2018 (12) TMI 852 - AT - Central Excise

Classification of goods - rice bucket elevator - rice conveyor - whether classified under heading No. 8437 as machinery used in Milling Industry where the tariff rate is nil or are classified under heading No. 8428 as other lifting handling loading or unloading machinery (for example Lifts escalators conveyors Teleferice)? Held that - An identical issue came up before this Tribunal in the case of Alpsco Graintech Pvt Ltd & Ors vs. CCE & ST-Chandigarh 2018 (12) TMI 478 - CESTAT CHANDIGARH where it was held that the entire machinery is classifiable under heading 8437 which is for machinery used in milling industry and it is not disputed that these elevators and conveyors being manufactured by the appellants were not used for milling industry. The conveyors and elevators specifically manufactured as the part of rice milling machinery alongwith other machinery of rice by the appellants merit classification under chapter heading No. 8437 of CETA 1985. The demand of duty against the appellant alongwith interest is not sustainable - penalty also set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Chapter Heading No. 8428 or 8437 of the Central Excise Tariff Act, 1985.

Analysis:
1. The appellant contested the impugned order that classified items under Chapter Heading No. 8428, while they believed the correct classification was under Heading No. 8437 for machinery used in the Milling Industry.

2. The Tribunal referred to a previous case where a similar issue was examined, concluding that the items in question should be classified under Chapter Heading No. 8437, as per the Central Excise Tariff Act, 1985.

3. The Tribunal analyzed the definitions and provisions of Chapter Heading No. 8428 and 8437, along with the HSN Explanatory notes, to determine the correct classification of the conveyors and elevators specifically designed for rice milling.

4. The Tribunal noted that the conveyors and elevators were designed for use in rice mills, forming a combination of machines that ultimately perform the function of rice milling, thus falling under the main heading 8437.

5. Relying on Section notes and legal precedents, the Tribunal concluded that the conveyors and elevators used in rice milling industry should be classified under Chapter Heading No. 8437, as they were specifically made for that industry.

6. The Tribunal distinguished the present case from a previous case where the items were not specifically designed for rice milling, emphasizing the specific use and classification criteria under the Central Excise Tariff Act.

7. Considering technical opinions and customs data, the Tribunal found that the conveyors and elevators used for rice milling were correctly classified under Chapter Heading No. 8437, leading to the setting aside of the impugned order and allowing the appeal with no penalty imposed on the appellant.