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TMI Blog2023 (1) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the classification under tariff. It is also settled principle of law that classification and assessment of the goods is to be done at the time of the clearance of the goods and in the form in which they are presented for assessment. The law in this respect has been settled by the Hon ble Supreme Court long back in case of DUNLOP INDIA LTD. MADRAS RUBBER FACTORY LTD. VERSUS UNION OF INDIA AND OTHERS [ 1975 (10) TMI 94 - SUPREME COURT ] where Hon ble Apex Court observed From the findings as recorded by the adjudicating authority in order-in-original and the technical opinion given by the IIT Professor, the only conclusion that can be arrived is that the goods in the form and manner in which they are cleared for sale to consumers are nothing but Solar Power Generating System or Solar Photovoltaic Lantern and the exemption claimed by the appellants in respect of same under Sl. No. 237 of Notification No. 6/2002-C.E. as amended (Sl. No. 18 of List 9) as claimed by them is admissible to the whole package. From the plain reading of the heading 8701, it is quite obvious and evident that all sort of tractors other than those classifiable under heading 8709 need to be classified under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,189/- + S&H ED.Cess 16,76,594/-) (Rupees Seventeen Crores Twenty Six Lakh Eighty Nine Thousand and two Hundred Only) on "Arjun Ultra - 1 CE" cleared by the Noticee during the period from April, 2007 to January 2011, under the provisions of Section 11A of the Central Excise Act, 1944. c] I also order recovery of interest at appropriate rate, on the amount of duty confirmed, under Section 11AB of the Central Excise Act, 1944. d] I also impose penalty of Rs. 17,26,89,200/- upon the Noticee under the provisions of Section 11AC of the Central Excise Act, 1944. e] Since penalty under Section 11 AC of the Central Excise Act, 1944 has been imposed upon the Noticee, I refrain from imposing penalty under Rule 25 of the Central Excise Rules, 2002." 1.3 Other two orders are identically worded except for the amounts hence not reproduced. 2.1 Appellant is engaged in the manufacture of various types of tractors. Tractors are wholly exempt from payment of basic excise duty vide Sr. No. 40 of the Notification No. 6/2006-CE dated 1.3.2006, as amended. 2.2 Acting on intelligence that appellant are also engaged in manufacture and clearance of tractor model having brand name "Arjun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or replaced through their authorized dealer. 2.5 Thus Appellant themselves differentiate between plain "Arjun Ultra-1 605 tractor" and "Arjun Ultra-1 CE 605 model/construction equipment". Admittedly "Arjun Ultra-1 CE 605 model/construction equipment" is fitted a special axle with "Tonplus technology" wherein the cross section of the centre bar is more as compared to normal tractors. As per the appellants, the models are not interchangeable as the axle is put at the time of manufacture itself making it suitable to perform specific function. 2.6 It. therefore, they have mis declared their product Arjun Ultra-1 CE as "tractor" falling under chapter sub-heading 8701.90.90 and wrongfully claimed exemption under Notification No. 06/2006-CE dt 16.11.2006 (Sr. No. 40) instead of properly classifying them under the appropriate heading 8429.51.00 as Front End Shovel Loaders. 2.7 A show cause notice dated 9.03.2011 was thus issued to the appellant asking them to show cause as to why: - a) The Arjun Ultra -1 CE model manufactured and cleared by them during the period from April ,2007 to January, 2011 should not be classified under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory without any fitment of any machinery. Thus, aforesaid HSN explanatory note is wholly irrelevant for the purpose of determining the classification of the tractor in question. ➢ Even after the fitment of front end loaders/dozers at the dealers end, Arjun tractor cannot be excluded from Heading 8701, for the reason that these fitments are detachable and do not form an integral part of the tractor. The term 'integral mechanical unit' has already been interpreted by the following HSN and SC Judgment; o HSN notes for heading 8705 under the title 'Motor Vehicles, Chassis or lorries combined with working machines' o HSN notes for heading 8430 under the title 'Machines mounted on tractor type bases. O LMP Precision Eng, Co. Ltd. [2004 (163) ELT 290 (SC)] ➢ Further, merely strengthening the axle of the tractor, cannot be treated as the special constructional design or reinforcement to make the vehicle as propelling base to form integral part of a machine. In fact, the strengthening was done due to breakages in the front axle of the earlier