Customs, Excise and Gold Tribunal - Delhi
Hindustan Motors Ltd. vs Collector Of Central Excise on 26 May, 1995
Equivalent citations: 1995(78)ELT500(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. M/s. Hindustan Motors Ltd. have filed the captioned appeal being aggrieved by the order of Collector (Appeals). The Collector (Appeals) in his order had held in para 3 of the order as under:
"3. I have gone through the submissions made in the appeal in conjunction with the impugned order. When appellants filed the classification list seeking classification of the subject product as a dumper falling under T.I. 34-I(3) with the attendant lower rate of duty as per Notification No. 68/83-C.E., dated 1-3-1983 (as amended) it was not correct to say on their part that the dispute to be resolved was whether the said product attracts the mischief of T.I. No. 34-I(3) or T.I. 68. I do not find any justification to interfere with the reasoning of the lower authority, declining to the classify the subject product as a dumper. However, it is conceded by the lower authority that the same would be covered by T.I. 34-I(3). In this context, as pointed out in ground No. 1 of the present appeal the subject product will be eligible for the rate of duty prescribed against Item No. 14 in the table annexed to the Notification No. 68/83-C.E., dated 1-3-1983 (as amended) issued under Rule 8(1) of the Central Excise Rules, 1944. Accordingly, I modify the impugned order and dispose of the present appeal".
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of motor vehicles under Tariff Item 34. They filed a classification list for classification of R-35B1 off the Highway Rear Dumper with water sprinkler under Tariff Item 34-1(3), claiming the benefit of Notification No. 68/83-C.E., dated 1-3-1983, further claiming that their product fell under Sl. No. 16 of the table annexed to the notification. On examination of the classification list, the department was of the view that the appellants, product fell under Sl. No. 14 of the table annexed to the Notification 68/83, dated 1-3-1983 as against the claim of the assessee for assessing it to duty under Sl. No. 16 of the table of the said notification. The appellants submitted that the dumpers are designed for the purpose of carrying unfinished material from one place to other and discharging the material. When a dumper was used for the purpose of mining applications, it carries rocks, boulders, earth etc. that the equipment under dispute is meant for dumping water. It was further submitted by the appellants that a container for carrying rocks, boulders etc. has to be designed to permit the loading and unloading is an expeditious and efficient manner. Accordingly, the appellants contended that the container (commonly known as body) is designed in such a fashion as to permit top loading and discharging through the rear/bottom. It was argued that the equipment manufactured by them is specifically designed to operate in the mining area for dumping water and therefore, instead of having a open type body it has got an enclosed body and the dumping action is achieved through operation of orifices controlled by water valves; that the water dumper designed and manufactured by the appellants cannot be used on highways because the equipment is not designed with suspension which would enable to move at high speed; that the equipment is fitted with very large tyres and if such equipments were to run on prepared roads such as of concrete, mecadam or bitumen roads, the tyre will overheat and burst. It was pleaded that the use of the equipment manufactured by the appellants was for the purpose of carrying water in the mines and discharging the water in the area permitting other dumpers to operate with minimum heat built-up on the tyres and to check the dust coming up. It was also argued by the appellants before the lower authorities that the equipment instead of dumping rocks, earth, iron ore, boulders etc. dumps water in the same way as dumper used for discharging other materials and as such it should be classified as dumper under Item 16 of the table annexed to the notification.
3. As against this, the department was of the view that the definition of dumper given in the Chamber Dictionary of Science and Technology says "it is a wagon used in the construction of earth works, for conveying excavated materials on site and dumping it where required". It was submitted by the appellants that dumper is a vehicle used for transporting goods and dumping goods strictly in one place which is done by tilting the dumper body by using the hydraulic lifting unit, that in the case of sprinkler tank, water is not dumped suddenly as it would cause flooding of the site. Water is sprinkled in a gradual manner in the mines region to prevent raising dust. It was held by the Assistant Collector that since such a vehicle does not function as a dumper, this will only be classified under 34-I(3) and will not attract the benefit of Notification No. 68/83, dated 1-3-1983 which gives concessional rate of duty of 10% BED and 5% special excise duty (SED). The Collector (Appeals) however on careful examination of the issues agitated before him agreed with the findings of the Asstt. Collector in so far as classification of the equipment under Tariff Item 34-I(3) was concerned, came to the conclusion that dispute between the department and the appellants was restricted only to the issue whether the appellants equipment should fall against Item No. 14 or Item No. 16 of the table annexed to Notification 68/83-C.E., dated 1-3-1983 for purpose of effective rate of duty.
4. Shri V. Prahbakar, Sr. Excise Officer of the appellants reiterated the arguments adduced before the lower authorities and submitted that the appellants still hold that the twin dispute of classification and rate of duty continues. The appellants still claim that their product is a Dumper for classification and if it is classified under Item 34-I(3) then it should attract duty against Sl. No. 16 of the table annexed to the Notification No. 68/83, dated 1-3-1983; that as per the conditions laid down under Sl. No. 15 of Notification No. 68/83-C.E., dated 1-3-1983 the net weight of the equipment should be more than 8 tonnes and designed for maximum pay load of 10 tonnes and used off the highway, that R-35B1 off the Highway Dumper with water sprinkler tank has a net weight of 18.30 tonnes and designed for a payload of 36 tonnes and used off the highway. In this view of the matter, the ld. Representative of the appellants submitted that the product manufactured by them clearly qualified to be placed against Sl. No. 15 of the table annexed to Notification 68/83-C.E. and prayed accordingly.
