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TMI Blog1998 (5) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... or transport of persons or goods and they merit classification under sub-heading 8705.00 attracting higher Central Excise duty @ 25% ad valorem. The two contending entries by the appellant firm and the Department, are reproduced below :- Head-ing No. Sub-heading No. Description of goods Rate of duty 84.26 8426.00 Derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane. 15% 87.05 8705.00 Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, crane lorries, road sweeper lorries, spraying lorries, mobile work-shops, mobile radiological units). 25% 3. Learned Advocate, Dr. Samir Chakraborty appearing on behalf of the appellant firm submitted that they are engaged in the manufacture of the said crane lorries even prior to the introduction of the new Tariff Act effective from 28-2-1986. In the erstwhile Tariff, some other vehicles and tractors including trailors were covered under Item No. 34 and a dispute as regards the correct classification of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of motor vehicles. Referring to Note (2) to Chapter 84 of HSN, he submitted that those Cranes would fall under Heading 87.05, in terms of the said Note, which are simply mounted on the automobile Chassis, whereas Heading 84.26 would apply in their case in terms of the said Note, inasmuch as the propelling or control elements are located in the cab of a lifting or handling machine mounted on a wheeled Chassis. The said Chapter Note (2) as set out in the HSN is reproduced below :- (2) Machines mounted on automobile chassis or lorries. - Certain lifting or handling machines e.g. cranes, light breakdown cranes are often mounted on what is in fact an essentially complete automobile chassis or lorry in that it comprises at least the following mechanical features propelling engine, gear and controls for gear changing and steering and braking facilities. Such assemblies fail to be classified in Heading 87.05 as special purpose motor vehicles, whether the lifting of handling machine is simply mounted on the vehicle or forms an integral mechanical unit with it, unless they are vehicles designed essentially for transport purpose falling in Heading 87.05. On the other hand, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letely integrated with the chassis and the chassis cannot be separated and used for motor vehicles. Referring to the subsequent decision in the case of Mineral Exploration Corporation Ltd., he submitted that in the said case, drill mounted on a truck was held as not classifiable under 87.03 of the Customs Tariff, covering special purpose motor lorries and vans, by observing that the basic character of the mounting drill was that of drill used for drilling purposes and not of a vehicle. As the goods were used by excavating, levelling, tamping, boring and extracting machinery, they were held to be crane akin to the Heading 84.23. Dr. Chakraborty also submitted that though the said judgment relates to the classification of the imported goods under the Customs Tariff Act, 1975. Nevertheless, the ratio laid down therein and the observations made, are applicable to the facts of the instant case. 8. It was further submitted by Dr. Chakraborty that in the recent judgment of Madras Bench of the Tribunal reported in 1997 (95) E.L.T. 489 (Tribunal) - 1997 (22) RLT 625, cranes imported by the appellant company having capacity of 90 tonnes and carrying load up to a height of 40 metres mounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicles. The dismantling of the chassis for further fixation of cranes on the same, is merely a process undertaken by them in the manufacture of the truck lorries. Referring to Explanatory Note (7) of HSN under Heading No. 87.05, he submitted that the crane lorries consisting of motor vehicle chassis on which a cab of rotating cranes are permanently mounted, would fall under Heading 87.05. 12. As regards the limitation, he submitted that since the appellants have not given the full description of the goods in the classification lists, the extended period was rightly invoked by the Commissioner. 13. We have carefully considered the submissions of both sides. The question required to be decided in the instant appeal is the classification of the Cranes manufactured by the appellant firm. The process of manufacture undertaken by the appellant firm, has not been disputed or rebutted by the Department. The adjudicating authority has based his decision on two points. First, that the starting point of the manufacture of the Truck Cranes is the motor vehicle chassis. He has gone by the fact that the modification of the chassis in the appellants factory is only a process of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r track laying chassis, whether or not the whole can be driven on the road under its own power, remain classified in, for example Heading 84.26, 84.29 or 84.30. Similarly, this Heading excludes self-propelled wheeled machines in which the chassis and the working machine are specially designed for each other and form an integral mechanical unit. [e.g. self propelled motor graders). In this case, the machine is not simply mounted on a motor vehicle chassis, but is completely integrated with a chassis that cannot be used for other purposes and may incorporate the essential automobile features referred to above." 14. A reading of the above shows that the self-propelled machine in which one or more of the propelling functions are located in the cab of a working machine mounted on a wheeled chassis remains classified under either Heading 84.26 or 84.29 or 84.30, as the case may be. As the said functions are located in the cab of the Truck Cranes manufactured by the appellants, we fully agree with the submissions of the learned Advocate that the same are excluded from Heading 87.05 and would fall under 84.26. 15. As the classification has been held to be under 84.26, the alternative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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