iterations of the Arjun Tractor while hauling agricultural implements. ➢ The fact that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department pertains to the tractor after fitment of additional implements and hence, not relevant for deciding classification of Arjun tractor. o Carrier Aircon Ltd. [2006 (7) TMI 8 (SC)] o Indian Aluminium Cables Ltd. [1985 (5) TMI 54 SC] ➢ It is a settled law that payment of duty under a particular tariff item must depend upon the facts of the case and not on the advertisement gimmick of the advertiser. In any case, the advertisements relied upon by the department tractor after fitment of additional implements and hence, not relevant for deciding classification o Blue Star Ltd. [1980 (6) ELT 280 (Bom)] Leukoplast (India) Pvt. Ltd. [1985 (20) ELT 70 (Bom)] Affirmed by Apex Court in 1994 (70) ELT 9 (SC) ➢ Undisputedly, there were 4041 tractors of model '605 DI Arjun Ultra-1' cleared during the period under consideration. As against this, only 330 loaders and 187 dozers were sold. This constitutes less than 13% of the total sales of the tractor model. Under these circumstances, the liability on the appellants ought to be restricted to the number of tractors which were fitted with front end loaders/dozers. Demand of duty on all 4041 tractors is thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore clear that when primarily and principally the machine has been built for carrying out the activities meant for material handling rather than those undertaken by normal tractors the same cannot be called a tractor when sold in the complete form as portrayed and advertised. ➢ In this case, the end use of the machine cleared by the appellant is to do heavy-duty loading, unloading, and dozing. This machine is designed to perform the work of a bulldozer, excavator, lifter, etc and is designed for mounting such types of equipment, hence it needs to be classified in chapter 84295100 and can not avail exemption of chapter 8701 which is given for tractor used for agriculture purpose only. Even road tractors which use a semi-trailer as mounting /equipment and have a capacity of more than 1800 CC are taxable. Also, tractors which are special purpose tractors falling under heading 8705 are taxable. Tractors which are used on the railway platform and kind of places are taxable in heading 8709. It means the exemption was for tractors used for agriculture purposes only. ➢ It is noteworthy that machines cleared by the appellant in this case, are having capacity of more than 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he propelling base uses traction or propulsion for the execution of this function. It is also specifically excludes the propelling bases of machines, in which the propelling base, the operating controls, the working tools and their actuating equipment are specially designed for fitting together to form an integral mechanical unit, as in the case of loaders, bulldozers, motorized ploughs, etc. 4. Thus it is established that those machines of chapter 84 can be distinguished from the tractors Chapter 87 by their special constructional features (shape, chassis, means of locomotion, etc.). IT is also observed that the said distinction has been clearly explained in the HSN as - "For propelling bases of the tractor type, various technical features relating essentially to the structure of the complete unit and to equipment specially designed for functions other than hauling or pushing should be taken into consideration. For instance, the propelling bases not covered by this heading incorporate robust elements (such as supporting blocks, plates or beams, platforms for swiveling cranes) forming a part of or fixed, generally by welding, to the chassis-body framework to carry the actuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principally manufactured, marketed and used as material handling equipment. More emphasis is given on material handling than farming. 9. It is further seen that FEL manufacturing companies, such as Bull Machines Ltd., M/s Chowgule and Company, and M/s Essaey ltd., are advising their customers to purchase "Arjun Ultra-1 CE from M/s Mahindra and Mahindra which is made suitable for attaching the material handling equipments. The advertising material of these companies show "Arjun-Ultra 1 CE" in use as loader or a crane. Not a single instance of "Arjun-Ultra 1 CE" being projected as farm equipment or as a "tractor" as defined in the Chapter Note 2 of chapter 87 is seen on the record. These machines are neither used for hauling or pushing of any vehicle, load or appliance and thus fail to satisfy the test of whether the same are eligible to exemption or not. It is noteworthy to mention that the promotional leaflets of these companies recovered from the dealer of M/s Mahindra and Mahindra, and that in most of the cases M/s Mahindra and Mahindra itself had issued invoices for front end loaders. 