf-car' and does not require road-worthiness for classification under sub-heading 8703.00.

3. Applicability of trade and commercial understanding for classification:
The appellants contended that 'Go-kart' should be classified based on its use for amusement, not as a motor vehicle. They cited rulings that emphasize the need to consider consumer association and trade understanding for classification. The ld. Collector did not provide evidence of trade and commercial understanding of 'Go-kart' as a motor vehicle. The appellants' technical specifications and the ARAI's letter supported their claim that 'Go-kart' is not designed for road use.

4. Consideration of alternative classification under Heading 95.08:
The appellants suggested that 'Go-kart' should be classified under Heading 95.08, which includes 'roundabouts, swings, shooting galleries and other fairground amusements.' The ld. Collector did not consider this alternative classification. The Judicial Member proposed remanding the matter to consider this alternative classification, while the Technical Member dismissed the appeal, stating that the 'Go-kart' is correctly classified under Heading 87.03.

5. Applicability of time bar for demand of duty:
The appellants argued that they were under a bona fide belief that 'Go-kart' is an amusement item and not a motor vehicle, and thus the benefit of time bar should be extended to them. The Technical Member dismissed this plea, stating that the appellants manufactured goods without a license and without the department's knowledge.

Separate Judgments:
- Judicial Member's Judgment: The Judicial Member, S.L. Peeran, proposed remanding the matter to the lower authorities to reconsider the classification of 'Go-kart' under Heading 95.08 and to reassess the classification of the impugned goods.
- Technical Member's Judgment: The Technical Member, P.C. Jain, disagreed with the Judicial Member, stating that adopting the definition of 'motor vehicle' from the Motor Vehicles Act for interpreting the Central Excise Tariff is not appropriate. He held that 'Go-kart' is correctly classified under Heading 87.03 and dismissed the appeal.
- Concurring Judgment: Member K.S. Venkataramani agreed with the Technical Member, emphasizing that 'Go-kart' meets the criteria for classification under Heading 87.03 based on its specifications and intended use. He dismissed the appeal.

Final Order:
In view of the majority opinion, the appeal was dismissed.

← Previous Next →