| SooperKanoon Citation | sooperkanoon.com/4898 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Mar-14-1989 |
| Reported in | (1989)(22)ECC348 |
| Appellant | Modi Rubber Limited |
| Respondent | Collector of C. Ex. |
2. Admittedly the tyres were meant for use in the "vans" manufactured by MUL. The Department was of the opinion that a Maruti Van is not covered by the expression "saloon car" occurring in the Notification and initiated proceedings by issuing a show cause notice threatening demand for duty at Tariff rate at Rs. 1.500/- per tyre and special excise duty at Rs. 150/- per tyre whereas the appellants actually paid a total duty of Rs. 143/- per tyre. After due process the Collector of Central Excise adjudicated the case and held that for purposes of Notification No. 20/84-C.E. a Maruti Van cannot be considered to be a saloon car. As a consequence he held that tyres supplied for vans are not eligible to concession of duty under the Notification. He passed suitable orders demanding duty on other tyres also. The Collector desisted from imposing any penalty observing that "since there could have been a genuine doubt and also considering the fact that the Notification was subsequently amended to include Van tyres also as entitled to concession, I do not think the case calls for penalty...".
The appellants, aggrieved by the order are before us in appeal.
3. Shri Ravindra Narain, the learned Advocate for the appellants submitted that the entire demand was time-barred inasmuch as the show cause notice was 'issued on 4-9-1985 for the period 25-5-1984 to 16-1-1985. He submitted that even on merits the impugned order cannot be sustained. Referring to Notification No. 3/85 dated 16-1-1985 the learned Advocate submitted that this Notification added a clarificatory explanation to the original Notification No. 20/84. He submitted that when Notification No. 20/84 was issued on 1-3-1984, MUL did not manufacture the van but only the car. Therefore, the Government could not have anticipated any difficulty. He submitted that if the impugned order is upheld it will result in the imposition of duty of Rs. 1,650/- per tyre instead of Rs. 143/- and this would become confiscatory taxation. He referred to the meaning of saloon car as given in the Concise Oxford Dictionary (page 923) and submitted that the Maruti Van was also a saloon car. The learned Advocate argued that the meaning of a "Van" is immaterial as the issue before us is only whether or not the Maruti Van is a saloon car. Referring to the dictionary meaning the learned Advocate argued that the maruti van is in fact a saloon car.
4. Pointing out that the Tariff or the Notification did not contain any definition of the expression "saloon car" the learned Advocate pleaded that the appellants filed some affidavits before the Collector and these were given by persons who were dealing with Maruti Cars and Vans.
The Collector did not ask for cross-examination of the witnesses and ignored the evidence of the affidavits and other documents filed by the appellants. He produced before us the Registration Book of a vehicle which he stated was a Maruti Van and submitted that according to the Motor Vehicle Authorities who have full knowledge of motor vehicles the van was registered as a saloon car. He submitted that the appellants wrote to the Collector listing all the evidences produced by them as also the reference to the dictionary meanings. A copy of this letter dated 19-7-1988 was in the paper book filed before the Bench. On being questioned the learned Advocate submitted that the measurements of the tyres of the Maruti Car and Maruti Van were the same and the only difference was that the tyres for the Maruti Van were 8-ply whereas for the car it was 6-ply.
5. Shri Ravindra Narain finally submitted that Collector having found and recorded in his order that the Notification was subsequently amended to include van yres also, a charge of suppression or mis-statement of facts could not be sustained against the appellants.
Therefore, the demand, if at all, could be only for six months prior to the date of show cause notice.
6. Shri Chakraborty, the learned JDR opposing the arguments submitted that :he enlarged period of limitation applied to the facts of this case. Inviting our attention o the show cause notice he submitted that as mentioned therein the appellants never tated in the classification list that they were clearing the tyres for vans. He argued that nce a tax is levied the duty liability has to be decided whether it is confiscatory in nave or not. He also argued that the explanation to the amended Notification cannot be terpreted to mean that vans are saloon cars because the words 'will include" enlarged e scope of the words used earlier. He submitted that these words were words of enlar-;ment and cannot give the meaning except in "exceptional cases". The present case was )t such an exception according to the JDR. He submitted that no case has been made I to warrant differing from the general practice.
