ORDER
Gowri Shankar, Member (T)
1. The question for consideration in this appeal is the classification of goods imported by Nishiland Park Limited, described as ‘go-karts’. The importer claimed their classification both for the purpose of assessment of duty and Import Trade Control under Heading 95.08 of the Customs Tariff and corresponding heading of the Import Policy. The department was of the view that the goods were more correctly classifiable under Heading 87.03 for both these purpose. Heading 87.03 at the relevant time read: “motor cars and other motor vehicles principally designed for transport of persons (other than those of Heading 87.02), including station wagons and racing cars.” Heading 95.08 read : “roundabout swings, shooting galleries and other fairground amusements; travelling circuses, travelling menageries and travelling theatres”. Issue of written notice having been waived by the importer who was orally communicated this view, he was heard by the Commissioner, who passed orders confirming the proposal in the notice. The appeal from the Commissioner’s order came before this Tribunal in October, 1999. The Tribunal remanded the matter to the Commissioner for adjudication afresh, after considering the fresh evidence relating to the product. The appeal now before us is against the order passed in remand proceedings. In that order the Commissioner has confirmed the classification proposed by the department, confiscated the goods with an option to redeem them on payment of duty and imposed a penalty on the importer.
2. It is necessary at this stage to reproduce the specifications of the vehicle. The goods were described in the invoice as Formula K Indy Kart single seat go-karts, complete with accessories. The literature published by Formula K International Limited, Denbighshire, U.K., the manufacturer, gives the following specifications for the Indy Kart.
Go-kart-
Passenger Capacity Single seater
Weight 180 kgs.
Speed 45 kmph
Instrumentation None
Steering Positive
Electrical No lights
Wheels 4.10 x 350, 4 ply tyres and tubes.
Front
Overall length 1400 mm
Overall width 1200 mm
Overall height 650 mm
Brakes Twin hydraulic disc brakes operat
ing to both rear wheels
Accelerator Wire linkage
Start Recoil starter
Fuel Petrol
Consumption 30 kmpl
Fuel Capacity 3 litre
Engine Honda 5.5 HP, 4 stroke engines
Chassis Steel tubing braced and reinforced
Bodyshell Glass reinforced plastic
3. It was urged before the Commissioner that the go-karts should not be treated as motor vehicles classifiable under Heading 87.03 because they were meant for running on a smooth surface and not meant for running on public roads. They lacked lights and gearing and a complete body/ and signalling equipment which a motor vehicle is required to possess before it can be registered under the Motor Vehicles Act. They lacked the elements that provide comfort and styling to motor vehicles. The Commissioner has said that these arguments are not really relevant in determining the classification. He has found the go-kart to be a motor vehicle and designed for transport of a person, powered by a spark ignition internal combustion engine of cylinder capacity not exceeding 1000 CC, and thus satisfying the requirements of Heading 87.03. He has also relied upon the Tribunal’s decision in Leisureland Pvt. Ltd. v. CCE -1994 (71) E.L.T. 489 holding the go-karts considered by it to be classifiable under Heading 87.03.
4. In that decision, the Judicial Member, writing the lead order reasoned that go-karts were not covered by the definition of the Motor Vehicles Act under Section 2(18) of the Motor -Vehicles Act, 1939 because it was not suitable for use on public roads. He further found that the department had not cited any evidence to show that the go-kart satisfied the trade and commercial understanding of a motor car or other vehicle. While, in its technical specifications, a go-kart resembled a motor car, it was not designed for transport of persons, having been principally designed for amusement of children. He therefore, declined to accept as correct the classification under Heading 87.03 remanded the matter to consider classification under Heading 95.08.
5. The Technical Member was unable to agree with this view. He was of the view that the applicability of the definition in the Motor Vehicles Act, 1939 was not relevant. The object of the Motor Vehicles Act was very different from that of the Central Excise Tariff Act. It was therefore not proper for considering an entry under the latter Act to rely upon its definition in the former. He noted that the claim made by the manufacturer and the fact of sales by it to various customers such as transport companies, industrial houses, hotels, tea estates, supported the department’s contention, that the go-kart is meant for transport of persons. He noted that the Explanatory Notes to Harmonized System of Nomenclature mentioned that Heading 87.03 inter alia included “golf carts and similar vehicles”. He found that the reliance by the appellant before him upon of classification under 95.08 (mentioned in the Explanatory Notes to HSN) to “dodg’em” cars was relevant because the goods had not been shown to be “dodg’em” cars. Taking the overall view of the entire material on record, including the specifications of the goods and submissions, he confirmed the classification under Heading 87.03.
