Supreme Court of India
COMMISSIONER OF CENTRAL EXCISE, T.N.versusM/S VINAYAGA BODY BUILDING INDUSTRY LTD.
- Citation
- 2008 INSC 300
- Decided
- 4 March 2008
- Disposal
- Case Allowed
- Bench
- S B SINHA
Holding
Motor cabs with a seating capacity of 12 passengers plus driver are to be classified under sub‑heading 8702.10, rendering the National Calamity Contingency Duty payable.
Summary
The respondent, Vinayaga Body Building Industry Ltd, manufactured motor cabs on duty‑paid chassis with a seating capacity of 12 passengers plus a driver. The chassis were invoiced by the manufacturer under sub‑heading 8706.29, but the Revenue classified the completed cabs under sub‑heading 8702.10, attracting a 1% National Calamity Contingency Duty (NCCD) and penalty. The respondent argued, using job cards, that the cabs were designed for 16 seats and should fall under sub‑heading 8702.90, which is exempt from NCCD; the Tribunal accepted this view. On appeal, the Supreme Court examined the actual seating capacity, registration certificates, and the fact that body‑building on a chassis constitutes independent manufacturing. It held that the cabs, having a seating capacity of 12 + 1, must be classified under sub‑heading 8702.10, making NCCD payable, and rejected the reliance on chassis invoices and fresh job‑card evidence. The appeal was allowed, setting aside the Tribunal’s order.
Issues considered
- Whether motor cabs built on duty‑paid chassis with a seating capacity of 12 + 1 fall under sub‑heading 8702.10 or 8702.90 of the Central Excise Tariff Act, 1985.
- Whether National Calamity Contingency Duty is payable on such cabs.
- Whether classification can be based solely on the chassis invoice or must consider actual seating capacity and registration certificates.
- Whether job‑cards introduced as fresh evidence can be relied upon for tariff classification.
Legislation cited
- Central Excise Act, 1944s. 11-A
- Central Excise Rules, 1944s. 4(1)
- Central Excise Tariff Act, 1985s. 8702.10, s. 8702.90, s. 8706.29
- Finance Act, 2003
- Motor Vehicles Act, 1988s. 2(22)
Subjects
central exciseclassificationtariffmotor cabsmaxi cabNational Calamity Contingency Dutyseating capacityregistration certificatejob worksub‑heading 8702.10sub‑heading 8702.90
Judgment
[2008] 3 S.C.R. 911
COMMISSIONER OF CENTRAL EXCISE, T.N. A
t
v.
M/S VINAYAGA BODY BUILDING INDUSTRY LTD.
(Civil Appeal No. 2833 of 2006)
MARCH 4, 2008
B
(S.B. SINHA AND V.S. SIRPURKAR, JJ.)
Central Excise Tariff Act, 1985:
Chapter 87 - Sub Heading 8702.10 - Manufacture of
motor cabs. on duty paid chassis - Cl~ssification of - Levy of c
National Calamity Contingency Duty - Assesse-manufacturer
of motor cabs, relying on classification of chassis under Sub-
Heading 8702. 90 and claiming the same classification for
motor cabs as well - Also relying on job cards - HELD:
Investigation carried out and the documents revealed that Sub- D
~ Heading 8702.10 was applicable - Further, payability of duty
would depend on registration certificates in respect of vehicle
in question - Relevant factor is seating capacity for which
registration certificate had been granted and not the opinion
of,inanufacturer of chassis ....: Similarly, stand of assessee E
based on job-work rightly rejected - Revenue rightly classified
motor cabs in question under Sub-Heading 8702.10 - Central
Excise Act, 1944-s.11-A- Central Excise Rules, 1944-r4(1).
The respondent was engaged in manufacture of
motor cabs on duty paid chassis, with a seating capacity F
.. of 12 passengers and 1 driver. The manufacturers of
chassis in their invoices placed the said goods under
Sub-Heading 8706.29 of Chapter 87 of Central Excise Tariff
Act, 1985. The Revenue classified the motor cabs under
· · Sub-Heading 8702.10 and issued a show cause notice G
calling
. upon the respondent to pay one . percent National
.
Calamity Contingency Duty for the period 1.3.2003 to
30.9.2003, in terms ofs.11-Aofthe Central Excise Act, 1944
"' read with Rule 4(1) of the Central Excise Rules, 1944 along
911 H
912 SUPREME COURT REPORTS (2008] 3 S.C.R.
A with the penalty at the prescribed rate: The respondent
1
filed an appeal contending that the motor cabs
manufactured by it were classifiable under Sub-Heading
8702.90 as indicated in the invoices of manufacturers and
further the job cards issued also showed that the orders .
