2013 (2) TMI 282 - AT - Central Excise

Waiver of pre-deposit - Classification - Assessee is engaged in the manufacture of Tractors - under Chapter Heading 87 of the Tariff as Tractor - Revenue wants to classify the same under sub-heading 8429 5100 of the Tariff specifically as Front End Shovel Loader - Held that - Out of total 2978 numbers of machine, only in respect of 405 numbers of machines were cleared with the additional equipments which was fitted at the place of the dealers. It cannot be said that all the machines manufactured by the applicants are classifiable as Front End Shovel Loader classifiable under sub-heading 84295100 of the Tariff. Total waiver of dues - Stay granted

Summary

Issues:
Classification of the machine as Tractor or Front End Shovel Loader under Tariff headings.

Analysis:
The Applicant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs.17,26,89,200. The dispute revolved around the classification of the model "Arjun-Ultra 1 CE" as a Tractor or a Front End Shovel Loader under the Tariff headings. The Revenue contended that the model should be classified as a Front End Shovel Loader under sub-heading 8429 5100, while the Applicant argued for classification under sub-heading 87019090 as a Tractor, exempt from Central Excise duty. The Revenue claimed that the additional equipment attached to the model, designed by the Applicant, transformed it into a Construction Equipment, not a Tractor. The Revenue highlighted that the equipment was fitted under the supervision of the Applicant and bore the brand name "Mahindra & Mahindra." The Revenue emphasized the unique features of the model, such as a special grade front axle, indicating its classification as a Front End Shovel Loader.

The Tribunal noted that out of the total 2978 models manufactured by the Applicant, only 405 were cleared with additional equipment by dealers. It was established that not all models classified as Tractors by the Applicant were fitted with additional equipment and cleared as dozers and loaders. This fact was undisputed by the Revenue. Consequently, the Tribunal found that the Applicant had a prima facie case for a total waiver of dues. Therefore, the pre-deposit of dues was waived, and the recovery of the same stayed during the appeal's pendency. The stay petition was allowed, providing relief to the Applicant in the classification dispute regarding the model "Arjun-Ultra 1 CE."