Tariff classification of drilling rigs on vehicle chassis follows specific HSN entry, with extended limitation upheld for incomplete disclosure.

Water well drilling rigs mounted on motor vehicle chassis were treated as special-purpose motor vehicles under Tariff Heading 87.05, because the express tariff description and HSN notes prevailed over the broader mobile-machinery entry in Heading 84.30; the record did not show an integrated mechanical unit. The same goods were also found to attract the extended limitation period, because the classification list did not give a full and true description and failed to disclose that the rigs were mounted on vehicles, amounting to suppression rather than a mere legal error in classification. The penalty enhancement refusal was left undisturbed.

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Issues: (i) Whether water well drilling rigs mounted on motor vehicle chassis were classifiable under Tariff Heading 84.30 or Tariff Heading 87.05; and (ii) whether the extended period of limitation under Section 11A could be invoked on the facts of the case.

Issue (i): Whether water well drilling rigs mounted on motor vehicle chassis were classifiable under Tariff Heading 84.30 or Tariff Heading 87.05.

Analysis: The relevant tariff scheme and HSN notes showed that while Heading 84.30 covers mobile machines in general, machines mounted on automobile chassis as special-purpose motor vehicles are covered by Heading 87.05. The decisive factor was whether the chassis and the working machine formed a complete integrated mechanical unit or were merely mounted on a chassis. The record did not support the view that the rigs were such integrated units. The HSN also specifically included mobile drilling derricks under Heading 87.05, and the express tariff description was controlling.

Conclusion: The goods were classifiable under Tariff Heading 87.05 and not under Tariff Heading 84.30, in favour of Revenue.

Issue (ii): Whether the extended period of limitation under Section 11A could be invoked on the facts of the case.

Analysis: The classification list did not contain a full and true description of the goods as required by Rule 173B. The description in the classification list did not tally with the invoices and failed to disclose that the rigs were mounted on vehicles. This was not a case of a mere erroneous legal classification after full disclosure, but a failure to make the required disclosure. The later conduct of classifying the goods under Heading 87.05 after the exemption notification also supported the finding that the original description was incomplete.

Conclusion: The extended period of limitation was validly invoked, in favour of Revenue.

Final Conclusion: The tariff classification and limitation findings were decided against the assessee, while the Tribunal's refusal to enhance penalty was left undisturbed, resulting in a partial allowance of the appeals.

Ratio Decidendi: For tariff classification, the express and specific HSN entry prevails over a general entry, and mobile drilling rigs mounted on motor vehicle chassis fall under Heading 87.05 when they are not shown to be an integrated mechanical unit; a failure to give the statutorily required full description in the classification list constitutes suppression permitting invocation of the extended limitation period.

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