B were for fabrication of more than 16 seats in the cab. The
appellate authority declined to interfere, but the Customs
Excise and Service Tax Appellate Tribunal set aside the -
demand.
In the instant appeal filed by the Revenue, it was
C contended for the appellant that the Tribunal erred in
classifying the goods under Sub-Heading 8702.90 on the
basis of the invoices issued by the manufacturers of
chassis.
Allowing the appeal, the Court
D
HELD: 1.1 The respondent-assessee during the ~
period in question was stated to have manufactured 87
maxi cabs. An investigation in regard to the number of
seats of the said vehicles carried out, showed that the
E assessee had built maxi cabs with seating capacity of 12
+ 1 and not 16 + 1. Documentary evidences were also
collected by the revenue from various customers. Sub-
Head i ng 8702.10 would, therefore, be applicable.
[para 15, 18) [918-8, C, E]
F 1.2 Sub-Heading 8702.10 specifies for a vehicle
designed for the transport of more than six persons but •
not more than twelve persons excluding the driver. It is
also a 'cab' within the meaning of the provisions of the
Motor Vehicles Act. [para 19] [918-F, G]
G
1.3 The finding that the respondent manufactured
bodies for user thereof for maxi cabs with seating
capacity of 12 persons excluding the driver is a finding of _,
fact. Only because the manufacturers of chassis had
classified the said goods under Sub-Heading 8702.90, the
H
COMMISSIONER OF CENTRAL EXCISE, T.N. v. M/S 913
VINAYAGA BODY BUILDING IND. LTD. [S.B. SINHA, J.]
same having regard to the independent manufacturing A
I-
activities carried on by the respondent, was not decisive.
For good and sufficient reasons, the claim raised on
behalf of the assessee with reference to the job-work had
been rej~cted. [para 19] [918-G, H; 919-A]
1.4 The question in regard to the payability of duty B
would furthermore depend upon the registration
certificates in respect of the vehicle in question. It is a
statutory document granted under the provisions of the
Motor Vehicles Act, 1988. Such a certificate is issued upon
an inspection of the vehicle by the authorities of the c
transport department. On a chassis classifiable under
Sub-Heading 8706.29, the manufacturer can make a body
thereupon having regard to the nature of orders placed
by their customers. In a given case, it may be of sixteen
seating capacity but it may be more or less than the same D
., in some other cases. What is, therefore, relevant is the
seating capacity for which the registration certificates had
been granted and not the opinion of the manufacturer of
the chassis. [para 19] [919-8, C, D]
CIVlLAPPELLATE JURISDICTION: Civil Appeal No. 2833 E
of 2006
From the Judgmnet and final Order No. 1313/2005 dated
22/9/2005 of the Customs, Excise & Service Tax Appellate
Tribunal, South Zonal Bench, Chennai in Appeal No. E/616/2005. F
Mohan Parasaran, A.S.G., Arijit Prasad,. Krishna Kumar
" and B. Krishna Prasad for the Appellant.
S. Nanda Kumar, Satish Kumar, S. Ananda Krishna Raj
and V.N. Raghupathy for the Respondent.
G
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Classification of the motor cabs
....
manufactured by the respondent is the question involved in this
appeal, which arises out of a judgment and order dated
H
914 SUPREME COURT REPORTS [2008] 3 S.C.R.
A 22.09.2005 passed by the Customs, Excise and Service Tax 1
Appellate Tribunal, South Zonal Bench, Chennai in Appeal No.
E/616 of 2005.
2:Respondent is engaged in body building on duty paid
chassis. Indisputably, it amounts to manufacture within the
8 meaning of Note 3 of Chapter 87 of Central Excise Act, 1944
(for short "the Act"), which is in the following terms: ...
"3. For the purposes of this Chapter, building a body or
fabrication or mounting or fitting of structures or equipment
c on the chassis falling under heading No. 87.06 shall
amount to 'manufacturer' of a motor vehicle."
3. For carrying out its manufacturing activities, the
respondent purchased duty paid chassis from Tata Motors Ltd.
The seating capacity of the cabs for which the body building
D activity was being carried out by the respondent is 12 + 1 (i.e.
12 passengers and one driver).
4. Indisputably, National Calamity Contingency Fund was
created by Finance Act, 2003 wherefor inter alia it was proposed
E to impose one per cent duty on motor cars and multi utility
vehicles.