5. Shri Somesh Arora, the learned DR appearing for the respondents submitted that the dispute about classification of the product of the appellants under the then T.I. 34-I(3) has finally been settled by the lower authorities and that the only dispute in the present case is whether the product manufactured by the appellants shall fall against Sl. No. 14 as held by the departmental authorities or Sl. Nos. 15/16 as claimed by the appellants for purpose of levy of duty. The ld. DR submitted that looking to the use of the product namely, the equipment is for the purpose of carrying water in the mines and discharging it on the area permitting other dumpers to operate with minimum heat built up. The product was specifically designed by replacing the dumper body by a tank fitted with sprinklers. The product manufactured by the appellants, it was argued by the ld. DR does not qualify for classification as dumper and for duty against Sl. No. 15 or 16 of the table annexed to Notification No. 68/83, dated 1-3-1983 as claimed by the appellants. Reiterating the findings of the lower authorities, the ld. DR submitted that the lower authorities had correctly held that the product manufactured by the appellants was not a dumper and fell against Sl. No. 14 of the table annexed to Notification No. 68/83-C.E. for effective rate of duty.
6. Heard the submissions of both sides and considered them. We find that the dispute is in a short compass revolves round classification of the equipment under T.I. 34-I(3) or T.I. 68 and effective rate of duty between three entries namely Entry Nos. 14, 15 and 16 of the table annexed to Notification 68/83-C.E., dated 1-3-1983.
7. For the purpose of classification whether under T.I. 34-I(3) or T.I. 68, we have to examine as to how the product is designed. In the statement of facts incorporated in the appeal memo., the appellants have stated about design of the equipment as under :
"This equipment is specifically designed to operate in the mining areas for dumping water and therefore instead of having an open type body, it has got an enclosed body and the dumping action is achieved through operation of orifices controlled by water valves. This equipment is fitted with very large tyres and these tyres by virtue of construction do not flex under load in the same manner as conventional tyre on unprepared surfaces and cause the surface to yield under their weight. If this equipment is to run on prepared road such as the concrete, mecadem or bitumen roads, the tyre will overheat and burst. The suspension of this equipment is not designed for high speed and it is purely designed for use off the highway."
Now looking at the dictionary meaning of the word 'Dumper' in the Chamber Dictionary of Science and Technology, we observe that dumper has been defined as "it is a wagon used in the construction of earth works for conveying excavated materials on site and dumping it where required". On examining the design, the equipment manufactured by the appellants in the context of the definition given in the Science and Technology Dictionary, we observe that the equipment manufactured by the appellants is neither used for conveying excavated materials on site and dumping it where required. In view of these facts, we hold that the equipment in dispute is not a dumper and hence its classification under T.I. 34-I(3) is correct. We agree with the findings of the lower authorities.
8. Having come to the conclusion that the equipment is not a dumper, it shall fall under Sl. No. 14 or 16 of the table annexed to Notification No. 68/83-C.E. For proper appreciation of the entries, the entries relevant for the present case are reproduced below :
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Sl. No. Sub-item Description of Rate Condition
No. motor vehicles
and tractors
------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
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14 I(3) Motor vehicles Fifteen per cent -
other than ad valorem
saloon cars
15 I(3) Dumpers con- Ten per cent ad
forming to the valorem
following speci-
fications :-
(a) the net
weight (exclud-
ing payload) of
the dumper is
more than 8 ton-
nes;
(b) the dumper
is designed for a
maximum pay-
load of 10 tonnes
or more; and
(c) the dumper
is designed for
use off the high-
way.
16 I(3) Three axled Ten per cent ad
motor vehicles valorem
other than arti-
culated vehicles
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For the finding whether the product manufactured by the appellants qualifies for assessment against Sl. No. 14 or 16. We find that the product manufactured by the appellants is an articulated vehicle inasmuch as the dumping body has been replaced and fitted with a water tank which is fitted with sprinklers. Serial No. 16 of the table specifically provides that the motor vehicles, tractors having three axles other than articulated vehicles shall be classified under Sl. No. 16.
9. Shorter Oxford English Dictionary illustrates that the word 'articulate' "united by a joint, composed of joined segment of the type of articulate, distinctly joined or marked etc." The word articulate according to the same dictionary means "having the body and limbs composed of segment joined together". The word 'jointed' means "furnished with, constructed with or having joints etc." Examining the product in this view of the general meaning, we hold that the classification of the equipment under Sl. No. 16 of the table annexed to Notification No. 68/83-C.E. is ruled out.
10. No evidence has been brought on record that the equipment is a three axled motor vehicle other than articulated vehicles. No evidence has been brought on record to substantiate to show that the product manufactured by the appellants was eligible for classification under Sl. No. 16. In the absence of such evidence and having regard to the fact that the equipment was a specially designed one and can be termed as an articulated vehicle, therefore it is excluded from concessional rate of duty under Sl. No. 16 of the Notification 68/83-C.E., dated 1-3-1983. The only serial No. against which the equipment manufactured by the appellants becomes eligible for concessional rate of duty will be serial No. 14 of the table annexed to the Notification No. 68/83-C.E., dated 1-3-1983.
11. Having regard to the above findings, the impugned order is upheld and the appeal is rejected.