6. The matter was referred to a third member in view of the dispute between the two members. The third member found that the go-kart satisfied the definition of ‘vehicle’ in the McGraw Hill Dictionary of Scientific and Technical Terms. He said that the tariff requires (for classification under Heading 87.03) only that the goods should be principally designed for the transport of persons. He concluded that the specifications of the go-kart and descriptions of its special features as “good for in-city/township transportation, etc.” satisfied the criterion that classification under Heading 87.03. He agreed with the Member Technical. The Supreme Court has dismissed the Civil Appeal preferred by the manufacturer against this order. [Reported in 1996 (84) E.L.T. A50]
7. According to the Counsel for the appellant, the Tribunal based its decision in Leisitreland Pvt. Ltd. v. CCE upon the claim made by the manufacturer of the go-kart that the goods could be used in tea estates and hotels, etc. and upon the fact of sale of the goods to persons who would be engaged in such transportation. That is not our understanding. Doubtless, both the Technical Member, Mr. P.C. Jain who formed part of the original Bench and Mr. K.S. Venkataramani, the referring member have cited the claim made by the manufacturer. However, it would not be correct to say that they have entirely relied upon this claim alone in coming to their conclusion. Mr. P.C. Jain, the learned Member, has excluded the applicability of the Motor Vehicles Act and said that the scope of the Heading 87.03 is not limited to vehicles adapted for use upon public roads and in the portion that we have quoted above relied upon the specification of the goods and the “entire matter on record”. The third member Mr. K.S. Venkataramani had also relied extensively upon the definition of the term “motor vehicle’, scope of Heading 87.03 and only to some extend relied upon the manufacturers claim.
8. The Counsel for the appellant next contends that the go-kart considered by the Tribunal was significantly different from the go-kart that is presently under consideration. He emphasised that the go-kart imported by the appellant can only accommodate one person and, unlike the two seater dealt with in Leisureland Pvt. Ltd. v. CCE, does not have lights and horn, and does not have instrumentation such as speedometer. We agree that the go-kart considered in Leisureland Pvt. Ltd. v. CCE was fitted with a speedometer and odometer, lights and horn, when the goods under consideration lacks them. However, the presence of a speedometer and odometer, as far as we can see, is only relevant for the purpose of the Motor Vehicles Act and the rules framed therein. That Act makes it mandatory for the speedometer to be fitted to a vehicle although we do not think that it requires an odometer to be fitted. We do not find it possible to agree that, because the go-kart under consideration by us lacks such instrumentation as speedometer and odometer, lights and horn, and it meant for seating only one person, it ceases to be a motor vehicle for the transport of persons but it becomes only an item for use in the amusement park. A vehicle which lacks significant instrumentation, lights and horn is still capable of being used on public roads. The capability for use on public roads is not, however, the criteria. The majority view in Leisureland Pvt. Ltd. v. CCE was that Heading 87.03 was not limited to motor vehicles designed for use upon roads. It had noted that Tariff Item 34 in the earlier Central Excise Tariff, which is for motor vehicles and tractors including trailers contained definition of motor vehicles as meaning “of mechanically propelled vehicles other than tractors designed for use upon roads”. It had noted that 87.03 was not so worded as to permit its scope to be limited to vehicles designed for use upon roads. Applying that criteria the fact that the go-kart under consideration is not capable of being used on public roads of all kinds at all times, day and night, will not mean that it is not classifiable under Heading 87.03.
9. On the other hand we had found very considerable similarity with regard to such aspects as engine capacity, speed, passenger capacity, overall dimensions etc. as will be evident from the following chart.
In the present case
In Leisureland
Passenger Capacity
Single seater
Single/double
Weight
180 kgs.
60 to 90 kgs
Speed
45 kmph
40 kmph
Instrumentation
None
Speedometer and KM meter
Steering
Positive
Positive
Electrical
No lights
Lights and Horn
Wheels
4.10 x 350, 4 ply tyres and tubes. Front
1000-1270 mm base
and 750-900 mm track
Overall length
1400 mm
2000 mm
Overall width
1200 mm
850 mm
Overall height
650 mm
800 to 1000 mm
Brakes
Twin hydraulic disc brakes
operating to both rear wheels
On both rear wheels
Accelerator
Wire linkage
Wire linkage
Start
Recoil starter
Recoil starter
Fuel
Petrol
Petrol and Mobil oil
Consumption
30 kmpl
25kmpl
Fuel Capacity
3 litre
3 litre
Engine
Honda 5.5 HP, 4 stroke engines
2.5 BHP, single cylinder, two stroke
Chassis
Steel tubing
braced and reinforced
Tubular steel frame
Bodyshell
Glass reinforced plastic
PBS sheet
10. A consideration of these features it does not impel us to conclude that the difference between the vehicle under consideration and the one found in Leisureland Pvt. Ltd. v. CCE is not significant enough not to apply the ratio of the earlier decision.
11. Nor we are able to accept the contention of the Counsel that the appellant that the go-kart is not principally designed for the transport of persons. According to him since it is not capable of being driven on roads and it is used to carry one person around a fixed track, it is not designed for such purpose. The term ‘transport’ should not be construed in the narrow sense that carrying persons around a fixed tract is transportation. He also contends
that the manufacturers in the present case has made a claim that it is principally designed for use in an amusement park.
12. The meaning of the word ‘transport’ with which we are concerned is to carry goods or persons from one place to another. The argument that because the transport begins and ends at one point around a track there is no transport is simplistic. It is like saying that a person who returns home after going to his place of work has not been transported. No doubt the transport in a go-kart of a person may not be for a purpose such as business, etc. It is transport for pleasure or for the thrill of racing. It however, continues to be transport. A person who goes for a joy ride in an aeroplane has certainly been transported from the ground up to a certain height and a certain distance and back again.
