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2019 (11) TMI 300

..... 05-CE, dated 24.02.2005 - Department contended that the classification adopted by the appellants is wrong and the pipes are classifiable under CETH 3917 and accordingly are not eligible for the said exemption - Whether classified under CETH 8424 9000 or under CETH 3917? HELD THAT:- There is no allegation by the Department that the said pipes have been sold/utilised for general purposes. It is pertinent to see that Shri Shyam Sundar Dash vide his statement dated 12.10.2010 stated that the product manufactured by them is nothing but a PVC pipe, the same is being used as an integral part of the drip irrigation system being manufactured by their company and hence their company was calling them as parts of Micro/drip irrigation system. As the PVC pipes manufactured and cleared by the appellants are evidently shows to be for irrigational purposes in agriculture/horticulture, the classification of the same is correctly done under CETH 8424 9000 and not under CETH 39.17 as contended by the Department - Appeal allowed - decided in favor of appellant. - Central Excise Appeal No. 2985/2011 - A/31021/2019 - 5-11-2019 - HON BLE MS. SULEKHA BEEVI C.S, MEMBER (JUDICIAL) AND HON BLE MR. P. ANJANI .....

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..... ed by Unit-2 are meant for and use as a part of drip irrigation and are not manufactured for general purposes, the appellants have correctly classified them under CETH 8424 9000 and have correctly availed the benefit of notification cited above. 6. Ld. AR Shri L.V. Rao for the department stressed the genesis of the case to the seizure of the PVC pipes cleared by the appellants and reiterated the findings of the Order-in-Original and submits that Board vide circular No. 380/13/98-CX dated 16th March, 1998 have confirmed that the heading provides against specific instructions will have to be preferred to more general description since the plastic pipes are very specifically described in Heading No. 39.17, they may be classified accordingly under Heading No. 39.17. He also relied upon the following case laws: i) Commissioner of Central Excise, Coimbatore vs. Salzer Controls Limited [2002(139)ELT 446 (Tri.-Chennai)]. ii) Paper Products Limited vs. Commissioner of Central Excise [1999(112)ELT 765 (S.C.)]. iii) Collector of Central Excise, Patna vs. Usha Martin Industries [1997(94)E.L.T. 460 (S.C.)]. iv) Ranadey Micronutrients vs. Collector of Central Excise [1996(87)E.L.T. 19 (S.C.)] 7. .....

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..... is statement dated 12.10.2010 stated that the product manufactured by them is nothing but a PVC pipe, the same is being used as an integral part of the drip irrigation system being manufactured by their company and hence their company was calling them as parts of Micro/drip irrigation system. We find by various judgments cited by the Counsel, the Tribunal has deliberated the classification of such pipes used in the micro/drip irrigation projects. The Tribunal in the case of Elgi Ultra Applies Limited (supra) has observed as follows: 7.It is also seen that in terms of note 2(b) of Section XVI parts if suitable for use solely or principally with a particular kind of machines are required to be classified along with the main item. These parts have become part of DIS and manufactured as per ISI specifications for use only as DIS is required to be considered for classification along with the entire system by applying Note 2(b) of Section XVI. Further even Note 4 of Section XVI reads as follows : Where a machine (including a combination of machines) consists of individual components (whether separate or inter-connected by piping, by transmission devices, by electric cables or by other de .....

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..... eral provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading includes parts for the appliances and machines of this heading. Parts falling in this heading thus include, inter alia, reservoirs for sprayers, spray nozzles lances and turbulent sprayer heads not of a kind described in heading 84.81. On a careful reading of the above note, it is seen that an underground net work (distribution lines and branchlines which carry the water from the control station to the irrigation zone) and also surface net work (dripper lines incorporating the drippers) constitute irrigation system and the above note also emphasises that such system are classifiable under heading 84.24 as functional units within the meaning of Note 4 to Section XVI. The parts thereof are also brought under this Section and the parts as are referred to above include reservoirs for sprayers, spray nozzles, lances and turbulent sprayer heads, to form the irrigation system as they carry out functions of the ground net work for distribution of water and surface net work. The irrigation system basically is of these pipes and the other items referred to above, which carry o .....

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..... f general use. Therefore, we find that the Department s contention that a specific heading should be preferred to a general heading is not applicable in the instant case. We also find that the case laws cited by the Ld. AR are not on the very issue of classification of PVC pipes when used as parts of irrigation systems. The case of Salzer Controls Limited (supra), the issue of discussion was about conduit tubings used to protect electrical wiring/cables and in control and communication panel and therefore cannot be applied to the present case as facts are different. In case of Paper Products Limited, the Hon ble Supreme Court has held that the departmental officers cannot take a stand which is contrary to the circulars/directions issued by the Board and in this case too is different from the case before us for consideration as far as the facts are concerned. The case of Usha Martin Industries relied upon by the Ld. AR is also of no use as it details the exemption notification. Thus, we find that the case laws cited by the Ld. AR are not in the context of classification of parts of irrigation systems and therefore not to be relied upon. As the issue is squarely settled by the cases .....

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