2000 (9) TMI 150 - AT - Central Excise

Summary

Issues involved: Classification of Drilling Rigs mounted on motor vehicle chassis under Heading 87.05 or Heading 84.30 of the Central Excise Tariff Act.

Analysis:
1. The issue in this appeal revolves around the classification of Drilling Rigs mounted on motor vehicle chassis under Heading 87.05 as decided by the Collector or under Heading 84.30 as claimed by the Appellants.

2. The Appellants argued that the basic function of the drilling rig is not as a motor vehicle but as a drilling machine, hence should be classified under Heading 84.30. They cited previous Tribunal decisions supporting this classification based on integration and functionality.

3. On the contrary, the Revenue argued that the drilling equipment did not become an integrated part of the truck chassis, thus should be classified under Heading 87.05 as a Special Purpose Motor Vehicle, referring to Explanatory Notes of HSN under both headings to support their stance.

4. The Consultant highlighted that the Appellants are not in the business of manufacturing motor vehicles but drilling rigs, similar to a previous case. They referenced various decisions including a Supreme Court judgment to support their argument that mounting drilling equipment on chassis does not amount to manufacturing a motor vehicle.

5. The Tribunal analyzed the arguments and previous decisions, concluding that the drilling rigs should be classified under Heading 84.30. They emphasized that the chassis cannot be separately used as a motor vehicle and cited the Supreme Court's judgment regarding the building of bodies on chassis. Therefore, the appeal by the Appellants was allowed based on these considerations.