2002(08)LCX0030

IN THE CEGAT, EASTERN BENCH, KOLKATA

Smt. Archana Wadhwa, Member (J) and Shri V.K. Agrawal, Member (T)

SPEEDCRAFTS LTD.

Versus

COMMISSIONER OF CUSTOMS, MUMBAI

Order No. A-956/KOL/2002, dated 26-8-2002 in Appeal No. C/582/2001

Cases Quoted

Collector v. Business Forms Ltd. — 2002(01)LCX0193 Eq 2002 (142) ELT 0018 (S.C.) — Referred......................... [Para 5]

Collector v. Wood Craft Products Ltd. — 1995(03)LCX0070 Eq 1995 (077) ELT 0023 (S.C.) — Referred....... [Paras 2, 4, 5]

Pahwa Chemicals (P) Ltd. v. Collector — 1999(12)LCX0255 Eq 2000 (124) ELT 0244 (Tribunal) — Referred...... [Para 2]

Advocated By :   Shri Vikas Jain, Advocate, for the Appellant.

Shri A.K. Mondal, JDR, for the Respondent.

[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal, filed by M/s. Speedcrafts Ltd., is whether “Snow Blower Bucher Rolba 1500 STD”, imported by them, is classifiable under sub-heading 8430.20 of the First Schedule to the Customs Tariff Act, as claimed by them or under Heading 87.05 as confirmed by the Commissioner (Appeals), under the impugned order.

2. Shri Vikas Jain, ld. Advocate, mentioned that the appellants had imported the impugned item for sale to the Public Works Department of the Government of Jammu and Kashmir; that the foreign supplier had classified the impugned item under sub-heading 8430.20 which is evident from Bill of Lading; that the Revenue, however, holding the view that the Explanatory Notes of H.S.N. are applicable in construing the relevant Heading has classified the product under Heading 87.05 as a ‘special purpose motor vehicle’ on the ground that Heading 84.30 covers only non-self propelled snow- blowers. The ld. Counsel submitted that sub-heading 8430.20 of the Tariff reads as “Snow-ploughs and snow-blowers”; that in view of the specific coverage of snow-blowers under sub-heading 8430.20, the impugned product cannot be classified under any other Heading of the Customs Tariff; that Rule 3(a) of the Interpretative Rules provides that “The heading which provides the most specific description shall be preferred to headings providing a more general description”; that in view of this Rule, the impugned goods is rightly classifiable under sub-heading 8430.20 being specific sub-heading. The ld. Advocate also submitted that the reliance on the HSN Explanatory Notes is entirely wrong; that the Explanatory Notes are to be referred to only in case of ambiguity about the classification of a product; that in the present matter, the terms of the Tariff are very clear and unambiguous which rules out adverting to the HSN Explanatory Notes; that the ratio of the decision of the Supreme Court in the case of CCEx. v. Wood Craft Products Ltd., 1995(03)LCX0070 Eq 1995 (077) ELT 0023 (S.C.) is not applicable as the said case is distinguishable; that in Wood Craft case, “Block Boards” were admittedly not expressively specified in any entry in the Central Excise Tariff at all and as such it became necessary to resort to other external aids for interpretation of the term “similar laminated wood” to test whether the expression covered Block Boards; that in the present matter “Snow-Blower” finds a specific mention in sub-heading 8430.20 of the Tariff and thus completely obviating the need for any sort of interpretation whatsoever, muchless by resort to external aids to construction; that moreover in Wood Craft case, the Hon’ble Supreme Court was concerned with deciding which of the HSN and ISI Glossary was to be preferred for interpreting the phrase “similar laminated wood”; that thus the observation of the Hon’ble Supreme Court in Wood Craft case must be understood in that backdrop; that Customs Tariff is the Indian codified law giving expression to the clear intent of Parliament which cannot be over-ridden by the HSN which is, an the very highest, a guideline but does not per se have the force of law; that HSN is not intended to apply where an entry in the Tariff is specific and concise without there being any ambiguity or conflict; that this is made obvious from the statement of Objects and Reasons of the Central Excise Tariff Act which took account of the recommendations of the Technical Study Group suggesting adoption of the HSN “with such contractions or modifications thereto as necessary”; that the more detailed definition in the HSN ousting Snow Blowers with built-in-equipment from sub-heading 8430.20 has thus been contracted and modified in the Indian Tariff by omitting this part of the HSN Explanatory Notes; that the sub-heading 8430.20 covers all snow-blowers without any qualification or exception; that absence of restrictive words in 8430.20, therefore, clearly indicates that the term “Snow-Blower” has been used in its widest possible sense without exclusion of any category thereof, and would automatically include self-propelled Snow-Blower. He relied upon the decision in Pahwa Chemicals (P) Ltd. v. CCEx., 2000 (124) ELT 244 wherein the Tribunal has held that in view of the specific provision in Tariff examining HSN Explanatory Notes or placing reliance on them is not necessary.

