TMI Blog2016 (11) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... o the industry specific machine, but is relatable to function specific m chines. If the classification is to be adopted, as contested by the assessee, on the basis of industry specific (like in the present case rice industry) then the machines which stand specifically cover d under the said heading 84.19, would get shifted to the other heading dependent upon the industry in which they are to be used, ty us making the said entry as redunt and frivolous. It is well settled principal of law that an interpretation which renders an entry otiose has to be avoided. As such, when viewed from this angle also, we get affirmed in our opinion of the par-boiling machine falling under heading 84.19. Principles of interpretation - in terms of again, the well settled principle of interpretation, an item is required to be assessed, in the form, in which the same is cleared from the manufacturers factory and not on the basis of its future use, after clearance, unless it is the requirement of the entry. As such, we note that the par-boiling machine, when examined and assessed independently satisfies all the specification of heading 84.19, thus making it compulsorily to fall under heading 84.19. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines for cleaning, sorting or grading seed, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables, other than farm-type machinery 4. Before we proceed to decide the correct classification of the goods, we may reproduce the undisputed process of parboiling of rice, placed on record and agreed upon by both the sides. Process of parboiling :- Parboiling of paddy involves the following steps : (i) Pre-steaming - Clean raw paddy, which has moisture content of 13-18%, is steamed for 3 to 5 minutes in small batches or continuously to raise the paddy temperature to 80-850 C . During this process, the air entrapped between the husk and the kernel of the paddy grain, which is a major barrier in subsequent hydration to 30% moisture content, is expelled. Pre-steamed paddy absorbs the water uniformly and quickly particularly at lower soaking temperatures. (ii) Soaking : - Paddy is soaked in water to hydrate the grains sufficiently for uniform gelatinization of starch on subsequent heating. The optimum soaking temperature and time of hydration is selected based upon the hydration curv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The processed paddy is then sent to subsequent sections where husking, hauling, milling and polishing are undertaken. Briefly, parboiling process involves three stages, namely, pre-steaming, soaking and steaming. In the first stage, clean raw paddy is steamed for 3 to 5 minutes. In the second stage, pre-steamed paddy is soaked in water tanks for about 4-5 hours. In the last stage, the soaked paddy is passed through steaming process for 3-5 minutes. Subsequently, steamed rice are dried in a dryer. The dryer is also supplied alongwith parboiling rice machinery. It has been mentioned by the Association that 100% of parboil plant and equipment are used only in rice mill industry and that the parboiling process is exclusive to paddy. It has also been contended by the Association that parboiling units are integral part of rice mill. Subsequent to the parboiling process, the further process of dehusking and drying is carried out in the same unit. Therefore, parboiling rice machinery is an integral part of rice mill plant. Thus it has been argued by the Association that these machines merit classification under heading 8419 because of following main grounds : (i) Rice parboiling ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Chapter 84 : Subject to the operation of Note 3 to Section XVI and subject to Note 9 to this Chapter, a machine or appliance which answers to a description in one or more of the headings 8401 to 8424, or heading 8486 and at the same time to a description in one or other of the headings 8425 to 8480 is to be classified under the appropriate heading of the headings 8401 to 8424 or under the heading 8486, as the case may be, and not under the headings 8425 to 8480. Heading 8419 does not, however, cover : (a) germination plant, incubators or brooders (heading 8436); (b)grain dampening machines (heading 8437); (c) .... (d) (e) 4.2 Parboiling machinery, drier plant and rice mill in conjunction form the paddy processing. Thus such a plant can be considered as composite machines fitted together to perform the function of rice milling which is the principal function of such a combination. Thus in terms of the Section Note 3 4 even if one of the component/machinery is performing complementary functions, the classification of such component/machinery will be governed by the principal function being performed, and that in this case is ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Note 2 to Chapter 84 read with Note 3 to Section XVI. The par-boiling machine and dryer are self-contained machines which are designed to be installed independently and which perform their respective functions independently. Therefore, though they may be installed in a rice mill to work in conjunction with the milling machinery, the par-boiling machine and dryer do not appear to satisfy the requirements of Section Note 3 to be called composite machines/ multi-function machines meriting classification under CETH 8437. Further, par-boiling machinery does not constitute grain dampening machine as the end result of par-boiling of rice is reduction in the moisture of paddy. In view of the above, rice parboiling machine and dryer would merit classification under CETH 8419 as per Note 2 to Chapter 84. Circular No. 924/14/2010-CX., dated 3. 19-5-2010 is rescinded and it is directed that classification of rice par-boiling machine and dryer may be made under CETH 8419. Necessary action to protect the revenue interest in respect of past clearances may also be taken , 6. S/Shri Vikrant Kackaria and Saurabh Bagaria, learned Advocates represented M/s Jyoti Sales Corporation and M/S Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore Kolkata Bench of the Tribunal on similar facts. He submitted a copy of to technical opinion given by Shri Satish Bal, Emeritus Professor of IIT, Kharagpur. In the said technical opinion, he drew our attention to the following portion of the technical opinion :- The parboiling unit and the drying unit in a rice mill perform complementary functions and the two are fitted together and used in conjunction. Needless to state that the parboiling plant and the drying unit are integral to a rice mill producing parboiled rice. The parboiling unit and the drying unit are specifically designed for use in a rice mill to produce parboiled rice and cannot be used for any other grain, Accordingly he argued that the parboiling unit and drying unit which perform functions which are complementary to that of the rice mill should be classified as a part of rice mill machinery under 84379020. He further submitted letters from various rice mills stating that the parboiling and drawing machines are essential in the rice mill. He also referred to the book titled Rice Production Manual by Shri P.Pillayar. In the book, he referred to the block diagram of an ideal modern rice mill showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e processed Paddy is then sent to subsequent sections where de-husking, hulling, milling and polishing are undertaken. Briefly the par boiling process involves 3 stages, viz. Pre-soaking, soaking and steaming. In the 1 st stage, clean paddy is steamed for 3 to 5 minutes. In the 2 nd stage, pre-steamed paddy is soaked in water tanks for about 4 to 5 hours. In the last stage, the soaked paddy is passed through steaming process for 3 to 5 minutes. Subsequently the steamed rice is dried in a drier which is also normally supplied along with par boiling rice machinery. 11. From the processes outlined in the above paragraph, it is fairly clear that par boiling is a process which is used in the rice milling industry. The heading 8437 covers machinery used in the rice milling industry. If we were to look at rice mill, it will have different types of machineries. The input to this process flow would be the raw paddy and the final output from the rice mill will be the polished rice. The par boiling machinery could be part of a rice mill or stand alone and in either case the final output will be parboiled polished rice. Hence if we were to look at an entire rice mill including the par boi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be most appropriate for par boiling machines and/or driers manufactured and cleared from a factory. 15. It has been laboriously argued before us that reference should be made to note 3 to Section X I as well as note to 2 chapter 84 to decide the classification. It has also been argued that the par boiling machine and drier are fitted to t e other machines which are used in a rice mill and the entire bank f interconnected machines function as a composite machine render ng the function of milling the rice. Accordingly it has been argued that par boiling machine would be classifiable as part of such a rice mill under CETH 8437. We find such an argument is misdirected. Admittedly heading 8419 is a heading specific to the function performed by a particular heading. The same does not refer to the industry specific machine, but is relatable to function specific m chines. If the classification is to be adopted, as contested by the assessee, on the basis of industry specific (like in the present case rice industry) then the machines which stand specifically cover d under the said heading 84.19, would get shifted to the other heading dependent upon the industry in which they are to be u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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