TaxTMI 
TaxTMI 
2003 (12) TMI 57
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....d has been raised is 1-3-86 to 29-2-88. During this period the respondent-assessee had cleared water well drilling rigs mounted on chassis (hereinafter referred to as "the goods") after classifying the same under Tariff Heading 84.30. On 1st March 1988, a Notification was issued by the Central Government under Rule 8 of the Central Excise Rules, 1944 granting exemption from payment of the full amount of excise duty to "drilling rigs mounted on motor vehicle chassis, falling under Heading No. 87.05 of the Schedule to the Central Excise Tariff Act, 1985. The Notification reads thus : "Effective rate of excise duty on drilling rigs mounted on motor vehicle chassis. - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts drilling rigs mounted on motor vehicle chassis, falling under heading No. 87.05 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of the duty of excise leviable thereon which is specified in the said Schedule, as is equivalent to the duty of excise leviable with reference to that part of the value thereof which represents the value of the chassis and the com....
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....he description given in the classification list for the period in question. It had not been disclosed in that classification list that the rigs in question were mounted on vehicles. It was only subsequent to the exemption notification issued on 1st March, 1988 that the description of the goods had been given justifying classification of the goods under Tariff Heading 87.05. The submission of the respondent that the invoices, the gate passes and also the contracts filed by the respondent for the relevant period gave a true description of the goods to the excise authorities was rejected by the Adjudicating Authority. It was held that the respondent was obliged to make full disclosure in the application for approval of the classification list. In addition to this, there was certain quantity where the respondent had submitted separate invoices to the excise authority, one relating to the Chassis and the other relating to the rigs mounted on such Chassis. In the circumstances, the demand raised in the show cause notice was confirmed and penalty was imposed on the assessee as well as on its directors. Confiscation of the land, building, plant, machinery belonging to the assessee was also....
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....As far as the factual aspect is concerned it is submitted that the Tribunal had proceeded on the basis of no evidence whatsoever to come to the conclusion that the goods in question were integrated units. It is also pointed out that the Tribunal failed to note that after the exemption was granted in respect of goods under Tariff Heading 87.05, the respondent had itself classified the goods under that Tariff Heading. On the question of limitation it was submitted that the application for approval of the classification list for the period in question clearly showed that the respondent had not described the goods manufactured by it correctly or fully and that this clearly brought the case within the ambit of Section 11A. 10.Learned Counsel appearing on behalf of the respondent has relied upon the notes to Section XVI of the HSN to submit that the Tariff Headings had to be construed with reference to the object with which a multi-purpose machine like the goods in question had been manufactured. According to the respondent that it was therefore clear that the goods in question were classifiable with reference to its primary object, namely, drilling and that the appropriate Tariff Headi....
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....oses of interpreting the tariff entries in the CETA. The corresponding entries in HSN are also numbered as 84.30 and 87.05 and are included in Section XVI and XVII respectively. The explanatory note to Tariff Heading 84.30 in the HSN with regard to "Self-propelled and other mobile machines states that 84.30 covers not only fixed or stationary machines but also mobile machines, whether or not self propelled except machines mounted on transport equipment of the type falling under Sec. XVII. The exceptions have been detailed under three heads namely, (A) machines mounted on vehicles proper to Chapter 86; (B) machines mounted on tractors or motor vehicles proper to Chapter 87 and (C) machines on floating structure proper to Chapter 89. We are concerned with (B). Within this category there are two sub-classifications, namely, (1) machines mounted on tractor type bases and (2) machines mounted on automobile chassis or lorries. Up to this point it is clear that machines covered by 84.30 if mounted on automobile chassis or lorries are classifiable under Chapter 87 by virtue of the exceptions to the explanatory note (B)(ii). However, this sub-classification while making it clear that - "ce....
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....the evidence on record and has come to the conclusion that there was no such integration as required and contemplated by the language of the explanatory note to Heading 84.30, the Tribunal appears to have accepted, without more, what had been stated by the assessee in answer to the show cause notice. The statement in reply to a show cause notice is not evidence, and the Tribunal erred in treating it as such without any evidence in support of the respondents' case. The decision of the Tribunal was clearly perverse being unsupported by the material on record. 15.Besides the Tariff Headings in the HSN specifically include "mobile drilling derricks" under Tariff Heading 8705.20. A derrick has been defined in the Concise Oxford Dictionary (7th Edition) at page 258 as a : "contrivance for moving or hoisting heavy weights, kind of crane with adjustable arm pivoted at foot to central post, deck, or floor; framework over oil-well or similar boring". Therefore mobile oil rigs such as those manufactured by the respondent would fall within Chapter 87 and not 84 of the HSN. This is made further clear by the note appended to the Tariff Heading 8705 of the HSN which says that the Tariff Heading ....
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....note to the Headings for the machines under Chapter 84.25, 84.28, 84.29 and 84.30 but also to the explanatory notes to the chapters and headings of Sec. XVII. That Section includes Chapter 87. We have already noted that the Tariff Heading 8705.20 clearly includes machines of the kind manufactured by the respondent and the Tribunal erred in holding to the contrary. 18.The next issue is whether the extended period of limitation could be invoked by the appellant for the purpose of raising the impugned demand against the respondent. Rule 173B of the Rules requires inter alia that every assessee shall file with the proper officer for approval a list in such form as the Collector may direct showing the "full description" of the goods manufactured. The form in which the application is required to be submitted has been prescribed as the C.L.I Form. The Form requires "a full description of each item of the goods produced, manufactured with warehouse together with the description as would appear from the invoice". Admittedly, the description of the goods given in the C.L.I. Form by the appellant for the period in question did not tally with the description in the invoices for the same perio....