3. The ld. Advocate, further, mentioned that the Exception No. (b)(2) of the HSN Explanatory Notes for Heading No. 84.30 mentions as under :-

“Machines mounted on automobile chassis or lorries.

Certain machines of this heading (e.g. pile-drivers, oil well drilling machines) are often mounted on what is in fact an essentially complete automobile chassis or lorry in that it comprises at least the following mechanical features : propelling engine, gear box and controls for gear-changing, and steering and braking facilities. Such assemblies are classified in heading 87.05 as special purpose motor vehicles.

On the other hand, this heading includes self-propelled machines in which one or more of the propelling or control elements referred to above are located 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 ld. Counsel contended that this clearly shows that the snow-blower is not a vehicle in the absence of a gear box or controls for gear changing but remains a machine classifiable under Heading 84.30 as it satisfies the test of location of the propelling or control elements in the cab. He finally submitted that Note V of HSN below Heading 84.30 excludes Snow-blower vehicles of Section XVII with built-in-equipment; that it is clear from technical drawings that the impugned snow-blower is not built-in but detachable and inter-changeable; that Explanatory Notes below Heading 87.05 also clearly mentions that “Interchangeable snow-plough or snow-blower equipment of all types is in all cases excluded (Heading 84.30) whether or not presented mounted on a vehicle”.

4. Countering the arguments, Shri A.K. Mondal, ld. DR, reiterated the findings as contained in adjudication order and the impugned order and emphasised that the Apex Court has held in the case of Wood Craft that the HSN shall be the only guide to determine the scope and coverage of Tariff entry provided that the entries in the Tariff and the HSN are identical; that as the sub-heading 8430.20 in Customs Tariff and HSN are identical, the HSN should only be the basis to interpret the scope and coverage of the Tariff entry; that accordingly reliance has been correctly placed on the Explanatory Notes of HSN. He further submitted that Explanatory Notes below Heading 84.30 in HSN excludes snow-blower vehicle with built-in equipment whereas the same are specifically included in Heading 87.05 that snow-blower with built-in equipment has been described in the Explanatory Notes as “Vehicles constructed solely for snow clearance and usually equipped with turbines, rotating blades, etc., driven either by the vehicle engine or by a separate engine; that it is thus clear that only snow blower equipments are covered by Heading 84.30, if presented alone or mounted on a vehicle and not snow blower vehicle with built in equipment. The ld. DR mentioned that the Commissioner (Appeals) has given clear findings that the impugned goods is a vehicle constructed solely for snow clearance and equipped with rotating blades etc. driven by the vehicle engine; that the impugned goods has common engine, common drive, common control and built in snow clearance attachments with rotating blades which gets its drive from the main gear box of vehicle.