10. It is seen from the investigations conducted that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through e- mail, Sale Invoices are issued in the name of the concerned dealer of Mahindra & Mahindra." It is also observed that the noticee was issuing Central Excise Invoice such traded goods, admittedly, as per the directions of Head Office." It is observed that on receipt of the duplicate copy (transporters copy) of Central Excise invoice of the noticee, along with the certificate stating therein the details of their Area office (Stockyard), Invoice No. and Date, Dealers name and manufacturer (vendor) particulars, the manufacturer (vendor) clears the goods to the respective dealer of M/s Mahindra & Mahindra on either Central Excise Invoice or commercial invoice as the case may be and in turn, the dealer, the latter issues a retail sale bill to the customer. It is also admitted fact that the officials of M/s Mahindra & Mahindra also give necessary directions regarding the maintenance of the equipments and also give physical demonstrations to the customers as well as the staff members of the dealer. Thus it is clear that the customer upon seeing the advertisement floated for dozer places order on the dealer of the noticee and the customer is given delivery of the front ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EL/FED. Thus it is clear that the noticee is dealing with the sales- purchase of FEL/FED etc. in as much as the noticee places the purchase orders of these implements to their approved vendors who manufacture FEL/FED as per the designs supplied by the noticee. The implements are manufactured under the strict quality control of the noticee. These FEL/FED also bear brand name of noticee. The entire documentation of FEL/FED for whole of India is looked after by noticee's Appli Trac division located within their factory premises at Hingna, Nagpur. This is also corroborated from the statement of Shri Khole, Deputy Manager of the noticee recorded on 08-06-2010 under section 14 of the Central Excise Act, 1944. End Use Verification of the product - 16. ……. 20.6 Thus it is clear from the statement of Shri Nihar Banerjee, an actual user of the subject goods that, they had intended to purchase a Buller machine having front End Loader which effectively act as "Mini JCB" from M/s Bull Machines, Coimbatore who had recommended them to purchase Arjun Ultra -1 605 CE manufactured by the noticee as the Gross vehicle Weight (GVW) is 3500 Kg, the power is 56 HP and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross section of the centre bar is more as compared to other models. He also explained further that all Arjun Ultra-1 CE models are equipped with Tonplus technology axle and that the normal variety like 605 cannot be changed to 605 CE as the CE model comes with special axle which is not available as spare part in the market. 23. It is observed that the noticee in their reply dtd. 26/12/2012 to the show cause notice have stated that the vehicles of model 605 DI Arjun Ultra-I is a tractor and not construction equipment. It is however observed that as stated by Shri Shrikant Dube, Deputy General Manager in his statement recorded under section 14 of the Central Excise Act, 1944 on 15-02- 2011 the very name CE stands for "Construction Equipment and that Arjun Ultra 1 CE is equipped with a special grade front axle which is heavy duty and used for enhancing the load bearing capacity of the front axle of these models. Since this is an admitted position that the said machine is projected, used, designed and advertised as construction equipment the contention of the noticee is not sustainable. 24. The noticee has submitted that as per the photograph of the said goods when cleared fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra make, (iv) printed material depicting the said goods as material handling equipment rather than mere tractors, (v) training the personnel as well as the customer in handling the goods after the said equipment is fitted and ready for material handling, (vi) extending the warranty even after carrying out of the said fittings. Thus on one hand the noticee would claim the benefit of the exemption notification for tractor (for agricultural purpose) and on the other using the same as material handling equipment. The contention that the goods were cleared without any fitments is a clever idea adopted by the noticee to hoodwink the revenue department, as at the same time the orders were received for the entire Arjun Ultra Di-1 CE fitted with equipment which were later going to be fitted for use solely as material handling equipment. Thus the noticee was in a way, clearing the goods in dissembled condition. In this regard it is felt necessary to visit the decision of the Honourable Madras High Court reported in 1983(12)ELT 681 (Mad.) in the case of TS Cycles of India Ambattur v/s UOI in which it was held that "Interpretative Rule 2(a) of the Customs Tariff Act, 1975 provides that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the fact that the same was equipped with a modified axle capable of handling 1 MT load which the other model did not, and there after as per the customer's order convert the same into Loader, dozer as advertised. Hence the ratio of the aforesaid case is not applicable to the case of the noticee. In the present case the end use is very much relevant for the purpose of deciding the eligibility to exemption. 