2018 (7) TMI 1420 - AAR - GST

Classification of goods - Truck Mounted Cranes (TMC) - whether these TMC will fall under the chapter heading 8426 or 8705? Held that - Chapter heading 8426 covers SHIP S DERRICKS; CRANES INCLUDING CABLE CRANES; MOBILE LIFTING FRAMES STRADDLE CARRIERS AND WORKS TRUCKS FITTED WITH A CRANE. Due to the fact that this heading covers Works Trucks fitted with cranes the concerned jurisdictional officer has also recommended that the impugned product merits classification under chapter heading 8426 - It is a special purpose vehicle (crane lorry) which is engaged in lifting/loading. It is evident that when the works truck is not fitted with lifting of handling equipment such as crane it merits classification under chapter heading 8709. However when it is fitted with crane it merits classification under heading 8426 - In their application the applicant has submitted that they buy readymade trucks say Ashok Leyland TATA etc. Such Trucks and Lorries which are meant for transport of goods are covered under chapter heading 8704. Accordingly classification of the impugned goods under heading 8426 is ruled out as because the trucks being purchased/used by the applicant for manufacturing truck mounted crane (TMC) are not works truck but these are trucks/lorries which are basically meant for transport of goods. Such Trucks and Lorries are covered under chapter heading 8704 and when crane is mounted upon them to make Truck Mounted Crane the resultant product will be special purpose vehicles falling under chapter heading 8705. The product of the applicant cannot be classified under chapter heading 8426 as the applicant is not using works truck for producing truck mounted crane. As cranes are being mounted by the applicant on automobile chassis the resultant product merits classification under chapter heading 8705 in view of HSN explanatory notes to Harmonised System of Nomenclature (HSN). Ruling - The product manufactured/supplied by the applicant which is resultant of mounting/fixing of crane on readymade trucks/lorries bought by them from truck/lorry manufacturers such as Ashok Leyland TATA etc. and known as truck mounted cranes (TMC) is classifiable under heading 8705.

Summary

Issues: Classification of Truck Mounted Cranes (TMC) under chapter heading 8426 or 8705.

Detailed Analysis:
1. Applicant's Submission: The applicant, a manufacturer of various heavy machinery including Truck Mounted Cranes (TMC), sought clarification on the correct classification of TMC under chapter heading 8426 or 8705. They manufacture cranes mounted on readymade trucks for lifting heavy loads.

2. Officer's Comments: The Deputy Excise & Taxation Commissioner stated that the dealer manufactures cranes mounted on trucks for lifting and unloading heavy material. The dealer sought clarification on whether TMC falls under heading 8426 or 8705.

3. Personal Hearing: A personal hearing was conducted where the applicant reiterated their submission. The decision on the classification was reserved for later release.

4. Authority's Findings: The main issue was to determine if TMC falls under chapter heading 8426 or 8705. Chapter 8426 covers works trucks fitted with cranes, while chapter 8705 includes special purpose motor vehicles like crane lorries. The jurisdictional officer recommended classification under 8426, but the applicant's use of trucks for transport of goods suggested classification under 8705.

5. Classification Analysis: Works trucks without lifting equipment fall under 8709, while those with cranes are classified under 8426. The applicant's use of trucks primarily for transporting goods aligns them with chapter 8704. The judgment referred to a tribunal case supporting classification under 8705 for special purpose motor vehicles.

6. Explanatory Notes: The judgment referenced the HSN explanatory notes, highlighting that cranes mounted on automobile chassis are classified under 8705 as special purpose motor vehicles. The Supreme Court's ruling emphasized the reliability of HSN explanatory notes for classification.

7. Ruling: The Advance Ruling Authority determined that TMC, resulting from mounting cranes on readymade trucks, is classifiable under heading 8705. The ruling is binding on the applicant and the concerned officer unless there are changes in law, facts, or circumstances.

8. Conclusion: The judgment clarified the classification of TMC under chapter headings 8426 and 8705 based on the nature of the vehicles and the purpose for which they are used. The reliance on HSN explanatory notes and legal precedents guided the decision-making process for accurate classification.