- (1.) A question was raised before the Tribunal whether water-well drilling rigs mounted on motor vehicle chassis fall under Tariff Heading 84.30 of the Central Excise Tariff Act, as claimed by the respondent assessee, or under Tariff Heading 87. 05 as upheld by the adjudicating authority. The Tribunal upheld the respondent's contention and set aside the order of the adjudicating authority. However, the Tribunal confirmed the claim of the appellant limited to a particular removal in respect of which separate invoices had been submitted by the respondent. The decision of the Tribunal on the main issue has been impugned before us by the Revenue. The respondent has filed a separate appeal being CA No. 178 of 1997 in respect of the latter finding limited to the demand in respect of the particular quantity.
(2.) The period in respect of which the demand has been raised is 1/3/1986 to 29/2/1988. 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 1/3/1988, 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 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 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 compressor used in such drilling rigs. "
(3.) The respondent assessee then filed classification lists claiming that the goods manufactured by it were classifiable under Tariff Heading 87. 05 and as such they were entitled to the benefit of the exemption notification dated 1/3/1988.;