13. The certificate issued to the appellant by Formula K. International Limited, the manufacturer, has been cited in support. This certificate assumes that this go-kart is made for amusement and recreation and is not designed for overall use of regular rides. It emphasises the absence of gears and reversing facility, lights etc. This aspect has already been considered by us. The fact that it is an amusement and recreation vehicle does not necessarily mean that it must be classifiable under Heading 95.08 and cannot be classifiable under Heading 87.03. A golf cart classifiable under Heading 87.03 is intended for amusement and recreation. There is considerable emphasis in the certificate that the go-kart is fitted with control receivers and operated with a master control as the result of which it can be stopped at any time. The Counsel for the appellant agree that these controls whereby the go-kart can be stopped by a person at the starting point are an additional accessory. He also says, after receiving instructions from his client, that for the use of this control mechanism special split lead wires are essential which has not been imported. It is thus clear that the go-kart which has been imported without the master control and the split leads, etc. is not one which can be stopped or controlled by an external agency. It is a vehicle whose operations are completely under the control of its driver. The certificate is therefore, incorrect to the extent that it lay emphasis upon the master control. It would not have any impact upon the classification of the go-kart.
14. Even independently of decision of the Tribunal in Leisureland Pvt. Lid. v. CCE we are unable to accept classification of these goods under Heading 95.08. Classification is claimed under this heading are on the ground that the goods fall in the category of “other fairground amusements”. Note (1) to Chapter 95 excludes from that Chapter in Clause (n) sports vehicles other than bobsleighs, toboggans and the like of Section XVII and sports craft such as canoes and skiffs, children’s bicycles. Now not one of this category of vehicles or craft is intended for commercial transportation of persons or goods. Each of them is intended to provide transportation but for reasons of pleasure and amusement. Therefore the view that since the go-cart is intended to transport persons only for purposes other than commercial, it should be classified under Chapter 95 is rebutted. The Explanatory Notes to Heading 95.08 under the HSN reads as follows.
“Fairground amusements, travelling circuses, travelling menageries and travelling theatres fall in this heading provided they comprise all the essential units required for their normal operation. The heading also includes items of auxiliary equipment provided they are presented with, and as components of, these various amusements, notwithstanding that when presented separately such items (e.g., tents, animals, musical instruments, power plants, motors, lighting fittings, seats, and arms and ammunition) would fall in other headings of the Nomenclature.
Subject to the provisions of Note 1 to this Chapter, articles which are identifiable as designed solely or principally for use as parts and accessories of such amusements (e.g., boats for swings and water-chutes), remain classified here when presented separately.”
15. The go-kart that is under consideration before us is an individual item, capable of being operated on its own, and had not been shown to be a part of a larger installation. As we have noted, it has not been demonstrated that it cannot function on its own. The specific notes to the heading therefore do not justify its classification under Heading 95.08. Therefore, as between the alternative classifications, once Heading 95.08 is excluded the other one 87.03, will apply. Notes under Heading 87.03 also make it eminently clear that it covers motor vehicles for the transport of persons, for whatever purpose the transport may be required. Racing cars which clearly transport persons for pleasure or amusement around the fixed tracts, are specifically included in the heading. The Notes makes it clear that golf carts and similar vehicles fall under that heading. Golf carts are designed and are primarily used for transporting golfers on a golf course. Such a vehicle clearly is not adopted for use on public roads nor is the transport that it provides any utilitarian purpose since it only enables the players to go from one part of a golf course to the other for the purpose of playing the game. It would therefore follow that any motor vehicle principally designed for the transport of persons unless it is specifically excluded from the Heading 87.03 would be classifiable under this heading. The Explanatory Notes under this make a significant exemption in the case of “dodge’em” cars which are specialised use in the fairground. It has not been claimed before us that the go-karts under consideration by us are dogent cars or similar to them. Classification, therefore has been correctly determined under Heading 87.03. We may also mention that in the course of hearing our attention was drawn, by one of the Counsel present, to a classification opinion of the World Customs Organisation (as the Customs Cooperation Council is now known) contained in a CD-ROM, of which an extract was produced, that go-karts motor vehicles single seater/sports vehicle are correctly classifiable under Heading 87.03.
16. A contention was raised that in any event the goods are not liable to confiscation and the importer not liable to penalty. The appellant believed bona fide that the goods were genuinely classifiable under Heading 95.08. Evidence was produced in the form of bills of entry filed by Red Bottons Parks and Resorts Pvt. Ltd., classifying similar go-karts under Heading 9508.00. No doubt as the departmental representative contends, that import took place subsequent to the import under consideration. That does not make any difference. The bills of entry in question thus accepted classification of go-kart under Heading 95,08. The appellant could reasonably believe that it is liable to classification under Heading 95.08. We therefore, set aside the penalty imposed on the appellant and reduce the redemption fine from Rs. 4 lakhs to Rs. 50,000/-
17. Appeal allowed in part.