In this context he referred to the Law ricon 1982 Vol. I by T.P.Mukherjee, page 810. He also argued that the words "will in-ide" occurring in the Notification referred to future and not to past.
7. Shri Chakraborty then argued that when no definition is given resort should made to trade parlance and not to dictionary meanings. On being asked by the Bench to what is a saloon car, the learned JDR submitted that this point has not been spelt out by the Collector and suggested the matter be remanded to the Collector so that he may apply his mind and decide as to what is a saloon car.
8. Referring to the affidavits filed by the appellants the learned JDR argued that according to Smt. Sudha Rani v. M.P. Narayan and Ors. 1988 (3) Supreme Court Cases, page 366 affidavits are not evidence under Section 3 of the Evidence Act. The appellants cannot fill up a lacuna in their case by filing the affidavits. Referring to them individually he submitted that Shri Pyrelal who was a deponent was not a senior person in the organisation but was a lowly employee. When his attention was drawn to the other affidavits the learned JDR submitted that salesmen have to say as they are told to say. He pointed out the similarity in the language of the affidavits and submitted that this shows that the deponents were tutored. He argued that the affidavits should not be relied upon and only commercial parlance test should be applied. On being questioned about such a test, the learned JDR stated that no such test was recorded in the impugned order. Referring to the arguments regarding the view taken by the Motor Vehicle Authorities Shri Chakraborty submitted that the registration authorities did not say that the Maruti Van was a saloon car. It merely sold that the type of the body was "saloon". He further argued that the Motor Vehicles Act was not relatable to the Central Excise Act.
9. Shri Ravindra Narain in his rejoinder submitted that all the necessary material for a decision in the matter was available here and pleaded that the matter should not be remanded. He reiterated that the Collector was free to cross-examine the deponents of the affidavits, but that he did not do so. He denied that there is any lacuna in the appellants' case and pointed out that they were before the Original Adjudicating Authority and hence no question of such lacuna could arise. He pleaded that the affidavits disclosed the common parlance and the dictionary meanings also supported the same. Referring to the explanation added to the Notification dated 16-1-1985 the learned Advocate submitted that this explanation was only by way of abundant precaution.
10. We have considered the arguments of both sides. We have considered the suggestion of Shri Chakraborty for remanding the matter to the Collector, but do not find any justification to do so. The point at issue is simply whether Maruti Van can, for the purposes of Notification No. 20/84, be considered as a saloon car. The Collector proceeded to find to the contrary for the reason that the vehicle in question is called a van and not a saloon car. It is the plea of the appellants that the dictionary meanings, evidence of some persons in trade and the view of the Motor Vehicle Departmental Authorities show hat the so-called Maruti Van is a Saloon Car. We have before us the material to examine this question and there is no need for a remand, 11. As stated by both sides the term "Saloon Car" has not been defined in the Notification or in I he Tariff. Therefore, we proceed to examine whether there is evidence to consider that the vehicle in question can be called a Saloon Car on the basis of the documents produ ced by the appellants.
12. The available dictionary meanings for the word "Saloon Car" were perused by us. These are as follows :-The Concise Saloon Car : Motor car with closed body and no partitionOxford Dic- Behind driver.
Van: Covered vehicle for conveying furniture or other goods or horses etc., or prisoners;Chambers SiloonCar: A motor car with an enclosed body.TwentiethTionary.
Van: A large covered wagon; a light vehicle, whether covered or not, used in transportingLongman Saloon Car: An enclosed car having no partition between the driver Dictionary. and passengers.
Van: An enclosed motor vehicle used for transport of goods, animals, furniture etc.New Webs- Van: A large, covered vehicle, usually a truck orter's Dic- wagon, used to move furniture, commercial goods,tionary livestock, and the. like; a covered railway car for freight or luggage. Saloon Car: A bar, From these meanings, it is glained that a Saloon Car is a car with closed body and no partition behind the driver. A Van is a covered vehicle ordinarily used for carriage of goods and like things.
