TMI Blog2023 (9) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is already held that the Chick drinker, Auto feeder, and Poultry cage are rightly classifiable under CETH 84361000, these miscellaneous products cleared along with and corresponding to the finished products are also to be classified under CETH 84361000. The appellant is eligible for the benefit of nil rate of duty. The Tribunal in the case of SHIVA POULTRY EQUIPMENTS VERSUS C.C.E.S.T., CHANDIGARH-II [ 2016 (9) TMI 572 - CESTAT CHANDIGARH] has discussed, the Board circular, the decision in the case of AZRA POULTRY EQUIPMENTS VERSUS UOI AND ORS. [ 2012 (3) TMI 326 - DELHI HIGH COURT] as well as the decision of the Tribunal in the case of WELD FUSE (P) LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD [ 2007 (12) TMI 339 - CESTAT, BANGALORE] . The Tribunal held that the welded wire mesh supplied to poultry farms merit classification under 84.36 as poultry keeping machinery. Thus, the impugned goods merit classification under CETH 84361000, as adopted by the appellant. Whether the demand of duty, interest and penalties are sustainable? - HELD THAT:- The duty demand, interest and penalty therefore cannot sustain and requires to be set aside. The impugned order is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d confirmed the duty along with interest and imposed penalties. Aggrieved by such order of the original authority, the appellant is in Appeal E/40389/2018. On similar set of facts, proceedings were initiated against the appellant which culminated in Order--in--Original dated 30.08.2018. On appeal, Commissioner (Appeals) vide OIA dt. 23.03.2020 upheld the order of original authority. Aggrieved by the order of appellate authority, the Appellant is in Appeal E/40495/2020. 3. The Ld. Counsel Shri Vishal Agarwal appeared and argued for the appellant. The facts and provisions of law were explained as under : 3.1 The chick drinker consists of top cone, plastic stand, bottom plate and handle. It also contains of a stand to maintain the height. The system works by using gravity (air lock mechanism) to push water into the tray. When the hens drink water from the tray, it results in the reduction of the water level, this causes the air to escape into reservoir above the drinking tray. Once the air goes into the water reservoir, water is released into the tray filling it back to set level. Once equilibrium between the water and vacuum pressure in the reservoir is achieved, no more water ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the department when water or feed is manually filled in the cone, all that happens is it trickles down due to gravitational force and is too simple to be called a machine that there is no systematic arrangement of several parts which move and function in the designed manner to perform any work on the supply of force to it. It does not multiply or convert the force supplied to it for any such purpose. Hence, they cannot be considered as machinery. According to the department, the Poultry Cage is a box with doors and is used for shifting or transport of the baby chicks / poultry from one place to another i.e. transportation of poultry. This does not have any mechanical function and it is a mere crate for storage and shifting of poultry, which is secondary function to the main function of poultry farming and consequently cannot be classified under CETH 8436. 4. The relevant tariff headings and HSN explanatory notes were adverted by the Ld. Counsel to argue that the impugned goods would fall under CETH 8436. 4.1 The Chapter Heading 8436 is as under : 8436 OTHER AGRICULTURAL HORTICULTURAL, FORESTRY, POULTRY--KEEPIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39231090 ------ Other 12.5% -- Sacks and bag (including cones) 39232100 ---- Of polymers of ethylene 18% 392329 ---- Of other plastics : 39232910 ------ Of poly (vinyl chloride) 18% 39232990 --- --- Other 18% 392330 --Carboys, bottles, flasks and similar articles: 39233010 ------ Insulated ware 12.5% 39233090 ------ Other 12.5% 39234000 -- Spools, cops, bobbins and similar supports 12.5% 392350 -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incubators, known as combi--incubators, incorporate hatcher functions. (B) Hatchers. In these machines, which incorporate devices for controlled heating and air circulation, the eggs are placed in baskets or special trays for hatching. (C) Brooders, large appliances with heating and cooling devices used for rearing young chicks. (D) Rearing and laying units or batteries , large installations equipped with automatic devices for filling the feeding troughs, cleaning the floors and collecting the eggs. (E) Egg candlers (or testers) with mechanical features (including photo--electric testers) other than stating testing lamps. (F) Sexing and vaccination equipment, enabling hatcheries to separate chicks of different sex and to vaccinate them. These machines are not designed to be used by veterinary surgeons. The heading does not include machines, known a chick counting and boxing systems for automatically counting and placing chicks in boxes (heading 84.22); the handling of the chicks is the primary function, the counting being merely a secondary function permitting to place in a box a fixed number of chicks predetermined in accordance with the size of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther mechanical nor electrical (such as boiler, boiler house plant, filtering apparatus) and parts of such apparatus and plants . This position is also clear from the HSN Explanatory Notes to Chapter 84, whereunder the explanation General Content of the Chapter it has been clarified that Chapter 84 covers machinery, mechanical apparatus as also non--mechanical apparatus (e.g. filtering apparatus. 9. It is thus submitted that Chapter 84 covers machine, machinery, plant, equipment, apparatus or appliances and such machines covered under Section XVI (i.e. Chapter 84 and 85) need not only be mechanical or electrical machinery but can also be apparatus and plant, which is neither mechanical nor electrical. 