2017 (3) TMI 1499 - AT - Central Excise

Goods classified for domestic use in Army kitchen exempt from Central Excise duty under Notification No. 10/2006.

The appeal was allowed in favor of the respondents regarding the classification of goods under Tariff Item No.73239100 or Tariff Item No.84385000. The ld. ... Classification of goods - Mincing Machine for Meat - whether classified under Tariff Item No.73239100 covering “Kitchen or other household articles and parts thereof” as mentioned by assessee or under Tariff Item No.84385000 which covers “Machinery for the Industrial preparation or manufacture of food or drink” as claimed by Revenue? - benefit of N/N. 10/2006 dated 01/03/2006 - ld. Commissioner (Appeals) has passed a reasoned order in view of the fact that the goods supplied by respondents were small kitchen gadget of specific design used in the kitchen of Indian Army - Held that: - the ground raised by Revenue are not sustainable because the Explanatory Notes, on which Revenue placed reliance, have no force of law and they are only for guidance whereas the finding of ld. Commissioner (Appeals) is on the basis of CETA, 1985 enacted by Indian Parliament. Therefore, the ground raised by Revenue are not sustainable - appeal of Revenue dismissed - goods correctly classified under Tariff Item No.73239100 covering “Kitchen or other household articles and parts thereof” - decided against Revenue. Issues: Classification of goods under Tariff Item No.73239100 vs. Tariff Item No.84385000; Applicability of Notification No. 10/2006 dated 01/03/2006; Validity of Order-in-Appeal No.10-CE/APPL/KNP/2009In this case, the main issue revolves around the classification of goods manufactured by M/s Rationale Iron & Steel Co. under Tariff Item No.73239100 or Tariff Item No.84385000. The Revenue contended that the goods should be classified under Tariff Item No.84385000 based on the Explanatory Notes of the World Customs Organization. The respondents argued that the goods were small kitchen gadgets exclusively used in the Indian Army's kitchen, thus not qualifying for classification under Tariff Item No.84385000. The ld. Commissioner (Appeals) agreed with the respondents, stating that the goods were not for industrial preparation or manufacture of food or drink but for domestic consumption in the Army's kitchen. Consequently, the appeal was allowed in favor of the respondents.The next issue pertains to the applicability of Notification No. 10/2006 dated 01/03/2006, under which the respondents claimed exemption from Central Excise duty. The Revenue argued that since the goods were not correctly classified under Tariff Item No.73239100, the respondents were not eligible for the benefit of the notification. However, the Tribunal's decision on the classification issue renders this argument moot, as the appeal was dismissed.The final issue concerns the validity of Order-in-Appeal No.10-CE/APPL/KNP/2009 passed by the Commissioner (Appeals). The Revenue appealed against this order before the Tribunal, challenging the classification of goods. The Tribunal, after considering the arguments and the law, held that the Explanatory Notes cited by the Revenue were not legally binding and that the ld. Commissioner (Appeals) had correctly applied the Central Excise Tariff Act, 1985. Therefore, the Tribunal dismissed the Revenue's appeal, upholding the order passed by the Commissioner (Appeals) in favor of the respondents.