28. The noticee has cited a plethora of decision on similar lines as Dunlop referred above and I find that the ratio thereof is not applicable to the present case as same were rendered in a totally different situation unlike the present one. 29. It has been held in the case of Union Carbide v/s CC reported in 1986(24) ELT 325 (Tri.) that where the classification is related to the function of goods the predominant use of the goods is very relevant and important. 30. In CCE v/s Yash Laboratories also it was held that when terms of tariff require use of product to be taken into consideration such use is to be considered. [2001 (131) ELT 469(Tri.)] 31. In the case of Camlin Ltd., v/s CCE reported in [2000 (121) ELT 178 (Tri.)] it has been held that function of the articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view is supported by the decision of the Hon'ble CESTAT in the case of B K Products v/s CCE Patna reported in 1998 (104) E.L.T. 430 (Tribunal) in which it was held as under - 34.1 "The product is one for care of the hair, even as per the appellants' own description in advertisements as "for bright, thick, dark long hair, etc." It is a hair oil which has a pleasant, fragrant odour. Hence, it has been rightly treated as a perfumed hair oil and by virtue of Note 6 to Chapter 33 of the Schedule to the CETA, 1985, it has correctly been held to fall under CET sub- heading 3305.10. [paras 5.3, 6, 7]" Incidentally this decision has been upheld by the Apex Court [B.K. Products v. Collector - 2000 (121) E.L.T. A81 (S.C)]. 35. Thus from the foregoing it is seen that the advertisement material published by the marketing department of the noticee also highlights this model as basically a loader machine, it states categorically that the new Arjun Ultra-1 CE, with Front End Loader FEL 60 comes up with specialty of Tonplus technology which enables the machine for lifting of more than 1 Tonne load. The advertisement projects the product as useful in stone quarries for loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g goods or materials rather than the vehicles as laid down in chapter Note 2 to chapter 87 which defines "Tractors" as vehicles constructed essentially for hauling or pushing another vehicle, appliance or load. It is also an admitted position that the noticee purchase loading equipments (Front end loaders) from their vendors which are manufactured as per the designs and specifications provided by noticee themselves. The Front End Loaders (FEL /FED) etc. are manufactured under noticee's quality control and bear their brand name i.e. Mahindra & Mahindra. The noticee impart training to dealer's personnel for the attachment of FEL and also give necessary directions to them regarding the maintenance of the equipments and also give physical demonstrations to the customers as well as the staff members of the dealer. The User Manuals for so-called tractors inter alia revealed that labour free services are offered to the customers for these FEL/FED etc which can be availed by the attachment owner from any authorized Mahindra Tractor Dealer in India. The noticee even warranted the product i.e. FEL/FED etc. to the extent that the defective part will be repaired or replaced t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter. We are, therefore, not required to consider the history and chemistry of synthetic rubber and V.P. Latex as a component of SBR with regard to which extensive arguments were addressed by both sides by quoting from different texts and authorities. 31. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the Trade and its popular meaning should commend itself to the authority. 36. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry." In the case of Reliance Textile Industries Ltd. [1993 (63) ELT 67 (Bom)], Hon'ble Bombay High Court held as follows: "7. Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, is unsustainable." In the case of Mahindra and Mahindra Ltd. [2010 (262) ELT 366 (T)] tribunal has held as follows: "5. Factory as defined under Section 2(e) of the Act means:- "Factory" means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on". Rule 174 of erstwhile Central Excise Rules, 1944 and Rule 9 of Central Excise Rules, 2002 required every manufacturer to be registered and CBEC is empowered to specify conditions and limitations. The Board vide notification No. 35/2001-C.E. (N.T.), dated 26-6-2001 as amended has prescribed conditions. According to the notification, if a registered person has more than one premises, he shall obtain separate registration certificate for each premises. The fact that each premises should have a registration emerges from the provisions of Sec. 4 of the Act which requires determination of value at the place of removal. Naturally, place of removal has to be one place. What follows from the provisions relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs outside the factory premises. The Tribunal has, thus, rightly held that in such circumstances, the cost of bullet proofing could not be added to arrive at the transaction value. The order of the Tribunal does not warrant any interference." In case of Aura Solar Products Pvt Ltd. [2021 (44) GSTL 82 (T)] following has been held: "4.3 From the facts as determined and recorded by the adjudicating authority it is clearly evident that the manner in which the goods were being cleared by the appellant was in a package comprising of two lanterns along with a solar photovoltaic panel. SPV Panel having capacity and provisions to charge both the lanterns simultaneously. The packaging and the manner of marketing the product also suggest that both the lamps in the package are marketed as solar lanterns. It is an admitted fact and a fact not in dispute that appellants do not sell the single lantern individually or separately. That being so Revenue has no jurisdiction to vivisect the package and classify one lantern separately. The classification of the goods need to be determined in the form and manner in which the same is cleared and not by unbundling/vivisecting the package into individu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities below." 4.5 Before we undertake any discussion on the subject the we would like to reproduce the tariff entries of Chapter 84 & 87: 8429 Self Propelled bulldozers, angledozers, graders, levelers, scrapers, mechanical shovels, excavators, shovel loaders, tamping machines and road rollers. - Bulldozers and angledozers: - Graders and Levelers: - Scrapers: - Tamping machines and road rollers - Mechanical shovels, excavators, shovel loaders: 8429 51 00 -- Front end shovel loaders 8429 52 00 -- Machinery with superstructure a 360 degrees revolving 8429 59 00 -- Other. Chapter 87 2. For the purposes of this Chapter, "tractors" means vehicles constructed essentially for hauling or pushing another vehicle, appliance or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilizers or other goods. Machines and working tools designed for fitting to tractors of heading 8701 as interchangeable equipment remain classified in their respective headings even if presented with the tractor, and whether or not mounted on it. 8701 TRACTORS (OTHER THAN TRACTO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Note, it would fall under Chapter Heading 49.01. If it is so, it would not be covered by sub-heading 4911.99. 55. In this connection, we may refer to a three-Judge Bench decision of this Court in Collector of Central Excise, Shillong v. Wood Craft Products Ltd. - 1995 (77) E.L.T. 23 (S.C.) = (1995) 3 SCC 454. The Court, in that case, considered the question whether 'plywood' was classifiable under sub-heading 4408.90 or sub-heading 4410.90? HSN Explanatory Notes was considered by this Court and it was observed; "We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, therefore, any dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. The definition of a term in the ISI Glossary, which has a different purpose, cannot in case of a conflict, override the clear indication of the meaning of an identical expression in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling a tractor, but specially designed, constructed or reinforced to form an integral part of a machine performing one or more of the functions mentioned in this heading (lifting, handling, etc.). Presented separately, such propelling bases also fall in this heading, as incomplete machines having the essential features of complete machines of the same kind. Propelling bases potentially classifiable in several of the headings 84.25 to 84.30 because they can be equipped with several different working parts, are classified in accordance with Note 3 to Section XVI or by application of Interpretative Rule 3 (c). For more detailed criteria for distinguishing between the tractors of heading 87.01 and the propelling bases of this Chapter, see Explanatory Note to heading 87.01. (2) Machines mounted on automobile chassis