10. It is submitted that the Explanatory Notes to CETH 8436 covers machinery, equipment, apparatus used on farm, in forestry, market gardens, or poultry--keeping or bee--keeping farms or the like amongst the various equipments covered therein, automatic watering--troughs for cattle, horse, pigs etc. is one of the other agriculture, horticulture or forestry machinery which is covered under CETH 8436.The chick drinker and the auto feeder for poultry are clearly akin to the automat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains, bolts, screws and springs, or iron or steel heading 73.12, 73.15, 73.18 or 73.20) and similar articles of other base metals (Chapters 74 o 76 and 78 to 81), locks of heading 83.01, fittings and mountings for doors, windows, etc., of heading 83.02. Similar goods for plastics are also excluded from this Section and fall in Chapter 39. .... ... (B) In general, the goods of this Section may be of any material. In the great majority of cases they are of base metal, but the Section also covers certain machinery of other materials (e.g., pumps wholly of plastics) and parts of plastics, of wood, precious metals, etc.) 15. The Ld. Counsel pointed out that as per General Content per (A) above, the chapter 84 covers apparatus and appliances and parts thereof, together with certain apparatus and plant which is neither mechanical or electrical (such as boilers and boiler house plant, filtering apparatus etc.) and parts of such apparatus and plant. 16. Further, as per General Content (B) above, the Chapter 84 covers machinery other materials (eg. Pumps wholly of plastics) and parts of plastics, of wood, precious metal etc. Thus machines need not be always of metal it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate of duty. This being so, there is no positive act of suppression made out against the appellant. That there are no grounds to invoke extended period and the demand may be set aside on limitation. 21. The Ld. Counsel prayed that the appeals may be allowed. 22. The Ld. A.R Ms. Sridevi Taritla appeared for the department. The findings in the impugned order was reiterated and also relied on the Board circular dated 31.8.1996 and the judgment of the Hon ble High Court of Delhi in the case of Azra Poultry Equipments (supra). The Ld. A.R prayed that the appeals may be dismissed. 23. Heard both sides. 24. The issue involved is (1) whether the Chick drinker and Auto feeder manufactured by the appellant are classifiable under CETH 84361000 of Central Excise Tariff Act, 1985 as claimed by the appellant or whether to be classified under CETH 39269099 as held by the department ? (2) whether the poultry cage manufactured by the appellant is classifiable under CETH 84361000 as claimed by the appellant or whether to be classified under CETH 39231090 as held by the department ? (3) whether the demand of duty, interest and penalties are sustainable. 25. The Ld. Counsel ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 5 of Section XVI) gives the meaning of machine . When the Tariff itself gives the meaning of the word machine , the Commissioner ought not to have relied on extraneous aids. In para B of this Section Note XVI--(General) it is mentioned that goods even if made of plastics would fall into the meaning of machines. 28.2 In the said HSN Explanatory Notes to Chapter 84, the heading 8436 is industry specific. In other words, the heading covers, other agricultural, horticultural, forestry poultry keeping or bee--keeping machinery, including germination plant fitted with mechanical or thermal equipments; poultry incubators and brooders . The heading 8436.10 is for poultry--keeping machinery. 8436 takes in the parts of such machinery also. [The chapter headings and HSN Explanatory Notes have already been noticed]. 28.3 We therefore have to hold that the impugned goods are indeed poultry keeping machinery and merits classification under 84361000. The adjudicating authority has held that the miscellaneous products namely, Hose--PVC, Flexible Blue, Tee joint Nipple etc. cleared along with the above goods are also to be classified under CETH 39269099 / 39231090. As we have already hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, viz. 2009-13. We have seen the Entry No. 8436 as it existed prior to 2005 and post-2005. The entry in the new tariff includes the parts of poultry keeping machinery which was not included in this heading prior to 2005. The Hon ble Delhi High Court dismissed the writ petition pertaining to the earlier Entry No. 8436 (relating to only Poultry Keeping Machinery) and held that wire mesh cannot be treated as poultry keeping machinery. We further note that in the 8 digit classification, since the subsequent Entry No. 8436 specifically included the parts of the poultry keeping machinery, the Hon ble Delhi High Court s decision may not be applicable to the new tariff entry including parts. We also note that this decision of Delhi High Court was challenged before the Hon ble Supreme Court by way of filing SLP and the Apex Court vide its order dated 23-7-2012 [Azra Poultry Equipments v. Union of India - 2015 (323) E.L.T. A21 (S.C.)] allowed the SLP to be withdrawn, so as to pursue the matter with the Commissioner (Appeals) and directed that the Commissioner (Appeals) will consider the case on its merit uninfluenced by any observation by the Delhi High Court. We also find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the Delhi High Court in the impugned judgment. It is ascertained that the Commissioner (Appeal-II), Bangalore had rejected the assessee s appeal on the grounds of limitation without considering or passing order on merits of the case. The net effect of these developments is that there is no contrary decision of higher forum regarding classification, of the subject items and the Delhi High Court s order is held to be not binding on the lower appellate authority by the Hon ble Supreme Court while disposing of the SLP filed by the assessee. 17. On the legal position, it is seen that Tariff Heading 8436 91 00 is not dealing with machinery or equipments per se but with parts of poultry keeping machinery or poultry incubators and broodes. Reading together Note-I of Section XV, Note-2 of Section XVI and the scope of the entry in the above Tariff heading, it is apparent that there is no changed circumstances to warrant the change of classification as already upheld by the Hon ble Tribunal in the assessee s own case and followed by this office vide the above-mentioned order-in-original for all the subsequent periods. It is pertinent to note that CTH 8436 91 00 dealing with parts ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