5. The manufacturers of chassis in their invoices placed
the said goods under Sub-Heading 8706.29.
Appellant, however, classified the said motor cabs under
F Sub-Heading 8702.90 which has been specified for payment
of National Calamity Contingency Duty (NCCD) at one per cent "
for the period 1.03.2003 to 30.09.2003. Admittedly the said duty
was not paid.
G 6. A show cause notice was issued calling upon the
respondent to show cause as to why an amount of Rs. 4,42,823/
- should not be recovered from them in terms of Section 11A of
the Central Excise Act read with Rule 4(1) of the Central Excise .,-
Rules towards NCCD at one per cent on the motor vehicles
H wit~ seating capacity of more than 6 but less than 12, excluding
COMMISSIONER OF CENTRAL EXCISE, TN. v. M/S 915
VINAYAGA BODY BUILDING IND. LTD. [S.B. SINHA, J.]
~ driver's seat as also a penalty and interest thereupon. Cause A
was shown to the said notice by the respondent.
7. By an order dated 29.11.2004, the assessing authority
confirmed the demand of Rs. 4,42,823/-. A penalty for an amount
·of Rs. 5000/- was also imposed at the prescribed rate. It was
furthermore directed that on the said amount of duty interest B
-..i shall be payable.
8. An appeal was preferred thereagainst by the respondent
contending that the job cards issued by them indicate that the
orders were for fabrication of more than 16 seats in the cab C
and as such thereby the 'goods' manufactured by them should
be classified under Sub-Heading 8702.90 wherefor no NCCD
was payable.
The said contention was rejected by the appellate authority D
't in terms of its judgment dated 18.04.2005 holding:
"The evidences of job cards produced at the time of
personal hearing cannot be relied upon by them as the
same are new evidences in the form of new plea which
were not produced before the Lower Authority that cannot E
be entertained at this stage as held by the Hon'ble
Supreme Court in the case of Naharwar Engg. Works Vs.
UOI reported in 2002 (143) ELT 34(SC). Further the
Hon'ble Apex Court in the case of Krishna Steel Industries
Vs. CCE Patna reported in 2004 (172) ELT 305Authority F
or Tribunal, the same cannot be allowed to be relied upon".
Applying the ratio of the above decision, I, therefore, reject
this fresh plea/ evidences put forth for the first time by the
appellants.
10.3 Even presuming without admitting that these job G
cards are fresh evidences, these cannot be relied upon in
the matter of classification of said vehicles in the CETA
1985 inasmuch as the heading No. 87.02 and 87.03 have
been aligned on the basis of Motor Vehicles Act, 1988
H
916 SUPREME COURT REPORTS [2008] 3 S.C.R.
A based on passenger carrying designed for the transport 1
of 12 + 1 persons" by the State Transport Authorities as
discussed in para 8 supra."
9. As noticed hereinbefore, an appeal preferred
thereagainst by the respondent before the Tribunal has been
8
allowed stating:
"3. It is not disputed that the seating capacity of the vehicles
manufactured by the appellants was more than 12,
excluding the driver. Hence the vehicles were classifiable
c under SH 8702.90 only. The chassis (from Mis Tata Motors
Limited) used by the appellants was classified by its
manufacturer under SH 8706.29 vide invoices of Mis. Tata
Motors Limited. The Tariff entry (8706.29) also clearly
indicates that chassis falling thereunder is meant for motor
D vehicles of SH 8702.90. Hence there is no question of the
appellants' product being classified under SH 8702.10
and demanded NCCD is set aside. The appeal is
allowed."
10. Mr. Mohan Parasaran, learned Additional Solicitor
E General appearing on behalf of the appellant, would submit that
the Tribunal committed a serious error in passing the impugned
judgment insofar as it proceeded to determine the issue relying
only on or on the basis of the invoice issued by the manufacturer
of chassis, which is impermissible in law.
F
11. Mr. S. Nanda Kumar, learned counsel appearing on
behalf of the respondent, on the other hand, submitted that not
only the manufacturer of chassis; even the job cards produced
by the respondent would clearly show that NCCD was not
G payable.
12. Chapter 87 of the Act as applicable in the year 2003
contains the heading "Vehicles other than Railway or
Tramway Rolling Stock and Parts and Accessories thereof'. -<
Sub-Headings 8702.10, 8702.90 and 8706.29 thereof read as
H under:
COMMISSIONER OF CENTRAL EXCISE, T.N. v. MIS 917
VINAYAGA BODY BUILDING IND. LTD. [S.B. SINHA, J.]
