Drilling rigs on chassis are classified as drilling machinery, not special purpose motor vehicles, when the chassis is not separately usable.

Drilling rigs mounted on motor vehicle chassis were analysed under the Central Excise Tariff using the HSN explanatory notes and prior Tribunal rulings. The key principle applied was that where the chassis cannot be separately used as a motor vehicle, mounting drilling equipment on it does not by itself create a motor vehicle or special purpose motor vehicle. On that basis, the rigs were classified under Heading 84.30 as drilling machinery, not under Heading 87.05. The departmental classification was therefore set aside and the assessee's classification prevailed.

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Issues: Whether drilling rigs mounted on motor vehicle chassis are classifiable under Heading 84.30 or under Heading 87.05 of the Central Excise Tariff Act.

Analysis: The product was examined in the light of the HSN explanatory notes and prior Tribunal decisions. It was noted that water well drilling rigs mounted on motor vehicle chassis had already been treated as classifiable under Heading 84.30 where the chassis could not be separately used as a motor vehicle. The record did not establish that the chassis in the present case could be separately used as a motor vehicle. The decision also relied on the principle that building a body or equipment on a duty-paid chassis does not by itself amount to manufacture of a motor vehicle or a special purpose motor vehicle.

Conclusion: The drilling rigs mounted on chassis were held classifiable under Heading 84.30 and not under Heading 87.05, in favour of the assessee.

Final Conclusion: The tariff classification adopted by the department was set aside and the appeal succeeded.

Ratio Decidendi: Where drilling equipment mounted on a chassis does not form an independently usable motor vehicle and the chassis remains incapable of separate use as such, the goods are classifiable as drilling machinery rather than as a special purpose motor vehicle.

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