2011 (3) TMI 1317 - AT - Central Excise

Tribunal Upholds Classification of Par-boiling and Drier Plants, Emphasizing Independent Functioning

The tribunal upheld the classification of the par-boiling plant and drier plant under Chapter Heading 8419, emphasizing their independent functioning and ... Demand - Classification - Circular No. 924/14/2010-CX., dated 19th May, 2010 - plant comprised of composite machinery consisting of par-boiling machinery, drier plant and rice mill - the noticee had also submitted an affidavit dated 9th November, 2010 stating that the goods manufactured and supplied by their firm were used exclusively by the rice mills - Held that:- The par-boiling and drying plants have an independent function from that of rice mill and merely because the rice mill plant also includes par-boiling and drying plant in the appellants establishment that itself cannot transform the machinery or the plant comprising of par-boiling and drying machinery into a composite machinery forming part of the rice mill. Obviously the Commissioner in the order dated 9th August, 2010 on the basis that there was new material placed before the Commissioner to justify a different view from the one taken in relation to the earlier period has accepted the classification as proposed by the assessee which is contrary to the view taken in the earlier order for the earlier period - therefore, no infirmity in the classification for the product in question under Chapter Heading 8419 - Decided in favor of the assessee Issues:Classification of par-boiling plant and drier plant under Chapter Heading 8419 or 8437.Analysis:The appeal involved a dispute regarding the classification of par-boiling plant and drier plant under Chapter Heading 8419 or 8437, arising from an order passed by the Commissioner. The appellants argued that a Board Circular supported their classification under Heading 8437, citing a similar decision by CESTAT, Bangalore Bench. The Board Circular emphasized that composite machines should be classified under Section Notes 3 and 4 of Section XVI, thus supporting the classification under Heading 8437. It further clarified that par-boiling machinery, drier plant, and rice mill together form a composite machine for rice milling. The Commissioner's order extensively discussed the description and functioning of the machinery, concluding that the par-boiling and drying plants function independently from the rice mill. The Commissioner rejected the appellants' claim that the machinery formed part of a composite plant, emphasizing the independent functioning capacity of each machine. The decision of CESTAT, Bangalore, was noted but deemed non-binding as it was based on a concession without thorough analysis. Subsequently, the Commissioner accepted a different classification for the subsequent period based on new material presented. However, the appellate tribunal found no grounds to interfere with the Commissioner's classification under Heading 8419 for the product in question, dismissing the appeal.In conclusion, the tribunal upheld the classification of the par-boiling plant and drier plant under Chapter Heading 8419, emphasizing the independent functioning of the machinery and rejecting the argument that they formed part of a composite machine with the rice mill. The decision highlighted the importance of analyzing the factual matrix and material presented before making classification determinations, ultimately finding no justification to interfere with the Commissioner's order.