2018 (3) TMI 31 - AT - Customs

Tribunal upholds appellant's claim on machine classification & assessable value charges, emphasizes justification

The Tribunal rejected the alteration in classification of the imported machine, upholding the appellant's claim under heading 8422 3000. Additionally, the ... Classification of imported goods - Rommelag Bottle Packing Machine - whether classified under CTH 8422 3000 or otherwise? - benefit of N/N. 21/2002 at serial no.237 - Held that: - the issue on classification has been settled by this Tribunal in appellant’s own case, Nirma Ltd. Versus Commissioner of Customs, Mumbai [2018 (2) TMI 1541 - CESTAT MUMBAI]., that for alteration of declared classification the pre-requisite of justification is absolutely necessary - the goods imported are identical to that effected on earlier occasion and that alteration in the classification on similar justification was disapproved by the Tribunal. Valuation - enhancement in value - inclusion of installation and commissioning charges - Held that: - the component has been shown separately in the purchase order. Neither is there anything on record to indicate that there was a condition implicit in sale to justify invoking of rule 10 of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. Appeal allowed - decided in favor of appellant. Issues: Classification of imported machine under the Central Excise Tariff Act, 1985 and inclusion of erection, installation, and commissioning charges in the assessable value for duty assessment.Classification Issue Analysis:The appeal involved the classification of the 'Rommelag Bottle Packing Machine' imported by M/s Nirma Limited under the Central Excise Tariff Act, 1985. The appellant classified the machine under heading 8422 3000 to claim benefits under notification no.21/2002, while the assessing officer argued it should be classified under 8477 3000 due to its primary function of producing plastic containers from resins. The Tribunal referred to a previous order in the appellant's case, emphasizing the necessity of justification for altering the classification, which was disapproved in a similar situation previously. The Tribunal found the goods imported were identical to those previously assessed, thus rejecting the alteration in classification and upholding the appellant's claim.Assessable Value Issue Analysis:The second issue revolved around the inclusion of erection, installation, and commissioning charges in the assessable value for duty assessment. The original authority had determined a differential duty amount, including these charges, for recovery under the Customs Act, 1962. The appellant contested this inclusion, citing previous Tribunal decisions excluding such charges from the assessable value. The Authorized Representative highlighted note 4 in section XVI and argued that the machine's functions are executed sequentially, with container molding as the primary function. However, the Tribunal found that the charges were shown separately in the purchase order, and there was no evidence to invoke rule 10 of Customs Valuation Rules. Relying on precedent cases, including decisions by the Hon'ble Supreme Court, the Tribunal allowed the appeal, setting aside the impugned order due to the lack of justification for including the charges in the assessable value.In conclusion, the Tribunal's judgment addressed the issues of classification and assessable value comprehensively, emphasizing the importance of justification for altering classification and the need for explicit conditions to include additional charges in the assessable value. The decision was based on legal principles, previous Tribunal orders, and relevant case law, ultimately ruling in favor of the appellant and setting aside the lower authorities' findings.