13. It was the plea of the learned JDR that in the absence of a definition trade parlance should be considered and not dictionary meanings. We examined this plea. The appellants produced before the Collector some affidavits of persons said to be familiar with the Maruti Van as Saloon Car etc. The Collector did not choose to cross-examine these persons nor did he have any other evidence to show that trade parlance showed that a Maruti Van cannot be considered to be a Saloon Car. We examined these affidavits of dealers and salesmen of Maruti Cars and Vans. They support what the appellants say and went unchallenged during the course of adjudication. The deponents were not cross-examined. But the affidavits were neither accepted nor rejected.
They ware ignored by the Collector. The affidavits are from persons who deal with the vehicle and their depositions are in consonance with the dictionary meaning given to "Saloon Car". Therefore, even applying the test of trade parlance the impugned order cannot be upheld as it does not contain any evidence contrary to the contents of the affidavits.
14. The appellants produced before the Collector and also before us the Registration Certificates said to pertain to two Maruti Vehicles, a car and a van Registration Authorities registered both the vehicles describing the body of each as "Saloon". We are unable to accept Shri Chakraborty's objection that Motor Vehicle Act is not relatable to Central Excise Law. As mentioned earlier there is no definition of a Saloon Car in the Tariff or in the Notification. Undoubtedly the officers of the Motor Vehicle Department have enough technical and common knowledge about motor vehicles. To arrive at a decision on the prevalent nomenclature of the product on the basis of the opinions of such officers cannot be unreasonable. The Hon'ble Supreme Court in Porrits and Spencer (Asia) Ltd. 1983 ELT1607 (S.C.) observed that where the statute did not contain definition stress should be placed on how the product was identified by the class or section of people dealing with or using the product. The depositions made in the affidavits filed before the Collector are in consonance with the practice of Motor Vehicle Department in treating the body of the Maruti Van as "Saloon".
We do not see any reason to ignore this practice of the Motor Vehicle Department. We also referred to the Explanatory Notes of Customs Co-operation Council, which have recognition in most countries, under Heading 87.02 (A) Motor Vehicles for the transport of persons, the heading is said to include; (1) Motor Cars (e.g., saloon cars, hackney carriages, sports cars and racing cars). Under Heading (B) Motor Vehicles for the transport of goods or materials ordinary lorries and vans of all kinds etc. etc. are mentioned. Heading 87.03 mentions special purpose motor lorries and vans and it is stated that this heading covers a range of Motor Vehicles specially constructed or adapted, equipped with various devices that enable them to perform certain special non-transport functions; i.e. the primary purpose of the vehicle of the heading is not the transport of persons or goods.
These explanatory notes therefore show that any Motor Vehicle with a closed body, without a partition behind the driver and used for carriage of persons has to be considered as a Saloon Car whereas vans are vehicles ordinarily used for carriage of goods etc. It is nobody's case that the Maruti Van is primarily designed or used for carriage of goods. It is well-known that this vehicle is intended for passengers only, carrying the luggage being a secondary aim, as is the case with any motor car.
15. In view of this we hold that on the basis of the dictionary meanings and the knowledge of persons who are familiar with the Maruti Van, it has to be considered to be a Saloon Car for the purposes of Notification No. 20/84. We hold accordingly.
16. It was also pleaded by the appellants that the demand is time-barred. The show cause notice dated 4-9-1985 was issued for the period 25-5-1984 to 16-1-1985. The Collector in his impugned order did not give a finding on the applicability of the extended period of limitation to the demand. On the other hand he recorded in the concluding para of his order that there could have been a genuine doubt about the van tyres being entitled to concession. In the face of this, it would not be proper to hold that there was any suppression or mis-statement of facts on the part of the appellants justifying the application of extended time limit. Therefore, the appellants succeed on the question of time-bar also, as the show cause notice was issued more than six months after the clearance of the tyres on payment of duty.
17. As a result we allow the appeal on merits as well as on the question of limitation.