TaxTMI 
TaxTMI 
TaxTMI 
2011 (5) TMI 605
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....dhpur (hereinafter referred to as appellant) submitted a bill of entry No.12775 dated 25/07/1994 for clearance of top drive heavy duty drilling Rig Truck mounted (1 No.) comprising of drill module, auxiliary air compressor, mandatory drilling accessories and spare parts for 2000 hours of operation (hereinafter referred to as goods). The bill of entry was assessed under Customs tariff heading No.8430.41 and duty was levied @ 25% adv. plus additional duty 10% adv. under Notification No.61/94-Cus and 62/94-Cus. The spare parts were assessed under heading 8431.43 and duty was levied @ 25% advalorem + additional 25% advalorem. The said bill of entry was assessed on 01/08/94 and the importers paid the duty of Rs.87,52,156/- on 08/08/94. It is also on record that before assessment and clearance in question, the Customs Officers had examined the goods in detail and the documents were pre-audited and the officer-in-charge of the audit had also examined the goods in person and finally accepted the classification under Chapter sub-heading 8430.41. Subsequently, a less charge notice was issued to the appellant vide notice dated 20/01/95 wherein it was stated that the appellant had short paid C....
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....ical unit. It was also submitted in the said letter that the appellant would pay for the appropriate fees of the technical expert for giving the opinion after inspecting the drilling rig and also suggested that the department could depute the officers from Mumbai Customs for this purpose. The appellant filed a reply to the less charge memo vide letter dated 22/03/2002 narrating the sequence of events and also enclosed a copy of a certificate issued by the Prof. G. Agarwal, Head of the department of Mechanical Engineering, Malaviya Regional Engineering College, Jaipur. The professor after examining the goods in question vide his certificate dated 16/03/2002 opined that the mobile drilling rig is having a sole function of drilling tube wells. The driving unit and the drilling rig are specially designed for each other and is a single integrated mechanical unit. The Professor further clarified that the drilling rig and the driving unit are not simply mounted on the automobile chassis but are completely integrated with the chassis and thus cannot be separated from each other and the whole unit cannot be used for any other purpose, such as transportation of persons or goods. The appellan....
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....hole 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 . 2.2 The Assistant Commissioner of Customs, Mumbai Customs House after hearing the appellant on 08/03/2002 and after going through the technical literature and certificates produced by the appellant issued an order classifying the products under heading 87.05 on the following grounds:- (i) the chassis in the subject case is not modified and no power take off devise was installed for transferring the power from the truck engine to the drilling rig and in the catalogue and technical specification it is clearly shown that the engine of the truck and engine used as a prime mover for driving compressor and hydraulic pumps (which supply power to the rig) are two separate and different engines. (ii) as per the technical specification, the complete drill with main compressor and 5x6 mud pump unit is mounted on a heavy duty 6x4 wheel drive truck chassis suitable for off hi....
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....wer authority and dismissed the appeal. The appellant is before us against the impugned order. 3. The appellant s contention are as follows:- 3.1 The goods were examined by the Customs at the time of importation and clearance and after thorough examination, the Customs accepted the classification under heading 8430.31and allowed the clearances of the goods. Thereafter, on the base of CRA objection, the department had issued a less charge memo proposing to classify the product under heading 87.05 and demanding differential duty. No grounds have been adduced for the revised classification in the less charge memo. 3.2 The appellant had requested the department to come and gets the goods examined and tested by the technical experts, which the department has failed to do. Therefore, in spite of the appellant s offer for detailed inspection and examination of the product, the department failed to avail of the opportunity. 3.3 The appellant had produced an expert s opinion from the Head of the Department of Mechanical Engineering, Malaviya Regional Engineering College, who has clearly and categorically stated that the mobile drilling rig as a whole, is whee....
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....e whole can be driven on the road under its own power. The heading 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 the chassis that cannot be used for other purposes and may incorporate the essential automobile features referred to above. Therefore, it is their contention that even as per the HSN explanatory notes, their product merit classification under heading 8430.31. 4. The appellant also placed reliance on the judgement of the Hon ble apex Court in the case of CCE, Baroda Vs. LMP Precision Engineering Co. Ltd., 2004 (174) ELT A-189. It is their contention that wherever there is evidence to support the finding that the goods in question were self -propelled machine, where chassis and the working machines had been designed for each other and where both the chassis and the machine formed an integral unit, the product would merit classification under heading No. 84.30. Only in respect of th....
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....ling or control elements are located in the cab of a machine mounted on a wheeled chassis, whether or not the whole can be driven on the road by its own power. According to the JCDR, in the instant case there are two machines, one which provides power to truck chassis and the other which provides power to the drilling rig. Therefore, the chassis and the drilling rig are not integrally connected. 5.3 As per the manufacturer s certificate, they have purchased a truck chassis separately and modified it and thereafter, mounted the drilling rig on the chassis by processes such as welding, fastening, etc. This shows that the chassis and working machine are not specially designed for each other. Therefore, the product cannot be classified under heading 84.30 as contended by the appellant. 5.4 The Ld. JCDR would further submit that under heading 87.05, there is a specific entry for mobile drilling derricks under sub-heading No. 8705.20 and according to the HSN explanatory note, the said heading specifically includes lorries fitted with a derrick assembly, winches and other appliances for drilling, etc. The product in question satisfies this description and, therefore, right....
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....as not keen to get the goods inspected/examined by technical experts and arrive at a considered decision while undertaking the classification of the product in question. 7.3 On the other hand, the appellant has obtained expert technical opinion from the Head of Mechanical Engineering Department of Malaviya Regional Engineering College, Jaipur. They have also obtained a certificate from the manufacturer of the product regarding the nature of the product and its composition, etc. From these certificates, it is clear that the chassis, driving unit and drilling rig are specially designed for each other and they form an integrated mechanical unit. The drilling rig and driving unit are not simply mounted on the automobile chassis, but are completely integrated with the chassis and these cannot be separated out from each other and the whole unit cannot be used for any other purpose, such as transporting persons or goods. The manufacturer has further certified that the chassis brought to their works had to be modified/altered to accommodate the mounting of all these sub assemblies, which process involved fabrication in addition to cutting/welding/fastening and after assembly it bec....
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....ed 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 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 can not be used for other purposes and may incorporate the essential automobile features referred to above. 7.5 While the department is relying on the first paragraph (underlined portion), the appellant is relying on the second paragraph (in italics) of the HSN notes detailed above. The department s contention is that the power source for the vehicle and the drilling rig are separate and the control mechanisms are not in the cab of the vehicle and hence, the product in question cannot be classified under heading No. 84.30 and merits classification under heading No. 87.05. The appellant s contention is that the chassis and the working machine (drilling rig) are specially adapted and des....