(a) A motor vehicle, not yet fitted with the wheels or tyres and battery.

(b) A motor vehicle not equipped with its engine or with its interior fittings.

(c) A bicycle without saddle and tyres.

This Chapter also covers parts and accessories which are identifiable as being suitable for use solely or principally with the vehicles included therein, subject to the provisions of the Notes to Section XVII (see the General Explanatory Note to the Section)."

(Emphasis supplied by Ld. S.D.R.)

2. The goods were accordingly classified under Tariff Heading 8711.90. These were also taken for the purpose of ITC policy as complete Scooters. It is in the negative list of the policy and hence licence was required. Since the licence was not available the goods have been confiscated under Section 111 (d) and a penalty has also been imposed under Section 112. The appellants have been given an option to redeem the goods on payment of Rs. 15,000/-.

2.1 Hence this appeal before the Tribunal.

3. Ld. Advocate Shri R. Santhanam, has submitted that there is no Engine imported with the body Unit and therefore, it cannot be considered as complete Scooters. The goods cannot be treated as Scooters since engine is an essential part of a complete scooter and consequently it is submitted by the Ld. advocate that the authorities misdirected themselves by classifying the goods as "complete scooter" under sub heading 8711.90.

4. On the other hand Ld. SDR Shri A.K. Agarwal has submitted that the Customs Tariff of the Chapter 87 is fully aligned on the HSN. He, therefore, submits that the Explanatory Notes to HSN have a great persuasive value. He therefore urges that as per the Explanatory Note mentioned above the authorities below has correctly classified the goods taking them as character of complete scooter.

5. On the question of classification we are inclined to agree with the Ld. SDR. Although on the basis of common parlance, Ld. Advocate Shri R. Santhanam, rightly points out that a "body unit without an engine" cannot be termed "scooter". But in view of the Explanatory Notes to HSN we are left with no doubt that the goods would be classifiable under Tariff heading 8711.90. In arriving at the decisions we have taken into account the submissions of the Ld. SDR that Explanatory Note to HSN have great persuasive value in view of the judgement of the Apex Court in the case of Collector of Central Excise, Shillong Vs. Wood Craft Products Ltd. reported 1995 (7) RLT 661 (S.C.) = 1995 (77) ELT 23 (S.C.).

6. Next point raised by the Ld. Advocate relates to the ITC classification. The finding of the authorities below are the goods are liable to confiscation because the complete scooters are in the negative list of ITC Policy April to March, 1992-97. Ld. Advocate submits that parts have been specifically defined. In view of the definition of parts in para 7 (29) and in terms of para 7 (34) the goods will have to be classified as parts only in terms of the ITC Policy. Therefore, this will not be taken into negative list. Consequently the goods can be imported under OGL. Hence confiscation under Section 111 (d) and imposition of penalty under Section 112 are not warranted. He further submitted that it is a well settled proposition that Ex