1. In these appeals the short point for our consideration is whether mobile crane mounted on automobile chassis is to be classified under heading 8705 as special purpose vehicle.
2. The order in appeal impugned has upheld the original authority's classification under chapter 87 i.e., on the following grounds :
(a) that perusal of the catalogue shows that lifting/handling mechanism was not completely integrated with the chassis and therefore, the said item was not excluded from the scope of sub-heading 87.05 by virtue of HSN Explanatory notes at page 1430.
(b) that in this self-propelled machine, one or more of the propeller or control elements are not located in the cab of the crane as per the HSN Explanatory notes.
2. Heard the learned Counsel for the appellants who submits that there is high degree of integration between the lifting system and chassis for the following reasons:
(a) The chassis is of unusually long length as well as width against the maximum permitted under the Motor Vehicles Act of this country.
(b) The chassis was not capable of providing the support required by the boom of the Crane for lifting heavy load particularly when the boom was fully extended despite its unusually large dimension. Therefore, the catalogue clearly mentioned it as mandatory that before lifting operation could be carried out, the chassis would have to be parked on a level area and the four supporting legs, called straddles would have to be extended and firmly established on the ground. This putting into position of the straddles was only possible through the engine power of the motor vehicle itself and controls thereof were in the driver's cabin (not crane cabin), which put the straddles into position thereby further increasing the width and height of the usable boom. Therefore, the first operation carried out with respect to the use of the crane is when operating the control panel and power provided by the chassis itself from the driver's cabin.
(c) The front end of the chassis just behind the motor driver's cabin was provided with specially designed receptacle wherein the boom would rest when not in use or when the entire unit was being moved from one location to another.
3. In view of these two basic features in the chassis it could not be said that this was a case where the ordinary lifting device was mounted on to a lorry chassis. On the other hand, for moving the crane from one location to another as well as for commencing the lifting operation, the chassis had specially designed features of operating from the chassis cab without which either activity was not possible.
4. The learned Counsel further submitted that the catalogue also showed that the vehicle was not allowed to move even an inch with the boom loaded with the object to be lifted. He further submitted that the capacity of the crane was capable of lifting loads upto 140 M.T. Therefore, explanatory clause of HSN at page 1194 under Chapter 84.26 was fully satisfied and which reads as follows :
The cranes of this heading do not generally move under load or, if they do, the movement is limited and subsidiary to their main function of lifting.
The learned Counsel submits that in this case the primary function of the entire unit is to lift as heavy as 140 M.T. and that while these operations are being undertaken the crane was not allowed to move at all otherwise there was risk of accident.
5. In this connection he submits that following decisions of the Tribunal were in favour of the appellants:
(a) TTG Industries Ltd. v. CC as reported in 1997 (95) ELT 489 (Tribunal) wherein the capacity of the crane being concerned had also been considered.
(b) Randip Shipping & Transport Co. Pvt. Ltd. v. CC as wherein mobile crane mounted chassis fitted with wheels for handling containers etc. was classified under heading 84.22 and not under heading 87.07 despite the capacity of the unit being limited only 20 M.T.
The learned Counsel therefore, submits that there is no doubt on the classification of this item under heading 84.26.
6. The learned DR is at great pains to submit that the item has been correctly classified in the order in appeal impugned under Chapter 87 for the following reasons:
(a) As is held in the order in appeal impugned the importers have not been able to show that there is total integration of the chassis and the lifting machine mounted thereon.
(b) That since this is a self propelled machine which did not include one or more of the propelling or control elements in the cab lifting machine, therefore; it did not fall under heading 84.26 as per the HSN explanatory note at page 1194.
(c) In view of the Apex Court judgment in the case of Wood Craft Industries as wherein it has been held that this explanatory notes had to be mandatorily considered while deciding such classification issue.
(d) Further in case of a conflicting decision between classificability of any product under the Customs Tariff Act, the chapter heading would prevail in terms of the interpretative Rule 3(c). He also distinguished the two decisions cited by the learned Counsel on facts. They have also not relied on the HSN in its totality.
