IMPORTANT POINT
Tyres of the size 1800 and above manufactured for fitment to heavy moving vehicles such as dumpers and earth movers are exigible to excise duty not as tyres for motor vehicles but under residuary sub-item 3 "all other tyres" under Central Excise Tariff.

JUDGMENT

Thomas, J.-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 exigible 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 Section 36(2) of the Central Excise 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 descriptions :

Item No. 16-Tyres

Item Tariff Description Rate of Duty No.

16. 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 tyre.

1.Tyres for motor vehicles 60% ad valorem

2. For cycle (other than      motor cycles) :-

(a) Tyres 60 p. per tyre or 15% ad va- lorem which- ever is higher.

 (b) Tubes 30p. per tube or 15% ad                           valorem which- ever is higher.

3. All other tyres 20% ad valorem

3. Appellant adopted the stand that tyres of the size 1800 and above do not fall within the category of "tyres for motor vehicles" and hence the proper classification of such tyres should be under the residuary sub-item 3 "all other tyres". 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 orders 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.

4. 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% ad valorem. Learned counsel for the appellant contended that "motor vehicles" are those 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.

5. 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 No. 16. We, therefore, reproduce the said item below :

Item No. 34 - Motor Vehicles

Item Tariff Description Rate of Duty No.

34. 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