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TMI Blog2011 (5) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... the experts on the subject matter. They are merely referring to the explanatory notes without verifying and proving what are the facts applicable to the present case. It is for the department to establish the case of classification of product under any particular heading which it has miserably failed in the instant case. Whereas, the appellant has done their bit to support the classification claimed by them by obtaining expert s certificate and also the manufacturer s certificate in respect of product in question - in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... closed a leaflet of T-685 rotadrill heavy duty truck mounted drill rigs, which were imported by them. In the said letter they stated that the truck model used in the said drilling rig is Ford LTS 8000 and the drilling rig is fastened to the main frame of the truck chassis on which drill module is assembled by way of permanent fastening through welding and the said rig is hydraulically connected on the main frame through the outriggers for leveling of drill rig. It was further clarified by the appellant that the said imported drill rigs are self-propelled wheeled machines in which chassis platform is the working platform of the machine and the machine and trucks are specially designed for each other and form an integral mechanical cum hydraulical unit. They also stated that the machine as a whole can be used only for drilling or boreholes and the truck cannot be separated from the drill rig machine. Further, vide letter dated 07/03/2002, the appellant s Advocate requested for a copy of the examination report recorded on the duplicate copy of the bill of entry at the time of importation so as to enable them to defend their case. It was also stated that the drill rig imported is still ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company. 4. That the various components of the drilling rig namely (a) Mast Assembly (b) Top Drive Head (c) Pull Down/Pullback (d) Air Compressor with power unit (e) Casing hoist (f) Jib Boom & winch (g) Sandline winch (h) Water & Foam Injection system (i) Hydraulic Breakout system (j) Line oiler (k) Operators platform (l) Blow down system etc. were integrally assembled on the carrier chassis. 5. The carrier chassis brought to our works had to be modified/altered to accommodate the mounting of all these sub assemblies. This process involved fabrication in addition to cutting/welding/fastening. After assembly, it becomes a mechanical and hydraulically operated drilling rig completely integrated with the chassis. 6. After assembly, the drilling rig cannot be separated from the carrier chassis. In fact, the sole purpose of the carrier chassis now, is to impart mobility to the drilling unit to enable it to be shifted from one drilling site to the other - wherever a tube well is required to be drilled. The carrier cannot be used for any other purpose such as transportation of persons & goods. 7. Thus, after assembly, the functional capacity and essential characteristics of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms integral mechanical unit. In this case, the machinery is not simply mounted on an automobile chassis like the machine described in the first paragraph above but is completely integrated with the chassis that cannot be used for any other purpose and may incorporate the essential automobile features referred to above. 2.4. The Ld. Commissioner (Appeals) observed that in respect of product in question the chassis and working machine are not specially designed for each other; neither are they mechanically integrated with each other, though through extensive assembly work in the workshop and by structural modifications in the chassis, the drill has been mounted inseparably. The chassis and the working machine are attached permanently and interdependent but there is no mechanical integration and they cannot be treated as completely integrated within the scope of explanatory notes. 2.5. He further observed that the chassis or the carrier vehicle has retained its identity and if the chassis is dismounted from the working machine it can be used as self- propelled wheeled machine. He also held that mounting operations though extensive and structural have not brought in mechanical int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herever a tube well is required to be drilled. The carrier cannot be used for any other purpose such as transportation of persons and goods. 3.4 They also certified that the whole machine is centrally controlled hydraulically from the operator s station located at the left side of the mast - in the rear of the chassis. During drilling, the carrier chassis is jacked off the ground by using the outrigger (leveling jacks) assemblies located on the front and rear of the unit. They have also certified that the cost of drilling rig supplied by them to the appellant is US $ 720471 and the drilling rig was mounted on a Ford model LTS 8000 carrier chassis, which had been purchased by them from M/s. Ford Motor Company for US $ 75,412.35. This certificate shows that the cost of drilling rig is almost 90% and the carrier chassis constitutes only about 10% of the total value. In the light of these evidences the appellant submits that the product merit classification under heading 8430.31. The appellant would further submit that as per the HSN explanatory note heading 84.30 includes self - propelled machine in which one or more of the propelling or control elements referred to above are loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading No. 87.05. In the said case, the Tribunal had further held that the onus of proving that the goods are classifiable under a particular heading/sub-heading is on the Revenue even if the assessee has not led in any evidence. The Tribunal relied upon the judgement in the case of Hindustan Ferodo Ltd., Vs. CCE, Bombay 1997 (89) ELT 16 (SC) and Singhla Sales Corporation Pvt Ltd., Vs. CC, Amritsar 2002 (141) ELT 806 (Tri-Del) while coming to the above conclusion. 5. Ld. JCDR on the other hand would contend as follows:- 5.1 In the instant case the demand has been raised within time and, therefore, even if there was any mistake in the original assessment, the same can be rectified and appropriate duty can be demanded. He relies on the HSN explanatory notes and the tariff description under sub-heading Nos. 84.30 and 87.05. Sub heading 8430.31, which is the classification claimed by the appellant, refers to self - propelled other boring or sinking machinery whereas heading No. 8705.20 refers to Mobile drilling derricks . 5.2 As per the HSN explanatory note in respect of heading No. 84.30, to be classified under this heading, the product should satisfy the criteria that the self p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and our findings are discussed below. 7.1 From the records it is seen that the goods under importation were examined not only by the examination staff but also by the audit staff, before accepting the classification under heading No 84.30 and allowing clearances thereafter. In spite of a specific request from the appellant, the department has not submitted a copy of the examination report of the examination/inspection conducted by the department at the time of clearance of the goods. The department has not produced a copy of the said examination report even before this Tribunal. Therefore, it is not known what was recorded in the examination report on the basis of the visual inspection/examination by the Customs authorities at the time of clearance. Since the classification under heading No. 84.30 has been accepted by the department, it is reasonable to presume that the goods on examination/inspection was found conforming to the requirements of the said heading. 7.2 It is also on record that the appellant offered to the department for the inspection of the goods and take technical opinion, if necessary. However, the department did not choose to do so. This again shows that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g arguments without inspecting the goods and without controverting the expert s opinion submitted by the assessee does not in any way espouse the cause of the department. The officers of the department are not experts themselves to decide whether something is integrally connected or not; that has to be left to the wisdom of technical experts, who are competent to make such certification. 7.4 Both the appellant and the department place reliance on the HSN explanatory notes pertaining to heading No. 84.30 and the relevant portion is reproduced below: (2) Machines mounted on automobile chassis or lorries: 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. On the other hand, this heading includes self-propelled machines in which one or more of the propelling or control elements referred to above are located in the cab o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsar -2002(141) ELT 806. 7.7 We also observe that the cost of the drilling rig forms almost 90% of the cost of the whole product whereas the cost of the automobile chassis forms only about 10% of the cost as evidenced by the manufacturer s certificate. Though cost may not be an essential criterion in determining classification, it is certainly a relevant criterion. The essential nature of the product both in terms of function as also in terms of cost comes from the drilling rig. The automobile chassis is only for the easy transportation of the machine from place to place. Thus from a functional point of view also , the product merits classification under heading No. 84.30 rather than under heading No. 87.05. 8. The department has placed reliance on the judgement of the apex Court in the case of LMP Precision Engineering (supra). The facts of that case pertained to a situation where no evidence was produced to come to the conclusion that the chassis and working machine were designed for each other and formed an integral unit. In the absence of such evidence, the apex Court held that merely on the averments made by the parties, the Tribunal could not have come to the conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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