7. We have carefully considered the submissions and records of the case. We have also carefully perused the entire catalogue as well as the model of the item shown to us by the learned Counsel in the Court. On a perusal thereof, we establish the following facts:
(a) The lifting machine comprises of the collapsible boom mounted on a system which makes its operation in circular on both the sides i.e., which makes it swivel in all the directions. The maximum boom level is 45 metres. This lifting action in the machine is powered by special prime mover whose operation is controlled separately from the cabin which is mounted on the rear portion of the motor vehicle chassis.
(b) Motor vehicle chassis itself is driven by front mounted engine and has axles which are fitted with pneumatic rubber tyre wheels of special dimension. The overall length and width of the said chassis is in excess of the maximum prescribed in the Motor Vehicle Act.
(c) The operation manual clearly show that the boom is to rest on specially constructed and designed platform on the aft chassis when the unit is shifted from one location to another.
(d) First, with regard to the operation when the said machine is to be deployed for lifting heavy loads, which could be of a maximum of 140 M.T. it is mandatory to transfer the weight and the centre of gravity of the forces on to four legs or straddles. However, for this there are extendable straddles, which can only be extended into position by using the power from the motor vehicle engine and not from the lifting machine engine. Control to engage these straddles is also provided in the motor driver's cabin. The four straddles are to be extended out and firmly supported on the ground before any load can be lifted. As a result, this unit cannot move even an inch when it is under load. In fact the operation manual warns that even if there is minute instability or movement, it can cause accident.
(e) The rest of the lifting machine is powered and controlled independent of the chassis. These facts are not disputed.
8. Applying these facts to the Customs Tariff Act, we find as follows:
(i) There is substantial integration between design of the chassis and the requirement of lifting machine inasmuch as that the chassis has been designed to securely accommodate the facility of boom to the crane when the chassis is in motion and to provide the controls to place into position the straddles before lifting operation could commence. In view of this, we cannot regard this item as merely one in the nature of motor vehicle chassis on which ordinary lifting machine has been mounted and that the chassis would not be of any other usage vis-a-vis this lifting machine except to make it mobile. In this case, the chassis securely holds heavy boom while in motion as also provides power and the control for making the lift machine suitably entrenched on the earth with the help of extended be straddles, for the purpose of safe lifting of heavy loads.
(ii) We further find that the item clearly cannot move with heavy load and therefore, it satisfies the important criteria contained in the HSN explanatory notes at page 1293 that the Crane does not generally move underload as already noted above and therefore, satisfies its classification under heading 84.26.
(iii) We also take note that this item does not fall in the genere of the examples of the special purpose motor vehicle of heading 87.05, e.g. break down lorries, fire fighting vehicles, lorries with dollies for cinematographic or TV work, sweepers, sprinklers etc. On the other hand we feel that the item concerned is specially designed to facilitate lifting of very heavy loads to the extent of 140 M.T.
(iv) In this connection we find that the Tribunal in the case of TTG Industries (supra) held that crane having capacity of 90 M.T. and being specially designed for handling heavy loads was not ordinary crane and therefore was classifiable, e.g. under heading 84.26. The Tribunal had applied the ratio of the earlier decision of the Bombay High Court in the case of Randip Shipping & Transport Co. Ltd. (supra) wherein it was held that the heading relating to special purpose motor vehicles, which was then under 87.07, does not refer to cranes at all but deals with work trucks mechanically propelled. We find that on this count the ratio of this decision would apply to this case inasmuch as that the item is for lifting heavy loads upto 140 M.T. as it is very different from work truck, but instead it is a crane.
9. In view of the aforesaid analysis, we are of the considered opinion that the said item would be classifiable under sub-heading 8426.12 as crane and not under heading 87.05 as special purpose vehicle in under the Customs Tariff Act 1975. The orders impugned are therefore set aside and the appeal allowed with consequential relief as per law.