2014 (1) TMI 115 - AT - Central Excise

Classification of Vehicles Classified under sub-heading No. 8704 21 90 of Central Excise Tariff as motor vehicles for transportation of goods OR under sub-heading No. 8703 33 99 Waiver of Pre-deposit Held that - The chapter note relating to station wagon was not in existence - the decision of the Tribunal came for the period between 1996-2000, the chapter note relating to station wagon was not incorporated in the Tariff and the Chapter Heading 8703 did not include expression including station wagon - There was no occasion for the Tribunal to consider the impact of introduction of chapter note relating to station wagon and the impact of non-inclusion of expression station wagon in the chapter Heading - The distribution of weight cannot be a consideration - weight allocation for transportation of goods is more than the weight allocation for persons cannot be a consideration. The appellants have not made out a prima facie case in their favour - the case has to be heard in much greater detail and much more analytical study statutory and other provisions are required to be made and further more detailed consideration of all the records is also required - the appellants directed to deposit Rupees Twenty crores as pre-deposit upon such submission rest of the duty to be waived till the disposal partial stay granted.

Summary

Issues Involved:
1. Correct classification of "Mahindra Bolero Camper" and its variants under Central Excise Tariff.
2. Applicability of previous Tribunal decisions and statutory definitions to the current classification dispute.
3. Determination of whether the vehicles are principally designed for the transport of persons or goods.

Detailed Analysis:

1. Correct Classification of "Mahindra Bolero Camper" and Its Variants:
The central issue in these appeals is the classification of "Mahindra Bolero Camper" vehicles under the Central Excise Tariff. The appellant classified the vehicles under sub-heading No. 8704 21 90 as 'motor vehicles for transportation of goods' effective from 1-7-2008. The Revenue, however, proposed reclassification under sub-heading No. 8703 33 99, demanding differential duty. The vehicles in question have variants with specific seating capacities and payloads, indicating a design for both passenger and cargo transport.

2. Applicability of Previous Tribunal Decisions and Statutory Definitions:
The appellant referenced a previous Tribunal decision in the case of M/s. TELCO Ltd., which classified similar vehicles under Heading 8704. However, this decision pertained to a period before the introduction of Chapter Note 6 in 2000, which defined "station wagon" as vehicles used for transporting both persons and goods without structural alteration. The Tribunal noted that the earlier decision did not consider the impact of this Chapter Note and the exclusion of "station wagon" from Heading 8703 at that time.

3. Determination of Whether the Vehicles Are Principally Designed for the Transport of Persons or Goods:
The Commissioner concluded that the vehicles should be classified under Heading 8703 based on several grounds:
- The vehicles feature luxurious seating, seat belts, air conditioning, and a strong cargo box, suggesting they are designed for long, luxurious drives with incidental cargo transport.
- The appellant had classified the vehicles under Heading 8703 from 2000 to 2008, indicating a belief that the vehicles were "station wagons."
- Photographs and product catalogues emphasized the vehicles' suitability for passenger transport over goods transport.
- The Commissioner rejected the appellant's argument that the vehicles' higher cargo weight capacity indicated a goods transport design, noting that passenger transport requires more space than goods transport.
- Advertisements and descriptions of the vehicles highlighted their suitability for adventure seekers and luxurious travel, further supporting the classification as "station wagons."

The Tribunal found that the appellant had not made a prima facie case for reclassification under Heading 8704. It emphasized the need for a detailed analysis of statutory and other provisions and a thorough review of all records. Consequently, the Tribunal ordered the appellant to deposit Rs. 20 crores as a pre-deposit within six weeks, with a stay on the recovery of the balance dues during the pendency of the appeals.

Conclusion:
The Tribunal upheld the Revenue's classification of "Mahindra Bolero Camper" vehicles under Heading 8703, based on their design and features primarily for passenger transport, with incidental cargo capacity. The decision considered statutory definitions, previous Tribunal rulings, and the vehicles' advertised features, leading to a requirement for a substantial pre-deposit by the appellant pending further detailed hearings.