5. We have considered the submissions of both the sides. One of the main contention raised by the ld. Advocate for the appellants is that in view of specific mention of snow-blowers in sub-heading 8430.20 of the Customs Tariff without any restriction, any reference to HSN Explanatory Notes is not warranted. He has also attempted to distinguish the decision in the case of Wood Craft. The Hon’ble Apex Court, after referring to the Statement of Objects and Reasons of the Central Excise Tariff Bill, 1985, has held that “the Central Excise Tariffs are based on the HSN and the internationally accepted nomenclature was taken into account to "reduce disputes on account of tariff classification”. Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN….. in the case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act.” In the present appeal before us there is dispute as to whether the impugned goods is “snow-blower under Heading 84.30 or “Special purpose motor vehicle, other than those principally designed for the transport of persons or goods” under Heading 87.05 of the Tariff. Thus the scope and nature of both the Headings is to be ascertained by referring to HSN as both the Headings 84.30 and 87.05 are the same as HSN Headings 84.30 and 87.05. The Hon’ble Apex Court has held in Wood Craft case that “any dispute relating to tariff classification must as far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there is an express different intention indication by the Central Excise Tariff Act, 1985 itself.” There is nothing on record to show that there was any different intention indicated by the Customs Tariff Act as both the Headings in Customs Tariff and HSN are same. The phrase “such contractions or modification” mentioned in Statement of Objects and Reasons of the Central Excise Tariff refers to the fact that the Central Excise Tariff was not completely aligned to HSN and it was broadly based on HSN. This is why the Apex Court also cautioned in the judgment to the effect “unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself.” The Hon’ble Supreme Court recently in the case of Collector of Customs, Bombay v. Business Forms Ltd., 2002(01)LCX0193 Eq 2002 (142) ELT 0018 (S.C.) remanded the matter to the Tribunal for reconsideration “because, principally, the Tribunal has declined to place reliance upon the Explanatory Notes in the HSN stating that, at best, these have only persuasive value.” The Hon’ble Supreme Court, after referring to Wood Craft judgment, observed, “clearly, therefore, the HSN Explanatory Notes are entitled to for greater consideration than the Tribunal has given there.” Accordingly, we do not agree with the ld. Advocate that the Revenue could not have referred to Explanatory Notes of HSN.

6. The rival headings read as under :

“84.30 - Other moving, grading, levelling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals or ores; pile-drivers and pile-extractors; snow-ploughs and snow-blowers —

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8430.20 - Snow ploughs and snow-blowers”

“87.05 - Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, break-down lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological units).”

7. According to HSN Explanatory Notes, snow-ploughs and snow-blower vehicles of Section XVII with built in equipments are excluded from the purview of Heading 84.30. The heading, however, covers snow ploughs designed to be pushed or pulled (blade type), e.g., those designed to be attached to lorries or tractors. Explanatory Notes explain the scope of Heading 87.05 as follows :-

“This heading covers a range of motor vehicles, specially constructed or adapted, equipped with various devices that enable them to perform certain non-transport functions .”

It is further mentioned in the Explanatory Notes that Heading 87.05 includes “Snow-ploughs and snow-blowers, with built-in-equipment; i.e. vehicles constructed solely for snow clearance, and usually equipped with turbines, rotating blades, etc. driven either by the vehicle engine or by a separate engine.” The Explanatory Notes only excludes interchangeable snow-ploughs or snow-blower equipment of all types from the purview of Heading 87.05. The Explanatory Notes further provides that “It should be noted, however, that self-propelled snow-ploughs or snow-blowers with built-in-equipment always fall in this Heading.” The Commissioner (Appeals) has given his specific findings on this aspect as under :-

“I find that the impugned goods are Snow-Blower vehicle with built-in-equipment. The Snow-Blower vehicle has common engine, common drive, common control and built-in-snow clearance attachments with rotating blades which gets its drive from the main gear box of vehicle as would be seen from the drawing (Drive of lay out)....”

8. The appellants have only contended that the snow-blower attachment can be removed from the carrier unit and some other attachment can be fitted. This itself goes to show that what has been imported by them is not only snow-blower but vehicle constructed solely for snow clearance. This is apparent also from the Brochure which mentions that “the strong and robust snow-blower is best suited for snow clearing in mountain regions as well as on airports.” It further mentions that the infinitely variable hydrostatic transmission and blower drive allows the driven an individual adjustment of forward motion and casting distance, matching precisely to the prevailing snow conditions. The optimal weight balance provides very good conditions for snow clearing on snow layers. As per Brochure, the product is equipped with angular gear, snow blower support, drive shaft, cutter shield impeller housing, Impeller and cutter drums. Accordingly, the impugned product is appropriately classifiable under Heading 87.05 of the Customs Tariff. We, therefore, reject the appeal.

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Equivalent 2003 (151) ELT 114 (Tri. - Kolkata)