THOMAS, J. - (1.) THE question involved in this appeal is whether tyres of the size 1800 and above manufactured for fitment to heavy moving vehicles such as dumpers and earth movers are eligible to excise duty as "tyres for motor vehicles". This appeal by special leave is in challenge of the order passed by the Central Government in exercise of their revisional powers under S. 36(2) of the Central Excises and Salt Act 1944 (for short the Act') decided against the appellant holding that such tyres are also "tyres for motor-vehicles" as envisaged in Item No. 16 of the Central Tariff (1st Schedule to the Act).
(2.) APPELLANT company has been manufacturing tyres and tubes of varying sizes which are excisable under Item No. 16 of the Central Excise Tariff. The said item, during the relevant period contains the following description. Item No.16 -TYRES JUDGEMENT_752_5_1997Html1.htm 3. APPELLANT adopted that stand that tyres of the size 1800 and above do not fall within the category of "types of motor vehicles" and hence the proper classification of such tyres should be under the residuary sub-item 3 "all other types". Excise duty was collected from the appellant for such tyres treating them as tyres for motor vehicles. APPELLANT made claims for refund of the excess amount with the Assistant Collector of Central Excise, Faridabad. All such claims were rejected by the Assistant Collector. However, on appeals preferred by the appellant, the Appellate Collector of Central Excise, New Delhi, reversed the order of the Assistant Collector upholding the contention of the appellant. But Central Government in exercise of the revisional powers under Section 36(2) of the Act set aside the orders of the Appellate Collector of Central Excise and restored those of the Assistant Collector. Hence, this appeal. There is no dispute that tyres of size 1800 and above are intended to be fitted to heavy moving vehicles like dumpers etc. If such heavy moving vehicles are "motor vehicles" appellant cannot escape from the liability to pay the higher duty at 60 Per Cent ad valorem. Learned counsel for the appellant contended that "motor vehicles" are those vehicles which are made to run on the roads and not those which are made for other uses. On the other hand, learned counsel for the Revenue argued that since dumpers etc. are also used to move on the roads, they too must be regarded as "motor vehicles" for the purpose of exigibility to excise duty. The subject "motor vehicle" is not defined in the Act or in the Rules prescribed thereunder, nor even in Item No. 16. However, it is defined in Item No. 34 of the Central Tariff wherein motor vehicles are also subjected to excise duty at different layers. We may point out that both sides agreed that the definition contained in Item 34 can usefully be imported for deciding what is a motor vehicle even as for Item 16. We, therefore, reproduce the said item below :Item No. 34 -- Motor Vehicles JUDGEMENT_752_5_1997Html2.htm Explanation For the purpose of this item, where a motor vehicles is mounted, fitted or fixed with any weight lifting, earth moving and similar specialised material handling equipment, then such equipment, other than the chassis, shall not be taken into account.
(3.) LEARNED counsel for the Revenue contended on the strength of the above "Explanation" that additions fitted to a motor vehicle for equipping it to be used for weight lifting or earth moving etc. work would not render the basic motor vehicle different from a motor vehicle. A Bench of two judges of this Court has considered the identical question in Dunlop India Ltd. v. Union of India, 1994 Suppl (2) SCC 335. Learned Judges approved the interpretation madeItem No. 16 - TYRESItem No.Tariff DescriptionRate of Duty16 Tyres"Tyre" means a pneumatic tyre in the manufacture of which rubber is used and includes the inner tube, the tyre flap and the outer cover of such a tyre1. Tyres for motor vehicles 60 Per Cent ad valorem2. For cycle (other than motor cycles) :-(a) Tyres 60. p. per tyre or 15 Per Cent ad valorem whichever is higher.(b) Tubes 30 p. per tube or 15 Per Cent ad valorem whichever is higher.3. All other tyres 20 Per Cent ad valorem Item No. 34 -- Motor VehiclesItem No. Tariff Description Rate of Duty34. Motor Vehicles ---"Motor Vehicles' means all mechanically propelled vehicles adapted for use upon roads, and includes a chassis and a trailer, but does not include a vehicle, running upon fixed rails -(1) Auto-cycles, motor-cycles, scooters, auto-rickshaws and any 10 Per Cent ad valoremother three wheeled motor vehicles (2) Motor vehicles of not more than 16 HP by Royal Automobile 25 Per Cent ad valoremClub (RAC) rating (3) Motor cars of more than 16 HP by Royal Automobile Club 40 Per Cent ad valorem(RAC) rating contested or adapted to carry not more than 9 persons (3A) Tractors, including agricultural tractors 15 Per Cent ad valorem(4) Motor vehicles, not otherwise specified 15 Per Cent ad valoremExplanation -- For the purpose of this item, where a motor vehicles is mounted, fitted or fixed with any weight lifting, earth moving and similar specialised material handling equipment, then such equipment, other than the chasis, shall not be taken into account.by Government of India on the words "motor vehicles' in Item No. 16 mainly on two premises discerned from the description given in Item No. 34 of the Tariff. First is that "agricultural tractors" are also included in Item No. 34 and second is that the Explanation in Item No. 34 throws much light upon the precise meaning to be attached to "motor vehicles". Regarding the first premise learned Judges have observed thus : "If it is held that agricultural tractors also are 'adapted for use upon roads' notwithstanding the fact that they are principally meant for being operated and used on agricultural lands, it can equally be said that dumpers, coal-haulers, earth movers etc. are also 'adapted for use upon roads', though principally they are meant to be operated and used on construction sites." ;