2015 (11) TMI 676 - SC - Central Excise

Classification of goods - whether drilling rigs mounted on motor vehicles chassis are classifiable under Chapter Sub-Heading 8703.00 as claimed by the Revenue or it is classified under Chapter Sub-Heading 8430.00 as claimed by the assessee - Held that - The goods in question are drilling rigs, though mounted on motor vehicles chassis. By no stretch of imagination it can be treated as special purpose motor vehicles. - Tribunal rightly held that when drilling rigs and the motor vehicles are not integrally connected, the case would not fall within Chapter Heading 8705.00. On that basis, the Tribunal also distinguished the present case from the judgment of this Court in CCE, Baroda vs. L.M.P.Precision Engineering Pvt. Ltd. 2003 (12) TMI 57 - SUPREME COURT OF INDIA . - Decided against Revenue.

Summary

Issues involved:
Classification of drilling rigs mounted on motor vehicle chassis under Chapter Sub-Heading 8703.00 or Chapter Sub-Heading 8430.00.

Analysis:
The core issue in the present appeals revolves around the classification of drilling rigs mounted on motor vehicle chassis. The dispute arises between the Revenue, claiming classification under Chapter Sub-Heading 8703.00, and the assessee, arguing for classification under Chapter Sub-Heading 8430.00. The Tribunal, in its impugned judgment, sided with the assessee's contention. To provide clarity, the relevant entries from the classification are reproduced, highlighting the distinction between the two sub-headings.

The Tribunal's decision was based on the interpretation that the drilling rigs, despite being mounted on motor vehicle chassis, do not qualify as special purpose motor vehicles under Chapter Heading 8705.00. The Tribunal reasoned that the goods in question, i.e., drilling rigs, cannot be considered special purpose motor vehicles as per the definition provided. This interpretation led the Tribunal to conclude that when drilling rigs and motor vehicles are not integrally connected, the case does not fall within Chapter Heading 8705.00.

Furthermore, the Tribunal's decision was supported by a distinction made from a previous judgment of the Court in CCE, Baroda vs. L.M.P. Precision Engineering Pvt. Ltd. The Tribunal's reasoning aligned with the differentiation made in the aforementioned case, reinforcing the stance that the drilling rigs, even when mounted on motor vehicle chassis, do not meet the criteria for classification under Chapter Heading 8705.00.

In light of the above analysis, the Supreme Court dismissed the appeals, affirming the Tribunal's decision and rejecting the Revenue's classification under Chapter Heading 8705.00. The Court concurred with the Tribunal's interpretation that the drilling rigs, when not integrally connected with the motor vehicles, do not fall within the ambit of special purpose motor vehicles as defined under the relevant classification. Thus, the classification under Chapter Sub-Heading 8430.00, as advocated by the assessee, was upheld, and the appeals were consequently dismissed.