TMI Blog2024 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... used for rice milling industry as the part of the composite machinery of rice milling, therefore, having merit classification under chapter heading No. 8437. The Tribunal in the case of Moped Assembly [ 2000 (12) TMI 408 - CEGAT, CHENNAI] , held that sheet metal components for use exclusively in rice milling industry are classifiable under heading 8437 of CETA. The demands confirmed in the impugned order are not sustainable. When the demands are not sustainable, interest and penalty also do not survive - The impugned order set aside - appeal allowed. - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Tej Prakash Toshniwal, Advocate for the Appellant. Shri V. Srikan Rao, AR for the Respondent. ORDER This Appeal has been filed by M/s Ricetec Machinery Pvt Ltd, against the Impugned Order dt.18.08.2016 passed by the Commissioner of Customs, Central Exise Service Tax, Hyderabad-IV. 2. The brief facts involved in this case are that the Appellants (unregistered, not paying duty) are manufacturers of various machinery such as Grain cleaning machine, Grain De-stoner machine, Grain stone remover, Grain Precleaner, Grai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing rice mill machinery and spare parts thereof, the confirmation of classification is contrary to the proposition; it is not open for the Department to classify the impugned products under CETH 8437 for certain period and under CETH 8419 for the later period and it is arbitrary; reliance placed on CBEC circular is mis-placed and the circulars cannot travel beyond the Statute; the Adjudicating Authority seriously erred in observing that the invoices issued by the Appellants are not for rice mill machinery and parts thereof. Learned Counsel submits Brochures of the relevant products and submits that the impugned goods are rice mill machinery and parts thereof rightly classifiable under 8437 of CETA. 5. Learned Counsel for the Appellant also submits that in interpretation of specific tax entries, one should construe the strict meaning to respective entries giving importance to specific entry rather than general entry. He relies on Alpsco Graintec Pvt Ltd Vs. Commissioner of Central Excise Service Tax, Chandigarh-II [2019 (365) ELT 944 (Tri-Chan)], which was affirmed by the Hon ble Supreme Court as reported at [2019 (368) ELT A225 (SC)]. He also relies on Moped Assembly Vs. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the impugned order have nowhere disputed the fact that the sale of the said items have been made to rice millers only and not to any other industry. The department has solely confirmed the demand on the basis of the explanatory note to HSN wherein it has been mentioned that Heading 8437 would not include conveyors and elevators of Heading 8428. It is to be mentioned that section note 3, 4 5 to Section 16 of the Central Excise Tariff Act clearly clarify that where two or more machineries are fitted together to form a function complementary and alternative to each other and consist of individual components then the whole machine is to be classified in the heading appropriate to that function. It is his submission that the machine namely elevators and conveyors are designed specifically for the rice mills and are supplied along with the other machinery supplied to the rice millers and hence it constitutes combination of machines and ultimately perform the function of rice milling and thus as per the Section notes the entire machinery would be classifiable under Heading 8437 which is for machinery used in milling industry................. 9. We further find that the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other, belt type U 12% - 8428 39 00 Other U 12% - 8428 40 00 Escalators and moving walkways U 12% - 8428 60 00 Teleferics, Chair-lifts, Ski-raglines, traction Mechanisms for funiculars U 12% - 8428 90 Other machinery: 8428 90 10 For coal handling U 12% - 8437 Machines for cleaning, sorting and 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 farmtype machinery 8437 10 00 Machines for cleaning, sorti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 5. For the purposes of these notes, the expression machine means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85. On going through the above provisions, we find that the conveyors and elevators manufactured by the appellants are designed, specifically, for rice mills which has not been disputed by the adjudicating authority in the impugned order, wherein it has been observed by the adjudicating authority that the goods in question are basically conveyors elevators, which are used for the transportation of the rice in a rice mill from one stage to the another. They can be horizontal as well as vertical as per the requirement of the Industry . These conveyors and elevators manufactured by the appellants specifically designed for use in rice mills are supplied alongwith the other rice mill machinery to the rice m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of feeding grains in various machines used in rice mill. In these set of observations, the merit classification of the conveyors and elevators used in specifically designed for rice milling are classifiable under chapter heading No. 8437. We further take a note of the fact that in the case of Moped Assembly (supra) this Tribunal has observed that sheet metal components for use exclusively in rice milling industry classifiable under chapter heading No. 8437. Admittedly, in this case, these conveyors and elevators are specifically used for rice milling industry as the part of the composite machinery of rice milling, therefore, having merit classification under chapter heading No. 8437. 8. We have also gone through the decision of the Hon ble Apex Court in the case of G. S. Auto International Ltd. (supra) wherein the Hon ble Apex Court observed as if the items specifically made for specific machine would be classifiable as part of the said machine and not under the general heading. Admittedly, in the case in hand, the conveyors and elevators are for specific use of rice milling industry and nowhere else, in that circumstances, the same merits classification as per the rice milli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these observations of the Collector (Appeals) support the view of the appellants that the goods are classifiable under Heading 84.37. 6. We have also perused the case law cited and relied upon by the learned Consultant in the case of Thermax Ltd v CCE (supra) we find that identical view was expressed by this Tribunal after examining the technical literature, pamphlet and catalogue stating that if certain goods in complex machinery may be for exclusive use and if the goods are exclusively used in the rice-milling industry, then they will be classifiable under Heading 84.37. 7. In view of the above, we hold that the goods manufactured by the appellants are classifiable under Chapter Heading 84.37 and further that these goods will be entitled to the benefit of Exemption Notification No. 111/88-CE. The appeal is allowed in the above terms. 11. In view of the above, we are of the considered opinion that the demands confirmed in the impugned order are not sustainable. When the demands are not sustainable, interest and penalty also do not survive. Accordingly, we set aside the impugned order and allow the Appeal. 12. Appeal allowed. Appellant shall be entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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