TaxTMI 
TaxTMI 
2021 (3) TMI 1359
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....ection 28F(3) of the Customs Act, 1962 read with Regulation 31 of CAAR Regulations, 2021. 2. The question on which advance ruling has been sought is classification of underground mining trucks. The applicant is stated to be a leading supplier in equipment, tools, service, and technical solutions for mining and construction, specifically, rock drilling/cutting, crushing/screening, loading/hauling, tunnelling, quarrying, breaking and demolition. The applicant intends to import underground mining trucks from its overseas group entities. These underground mining trucks are designed to transport rock material safely/efficiently/reliably in extreme conditions and their usage is limited to mining operations. These underground mining trucks are used in underground metal mining for :- • Mucking and tramming of abrasive ore/waste rock from drivers/cross cuts • Mucking - removal of blasted ore (muck) • Tramming - moving material from extraction area to another place The applicant has summarised the technical specifications and usage of the proposed imports through the example of model Sandvik TH 320 underground mining truck, some characteristi....
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....nly for the purpose of soliciting sales and use of such terminology doesn't undermine the machinery of its mining capabilities. 4. The applicant was heard on 23-2-2021. S/Sri T. Venkateswaran, Advocate; and Atul Kale, General Manager (Logistics Operations) represented the applicant. The Learned Counsel explained the product design, specifications, and usage in considerable detail to substantiate their claim that the product in question is a mining machinery and not a motor vehicle. My attention was drawn to the provisions of Motor Vehicle Act, 1988 wherein a "motor vehicle" or "vehicle" is defined as any mechanically propelled vehicle adapted for use upon roads ... (emphasis supplied). It was strongly argued that the proposed import, i.e., Sandvik TH 320 underground truck is not adapted for on road use, and therefore, cannot be classified under Chapter 87 of the Customs Tariff, which is meant for motor vehicles. It was also emphasized by the Learned Counsel that it is important to distinguish the term 'transportation' from 'movement' and since the intended import is only for moving mined ore/muck from the mine, it cannot be called as a vehicle for transportation of goods. D....
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....ether for EXIM or for domestic trade, support is often taken from the WCO's classification system and its explanatory notes and classification advices. 6. The Harmonized Commodity Description and Coding System, generally referred to as 'Harmonized System' or simply 'HS'/'HSN', is a multi-purpose international product nomenclature developed by the World Customs Organization (WCO). It comprises more than 5,000 commodity groups; each identified by a six-digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification. The system is used by more than 200 countries and economies as a basis for their customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HSN. The HSN contributes to the harmonization of customs and trade procedures, and the non-documentary trade data interchange in connection with such procedures, thus reducing the costs related to international trade. It is extensively used by Governments, international organizations and the private sector for many other purposes such as internal taxes, trade policies, m....
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.... 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 same context in the HSN. In the HSN, block board is included within the meaning of the expression "similar laminated wood" in the some context of classification of block board. Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian Tariff of a different intention." While recognizing that all the observations of the Hon'ble Supreme Court of India as reproduced above pertain to classification under central excise and....
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....fic product under consideration in this application is not designed or intended for use in such activities. They are admittedly built to be used in mines, but not for tasks such as grading, levelling, scraping, excavating, tamping, compacting etc. 9. The principal use of SANDVIK TH320 trucks is movement of goods, by way of mucking (removal of blasted ore) and tramming (moving material from extraction area to another place). The functions of removal and movement of material, prima facie, would fall under the purview of 'transport of goods' and not under 'mining machinery'. It is, therefore, necessary to evaluate an alternate heading that would more appropriately cover the product under consideration. Goods whose primary function is transport of goods are covered under Chapter 87. More specifically, I find that CTH 8704, which is reproduced in a preceding paragraph, covers motor vehicles for transport of goods. CTSH 87041 01 01 covers dumpers designed for off-highway use. Further classification under subheadings is on the basis of payload capacity. 10. The HSN explanatory notes under CTH 8704 state that the heading covers, inter alia, - • Dumpers - sturdi....
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....se contentions. The question of referring to the provisions of Motor Vehicle Act or any other statute would arise only when the terms of the tariff headings leave some ambiguity. As per Rule 6 of the general rules for the interpretation of import tariff, for legal purposes, the classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading notes and, mutatis mutandis, to the above rules. Thus, the terms of the tariff headings and sub-headings is the primary determinant of classification. Having established this, the next question to ask is - do the terms of the tariff headings leave any scope for doubt? The answer to that question, without any doubt, is in the negative. As explained above, the Heading 8704, clearly and explicitly covers motor vehicles used for transport of goods (which would also include excavated or other materials) and those used in mines to transport coal or ores. The terms of the heading also state that vehicles designed for "off-highway use are covered CTH 8704 10. The relevant HSN explanatory notes also make the above position clear. The notes mention that the vehicles fall....
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.... is advertised/marketed as a truck for moving ore/muck. The decisions cited to drive home the settled proposition of law that a specific heading would prevail over a general heading actually undermine the applicant's case in so far as in the present proceedings, it is proved beyond an iota of doubt that underground mining trucks are not actually used in core mining functions, and on the other hand, are used for the ancillary functions of mucking and tramming. Therefore, the Heading 8704 is a more specific entry for such trucks instead of Heading 8430, as contended. I am unable to agree with the applicant's contention that in case of competitive headings, the heading beneficial to the assessee shall prevail because of my clear finding that in this case the issue is not as contentious as it has been made out to be and that based on the chapter/HSN explanatory notes, classification of underground mining truck can be established without the aid of more rigorous legal tools. The ratio of the decision of the Hon'ble Tribunal in the case of Chief Engineer, Ground Water Department [Mumbai 2011 (5) TMI 605 = 2011 (272) E.L.T. 551 (Tri. - Mumbai)] and the Hon'ble Orissa High Court in the cas....