9911796707
TMI Blog2006 (8) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... -do- M/s. Chaitanya Industries E/931/2005 No. 126/2005 (H-III) CE dated 28-6-2005 -do- -do- M/s. Borewell Equipment Company Pvt. Ltd. E/26/2006 No. 156/2005 (H-III) CE dated 29-8-2005 -do- -do- M/s. Vijay Mining Equipments 2. The Respondents manufacture water well drilling rigs mounted on chassis of motor vehicles. They claimed classification of the goods under Chapter Sub Heading 8430.00. However, proceedings were initiated against the Respondents and the Original Authorities classified the impugned goods under 8705.00 and demanded differential duty during the relevant period. If the items are classified under Chapter 84, they would be entitled for the benefit of SSI exemption. If the other classification under Chapter 87 is adopted, the goods would not be entitled for the SSI exemption, hence the demand of duty by the Revenue. The Original Authorities relied on the decision of the Apex Court in the case of CCE v. LMP Precision Engg. Co Ltd. - 2004 (163) E.L.T. 290 (S.C.) and classified the goods under Chapter 87.05. The Respondents were aggrieved over the decision on the ground that the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court has observed that there is no evidence to show that the chassis and the drilling rig are totally integrated. He produced enormous evidence with regard to the manufacture of the impugned goods to show that the machine is not simply mounted on an automobile chassis but is completely integrated with a suitable modified chassis that cannot be used for other purposes. The Commissioner (A) has taken all these facts into consideration and decided the classification under Chapter 8430. Hence, he prayed that the Revenue s appeals should be dismissed. 6. We have gone through the records of the case carefully. The Original Authorities decision is based on the Apex Court s decision in the case of LMP case (supra). In that case the Tribunal s decision to classify the goods under Chapter 87.05 was rejected mainly on the ground that there was no evidence to show that the chassis and the working machines had been designed for each other and where both the chassis and the machine form an integral unit. We reproduce the observations of the Hon ble Apex Court in Para 14 of the said order. 14. The question, therefore, before the Adjudicating Authority and the Tribunal was whether there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SA/11/(1) Date /05/2005 CERTIFICATE Process of Manufacture of boring machinery/water well drilling rig by M/s. Chaitanya Industries Kushaiguda, HYderabad. As per the request of M/s. Chaitanya Industries, the under signed has visited the Rig Registration No. RJ 06 0 - 1894 supplied by M/s. Chitanya Industries vide Invoice No. 40 Date 18-1-1997 to M/s. Venkateshwera Rock Drills, and also Rig R.C. No. AP 24 B 3888 supplied vide Invoice No. 44 Date 15-2-1997 to M/s. Raghavendra Borewells. We have inspected examined the Machinery / Water Well Drilling Rigs mounted on M. V. Chassis supplied by M/s. Chaitanya Industries, Kushaiguda, Hyderabad and report is given as under. This is only our Chartered Engineer Certificate and has no legality or consequences whatsoever. (1) Driver Cabin : As per the thawing available with the shop floor is fabricated and assembled on the chassis. The cabin is got welded with the chassis. (2) Chassis : As per the functional requirement for mounting of the rig the chassis is extended and doubled strength-wise by reinforming and welding additional channel to the chassis by fabrication and for support of base frame which is sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is welded on the base frame. 6.5 Diesel tank : Is installed on the welded frame. The original diesel tanks supplied along with the chassis is removed and tank with higher capacity is fabricated and fixed. This is essentially required to meet the requirement for drilling purpose for higher fuel requirements. This is permanent and integral change. 6.6 Hydraulic circuit : Is tailor made consisting of hydraulic pumps, valves, hydraulic cylinders, hydraulic motors, hoses, tubes etc. This forms an assembly and used for rig operation. 6.7 Hydraulic tank : The hydraulic tank is installed on the frame which is welded with the base frame permanently. 6.8 Rod racks : The racks are fabricated by welding for keeping the drill rods. 6.9 Air oil cooler : The bracket / frame is welded to the base frame on which the making it an integral part on which the air oil cooler is mounted. 6.10 Control panel of the rig : Control panel is fitted with welded frame. 6.11 Jack cylinders : Jack cylinder mounting frames are welded with base frame on which the jack cylinders are fixed. Jack cylinders are used for leveling of the rig for proper drilling. 6.12 Mast rest : The rig mast rest is fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PROCESS : FINAL INSPECTION : OUTPUT : DELIVERY 6.3 Revenue contends that the chassis and drilling rig are not designed for each other. We do not agree with that contention. From the manufacturing process, we find that the chassis supplied by the customer undergoes great deal of modification to suit the design requirement and the working of the machine with respect to the rig. In fact the chassis is totally disintegrated initially and manipulated and used to produce in the process a rig. It is definitely an integral and inseparable part of the rig and the chassis does not exist in its original form and contour. In these circumstances, the impugned goods are rightly classifiable under Chapter No. 8430 which reads as : Other moving grading, levelling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth minerals or ores; pile-drivers and pile-extractors; snow ploughs and snow-blowers. 6.4 The Commissioner (A) after going through the records has succinctly given his findings in Para 7 and 8 (OIA No. 127/2005). The Para 7 8 are reproduced herein belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this sub-classification while making it clear that - certain machines of this heading (e.g., pile-drivers, oil well drilling machines) 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-box and controls for gear-changing, and steering and braking facilities. Such assemblies are classified in heading 87.05 as special purpose motor vehicles, goes on to state that 84.30 includes, self-propelled machines in which one or more of the propelling or control elements referred to above are located in the cab of a machine mounted on a wheeled chassis, whether or not the whole can be driven on the road under its own power. The heading (i.e. 84.30) further includes self-propelled wheeled machines in which the chassis and the working machine are specially designed for each other and form an integral mechanical unit. In this case, the machine is not simply mounted on an automobile chassis like the machines described in the first paragraph above, but is completely integrated with a chassis that cannot be used for other purposes and may incorporate the essentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d machine in which chassis and the working machine are specially designed for each other and form an integral mechanical unit. Here the machine is not simply mounted on a truck chassis but the integration is so complete that chassis cannot be used for any other purpose though it may incorporate the essential automobile features to enable it to move on its own power. Had they been merely mounted on skids to facilitate easy transportation or towing the situation would have been completely different and classification under Chapter Sub-Heading No. 8705 would have been correct. But in view of the facts narrated above I find that classification under Chapter Sub-Heading No. 8430 is proper. Once the issue of classification is decided it follows that duty has been correctly paid and the appellants are also eligible for 551 benefits which were denied earlier, and the demand for differential duty has to be set aside. Hence, I pass the following order. ORDER I allow the appeal with consequential benefits, if any. Hence, we are of the view that the Orders-in-Appeals are legal and proper. We do not find any reason to interfere with the same, as the Commissioners have clearly distinguis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
