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TMI Blog2023 (10) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... fully functional vehicle as such. The Loader mounted by the Respondent is in nature of an additional fitment which, when fitted onto the front portion of the Tractor, enables it to carry out an additional function. Tractor Loaders mounted on the Tractors could easily be dismantled and re-installed. This attachment is not of permanent nature. The customer brings his tractor to the respondent's factory so that its design and measurements may be taken into account for fabricating the loader. The assessee's claim is that the product manufactured by them is Loader which is accessory of the tractor and is classifiable under Chapter heading 8708 and eligible for SSI exemption under Notification No. 8/2003-CE dated 01.03.2003. 2. The case of the Department is that the Respondent had manufactured Tractor Loader i.e. Special Purpose Motor Vehicle falling under Central Excise Tariff Sub Heading 8705 90 00, which is not eligible for SSI exemption as envisaged under Notification No.8/2003-CE dated 01.03.2003 as amended. It was further alleged that the respondent are liable to pay Central Excise duty on Loaders manufactured by them including the price of the tractors in terms of Rule 6 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tractor which is already manufactured by the Tractor Manufacturing Company. The tractor is supplied by the customer and on the readily manufactured tractor the loader is fitted and such loader is manufactured independently by the assessee. In this entire process and the nature of the tractor which is received on which loader is fitted, the conclusion is drawn that the appellant's activity of manufacturing loader independently occurs by taking various alteration and since it is to be fitted in the tractor therefore, the assessee's activity is under manufacture of the whole vehicle but limited to manufacture of loader. Merely by fitting such loader which is manufactured and mounted on the tractor, cannot be said to be amounting to manufacture of 'special purpose motor vehicle' classifiable under heading 8705. In case of manufacture of special purpose motor vehicle, the fabrication and mounting of special purpose body of motor vehicle is fabricated and mounted on the chassis. In the present case, tractor is already manufactured and in majority of cases the clients use his tractor for some time and thereafter it is given to the assessee only for fitting loader in the fully manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter Note 2 in HSN Explanatory Note to Chapter 87 reads as "2. For the purposes of this Chapter, "tractor" means vehicles constructed essentially for hauling or pushing another vehicle appliance or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilisers or other goods." General - Explanatory note below the chapter note reads as "This Chapter covers the following vehicles, with the exception of certain mobile machines of Section XVI (See Explanatory Notes to headings 87.01, 87.05 and 87.16) Explanatory Note under the heading TRACTORS FITTED WITH OTHER MACHINERY reads as "Tractors and industrial working tools are also classified separately when the tractor is designed essentially for hauling or pushing another vehicle or load, and includes, in the same way as an agricultural tractor, simple devices for operating (raising, lowering, etc.) the working tools. In such a case, the interchangeable working tools are classified in their appropriate headings, even if presented with the tractor, and whether or not mounted on it, while the tractor with its operating equipment is classified in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter Heading No. 87.05 of Central Excise Tariff. The Special Purpose Vehicle of 87.05 is not eligible for exemption benefit in terms of Notification No. 8/2003 ibid. The exemption in terms of Notification No. 06/2006 and 12/2012 is also not available to these Special Purpose Vehicles as the same were manufactured from exempted tractor and material which is not supported by duty paying documents. Therefore, central excise duty is required to be paid on the value of special purpose vehicle as one unit, on the total value of tractor and loader. 3.4.1 The Noticee claimed that the attachment of tractor viz. loader being manufactured by them is an interchangeable equipment of tractor. The Noticee demonstrated by video of four different makes of tractor attachment loader that the attachment can be easily mounted and dismantled and after dismantling the tractor can be used as tractor. They drew attention towards a major manufacturer of tractor attachment namely M/s Bull Machines, Pvt. Limited. Coimbatore, who also manufactures loader and mounts the same on buyers tractor. They supply these loaders as tractor attachment. Claiming the leader as interchangeable equipment, the Noticee argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractor as such is very limited unless any accessory or machine or tool or equipment or trailer is attached to it. The tractor is a power vehicle which assists the machine, tool, equipment or another vehicle for their application. There are a number of interchangeable attachments which work with a tractor, such as loader, excavator, agriculture implements, rotavators etc. A tractor is an engineering vehicle specifically designed to deliver a high tractive effort (or torque) at slow speeds, for the purposes of hauling a trailer or machinery used in agriculture or construction or industry. The term is used to describe a farm vehicle that provides the power and traction to mechanize tasks. Agricultural implements may be towed behind or mounted on the tractor, and the tractor may also provide a source of power if the implement is mechanised. The tractors are designed in such a way so as to mount various attachments and use the power of tractor for it's application(s) either from front, rear or side. As such the loader manufactured by the Noticee is an interchangeable tractor attachment for implementing loading tasks in farm, construction or industry. The Noticee also provided phot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated and mounted by the Notice m merely in the nature of an additional accessory which, when fitted onto the front portion of the tractor, enables it to carry out an additional loathing function. Therefore, the tractor and loader cannot be classified as 'one unit' special purpose vehicle under Chapter Heading No. 87.05 of Central Excise Tariff. 3.4.6 It is also alleged in SCN to support classification under Chapter Heading 87.05 of Central Excise Tariff that after the loader fabricated and mounted on tractor fresh RTO registration is required. The Noticee, in this regard, submitted that no fresh registration is made by RTO after mounting of louder. Such tractors are already registered by RTO and after attachment of loader the customer has to submit Registration Book of tractor to the RTO just for endorsement about fitment of loader. In terms of provisions of Section 52 of the Motor Vehicles Act, 1988, it is required to intimate RTO if any change is hurtle in the vehicle after registration of vehicle e.g. if petrol motor car converted into CNG or LPG fuel car. The tractor prior to fitment of loader is non-transport category vehicle and even after fitment it remains as no ..... 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