"Heading Sub-heading Description of Rate of A
No. No. goods duty
87.02 Motor vehicles principally
designed for the transport
of more than six persons, B
excluding the driver,
includinf.1 station wagons.
8702.10 Motor vehicles principally 16%
designed for the transport
of more than six persons,
but not more than twelve
c
persons, excluding the
driver, including station
wagons
8702:90 Other 16%
D
87.06 Chassis fitted with
engines, for the motor
vehicles of heading
Nos. 87.01 to 87.05
8706.29 For the vehicles of sub 16% plus E
. heading 8702.90 Rs.
10,000
per
chassis"
13. A"maxi cab" has been defined in Section 2(22) of the F
1 Motor Vehicles Act, 1988 to mean:
"(22) "maxi cab" means any motor vehicle constructed or
adapted to carry more than six passengers, but not more
than twelve passengers, excluding the driver, for hire or G
reward;"
14. Indisputably, body building of chassis amounts to
Y manufacturing. It falls under Heading 87.06. The question,
therefore, which arises for consideration is as to whether a maxi
cab should be classified under the respective tariff heads, i.e., H
918 SUPREME COURT REPORTS [2008] 3 S.C.R.
A 87.02 to 87.05 of Central Excise Tariff Act, 1985 or under the 1
Chapter Heading 87.07?
15. Indisputably, again NCCD was imposed at the rate of
one per cent advalorem on the goods falling under Sub-
Headings 8702.10, 8703.90 and 8704.90.
B
Respondent during the period in question allegedly
manufactured 87 numbers of maxi cabs. An investigation in ""
regard to the number of seats of the said vehicle was carried
out. Statements of two of the officers of the respondent, viz., S.
c Balamurugan and P.V. Subbaraj were recorded wherefrom it
appeared that the respondent had built maxi cabs with seating
capacity of 12 + 1 and not 16 + 1. Documentary evidences were
also collected by the revenue from various customers.
16. Respondent inter alia contended that NCCD is paid
D on the chassis supplied by the owners of the motor vehicles
and the intention of the Revenue was to collect the same from
the manufacturers of the chassis and not independent body
builders.
17. The said contention of the respondent was rejected
E inter alia on the premise that the seating capacity of maxi cabs
manufactured by the respondent is 1? + 1 only.
18. Sub-Heading 8702.10 would, therefore, be applicable.
19. Sub-Heading 8702.90 no doubt provides for the
F residuary whereas Sub-Heading 8706.29 refers to the vehicles
falling under Sub-Heading 8702.90. Sub-Heading 8702.10
specifies for a vehicle designed for the transport of more than
six persons but not more than twelve persons excluding the driver.
It is also a 'cab' within the meaning of the provisions of the Motor
G Vehicles Act.
For good and sufficient reasons, in our opinion, the
contention raised on behalf of the respondent with reference to
the job-work prepared by them had been rejected.
H The finding that they manufacture bodies for user thereof
COMMISSIONER OF CENTRAL EXCISE, T.N. v. M/S 919
VINAYAGA BODY BUILDING IND. LTD. [S.B. SINHA, J.]
for maxi cabs with seating capacity of 12 persons excluding the A
driver is a finding of fact. Only because the manufacturers of
chassis had classified them under Sub-Heading 8702.90, the
same having regard to the independent manufacturing activities
carried on by the respondent, was not decisive.
The question in regard to the payabilKy of duty would B
furthermore depend upon the registration certificates in respect
of the vehicle in question. It is a statutory document granted
under the provisions of the Motor Vehicles Act, 1988. Such a
certificate is issued upon an inspection of the vehicle by the
authorities of the transport department. What is relevant was C
the terms of the contract entered into by and between the
respondent and their customers. On a chassis classifiable under
Sub-Heading 8706.29, the manufacturer can make a body
thereupon having regard to the nature of orders placed by their
customers. In a given case, it may be of sixteen seating capacity D
but it may be more or less than the same in some other cases.
What is, therefore, relevant is the seating capacity for which the
registration certificates had been granted and not the opinion
of the manufacturer of the chassis.
20. For the reasons aforementioned, the impugnecj E
judgment cannot be upheld, which is set aside accordingly.
21. The appeal is allowed. However, in the facts and
circumstances of this case, there shall be no order as to costs.
R.P. Appeal allowed. F
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