M. Santhanam, Member (J)

1. The present proceedings were initiated by Government of India by means of a Review Notice, dated nil, in exercise of the power under Section 36(2) of the Central Excises and Salt Act, 1944, as it then existed. The said notice stood transferred "to the Tribunal under Section 35P(2) of the Act to be disposed of as if it were an appeal filed before it. The Review Notice is, accordingly, being disposed of as an appeal filed by the Central Government. The date of the notice, according to the reply of the respondent herein dated 22-12-1980, is 6-9-1980.

2. The facts, giving rise to the Review Notice, are briefly as follows.

3. The respondents are a Government Company manufacturing earth moving machinery and vehicles including Haulpak Rear Dump and Tractor Rear Dump. The Superintendent issued a demand on 7-8-69 covering 56 Rear Dump and 15 LW 35 Haulpak for duty amounting to Rs. 72,42,685.91. On this an adjudication was made and the Deputy Collector confirmed the demand. The respondents challenged the order before the Karnataka High Court in Writ Petition 813 of 1971. The Hon'ble High Court of Karnataka in their Order dated 21-11-74 held that excise duty levied under Item 34 of the First Schedule to the Central Excises and Salt Act has no application to a motor vehicle which is not suitable for use on public roads. The Court also held that the Deputy Collector did not go into the question whether or not Haulpak Rear Dump and Tractor Rear Dump are suitable for being used upon public roads. The order was held unsustainable. The Deputy Collector was directed to examine the question and then to decide afresh whether these two types of vehicles are exigible to excise duty. Paragraph 17 of the judgment is as follows :

"In case the Deputy Collector holds that these two types of vehicles are adapted for use upon public roads, and hence come within the ambit of Item No. 34 the First Schedule to the Central Excise Act, he should further examine whether any parts of these two types of vehicles should not be taken into account for the purpose of that item, as provided in the explanation to that item."

The Deputy Collector in his order dated 29-10-76 confirmed the demands raised by the Superintendent and also held that the equipments were classifiable under T.I. 34. On revision, the Government of India remanded the case back to the Appellate Collector stating that the Deputy Collector had no appellate powers. The impugned order was passed by the Appellate Collector on 17-9-79 allowing the appeal of the respondents. The review notice has been issued by the Government of India under Section 36(2) of the Central Excises and Salt Act, as it then existed, against the impugned order.

4. In the show cause notice it is stated that in their decision the High Court of Delhi in the case of Hindustan Motors Ltd. v. Union of India and Ors. [1980 E.L.T. 423 (Del.) have held that "the epithet 'off the highway' used in relation to 'rear motors' will not take the vehicle out of the category of motor vehicles." In coming to this conclusion the Delhi High Court has relied on judgment of the Supreme Court in Bolani Ores v. State of Orissa MANU/SC/0313/1974 : [AIR 1975 (S.C.) 17]. According to the Government the ratio of the judgment of the Delhi High Court would equally apply to the assessees case and that the impugned goods would appear to attract central excise duty under Item 34 of the First Schedule to the Central Excises and Salt Act as it stood at the material time.

5. The parties are at issue on the question whether Rear Dumpers and Haulpak Rear Dumpers manufactured by the respondents would fall under T.I. 34 as it stood at the relevant time. Shri Lakshmikumaran, appearing for the Department, and Shri S.G. Sundaraswamy, the learned counsel, for the respondents, argued elaborately on points regarding their respective contentions and cited several decisions in support of their case. We shall be dealing with the contentions in the cours