or lorries. … (c) Machines on floating structures proper to Chapter 89…. Excerpt Explaining the goods classifiable under Chapter 84.29 84.29 - Self-propelled bulldozers, angledozers, graders, leveilers, scrapers, mechanical shovels, excavators, shovel loaders, tamping machines and road rollers. - Bulldozers and angledozers: 8429.11 -- Track laying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pedestrian controlled tractors 8701.20 -Road tractors for semi-trailers 8701.30 - Track-laying tractors 8701.90 - Other For the purposes of this heading, tractors means wheeled or track-laying vehicles constructed essentially for hauling or pushing another vehicle, appliance or load. They may contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilisers or other goods, or provision for fitting with working tools as a subsidiary function. The heading does not cover propelling bases specially designed, constructed or reinforced to form an integral part of a machine performing a function such as lifting, excavating, levelling, etc., even if the propelling base uses traction or propulsion for the execution of this function. The heading covers tractors (other than tractors of the type used on railway station platforms, falling in heading 87.09) of various types (tractors for agricultural or forestry work, road tractors, heavy duty tractors for constructional engineering work, winch tractors, etc.), whatever their mode of propulsion (internal combustion piston engine, electric motor, etc.). It also includes tract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterchangeable working tools are classified in their appropriate headings, even if presented with the tractor, and whether or not mounted on it, while the tractor with its operating equipment is classified in this heading. In the case of articulated motor lorries with semi-trailers, tractors coupied to semi-trailers, and heavy duty tractors coupled, in the same way as to semi-trailers, to working machines of Chapter 84, the hauling element is classified in this heading whereas the semi-trailer or the working machine is classified in its appropriate heading. On the other hand, this heading does not cover the propelling bases of machines referred to, for example, in headings 84.25, 84.26, 84.29, 84.30 and 84.32, in which the propelling base, the operating controls, the working tools and their actuating equipment are specially designed for fitting together to form an integral mechanical unit. Such is the case with loaders, bulldozers, motorised ploughs, etc. As a general rule, propelling bases forming an integral part of a machine designed for handling, excavating, etc., can be distinguished from the tractors of this heading by their special constructional features (shape, chass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Heading 8705.20, even if we assume that the explanatory note to the Section indicates to contrary, nevertheless the express words of the Tariff Heading would prevail. This also answers the submission made on behalf of the respondent that the Section notes relevant to Chapter 84 of the HSN indicated that the goods manufactured by the respondent were classifiable under Heading 84.30. In any event the particular Section Note referred to by the respondent does not support the submission that the goods were classifiable at any material point of time under Heading 84.30. The Section Notes relied on read : "Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function." "Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue that the tractors manufactured and cleared by the appellant are classifiable under this category. 4.11 Circular No 838/15/2006-CX dated 16.11.2006 do not state that the exemption under this entry is admissible only to the agricultural tractors. The text of the said circular is reproduced below: "Representations have been received in the Board that certain field formations are proposing to charge excise duty on agricultural tractors on the ground that besides agricultural work, these tractors are used for haulage of farm products, fertilizers, etc. thereby qualifying as "road tractors for semi- trailers" attracting Central Excise duty @ 16%. "Road tractors for semi-trailers" attract Central Excise duty at the rate of 16%, if the engine capacity is more than 1800 cc. 2. Tractors falling under Chapter heading 8701 were exempted from excise duty in Budget 2004-05 with the intention to give exemption to agricultural tractors, in order to encourage farm sector. A tractor primarily designed and meant for agriculture purposes can also be incidentally used to take goods to the nearest market. But that is an incidental use, and such tractors are not primarily designed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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