TaxTMI 
TaxTMI 
2016 (12) TMI 137
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....t Danone are engaged in manufacture of probiotic drink. The Appellant, based upon investigation by the DRI, were issued Show Cause Notice dt. 25.04.2012 alleging that the Appellant had imported machines for their plant by mis-declaring the same as 'Dairy Machine' and wrongly claiming exemption under serial No. 11 of Notification No. 6/2006- CE dt. 01.03.2006. That the said machine worked on the principles of heat exchange and were used for the purpose of sterilization, pasteurization, incubation (maturing after pasteurization) and dilution etc. and is thus excluded from goods under heading No. 8434 of the Customs Tariff as 'Dairy Machine'. During investigation the officers retrieved the documents/records and also recorded statements of employees of the Appellant firm. Shri Kiyoshi, the Managing director in his statement dt. 25.08.2011 stated that the main plant was imported in 5 consignments of machineries under bills of entry No. 739124 dt. 18.01.2007, 763776 dt. 03.05.2007, 801219 dt. 18.06.2007, 625041 dt. 31.08.2007 and 628974 dt. 17.09.2007: that the said plant comprised of machineries viz (1) tanks for blending, culturing, storage etc; (2) water sterilizer for water steriliza....
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.... and water(Sr. No. 1 of Annexure-B Attached to this order). (ii) Seed Tanks: These tanks sterilizes the mixture mentioned above by ultra heat treatment. Thereafter, the mixture is allowed to cool and culture of lactobacillus bacteria is added for fermentation of sterilized mixture (Sr. No. 2 of Annexure -B). (iii) Storage tanks-These tanks are used for storage of fermented mixture for maturing and cooling. Storage tanks are also used to add sweetener/flavor and stir the homogenized mixture (Sr. No. 3 OF Annexure -B) (iv) Homogeniser and CIP units: It homogenizes the particles of fermented mixture by high pressure CIP units are for mechanically cleaning of manufacturing plant equipment(Sr No. 4 of Annexure -B) (v) Water dilution and storage surge tanks: Sweetened/flavoured solution is diluted with sterilized water. The diluted solution is marketed as "Yakult"(Sr. No. 5 of Annexure-B) (vi) Filing Machine: It fills "Yakult" in empty plastic bottles(Sr. No. 6 of Annexure-B). (vii) Unscrambler: unscramble aligns empty plastic bottles for feeding in filling machines (Sr. No. 7 of Annexure B) (viii) Shrink Wrap Machine: It packs "Yakult" filled plastic bottles in the ....
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....ounsel with Shri. T. Vishwanathan, Ld. Advocate, Shri. Shekhar Vyas, Ld. Advocate, Ms. Srinidhi, Ld. Advocate, Shri. Ajay Sharma, Ld. Advocate and Ms. Poonam Lau Ld. Advocate appeared for the Appellants. Ms. Srinidhi, Ld. Counsel for the Appellant M/s Yakult submits that the department had raised dispute on classification and issued query. All the queries were settled by submitting Chartered Engineer Certificate and other documents/ opinions certifying the goods as machinery for use in production of fermented milk. The goods were cleared after the satisfaction of the customs authorities and change of classification of part imported consignments as per discussion with the authorities. The Appellants bonafidely believed the goods are to be Dairy machinery. The Suppliers agreed with the Appellant's reasoning and hence provided them with the soft copy of SPS Sheet enabling them the changes to be made. That even the department did not accept the classification indicated in SPS Sheet in case of some goods and assessed it based upon its understanding of Customs Tariff. That the imported goods involved in the case were cleared by availing exemption under Notification No. 6/2006 - CE dt. 31....
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.... the adjudicating authority is not applicable as the same is related to equipment possessing heating and cooling elements and further the applicability of Note 4 to Section XVI was never considered. That the exemption under Notification No. 6/2006 - CE is available irrespective of classification of the goods. The Ld. Counsel submits that the HS codes mentioned in SPS sheet is only suggestive of possible heading but is not relevant for custom classification. Even the department altered the classification in unaltered SPS Sheets which proves their point. The law does not require them to produce or submits SPS Sheet. The extended period of limitation is not invokable as the goods were correctly described and were examined by the department. That since the demand has been raised under Section 28, the contention of the DR that the present case is under Section 125 (2) is not sustainable which is only for violations of post import conditions. He submits that since there is no mis-declaration, collusion, willful misstatement by the Appellant the goods cannot be confiscated. The ld. Counsel also submits that the impugned order is not sustainable as cross examination of Shri Anil Choudhary ....
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....4 and Explanatory Note 7 to chapter 84. He also relies upon the judgment of HMT Ltd. vs. CCE, Aurangabad 2007 (214) ELT 10 (SC), Dairy Development Corp. Vs. Collector of Customs 2000 (119) ELT 629 (TRI) and Indo Berg Ltd. Vs. CCE, Delhi 2001 (134) ELT 749. 6. We have carefully considered the submissions made by both the sides and perused the records. 7. We find that the Appellant had imported various goods covered by 5 consignments which was shipped by M/s Yakult Honsha Ltd., Japan. The investigation conducted by the department reveals that whereas out of the 5 consignments the first, fourth and fifth consignments were cleared by declaring the goods under the respective HS Codes and suppliers invoices. In case of 2nd and 3rd consignments cleared under Bill of Entry No. 763776 dt. 03.05.2007 and BE No. 801219 dt. 18.06.2007, the goods were shown as 'Dairy machines' and were cleared by availing exemption from CVD in terms of Notfn. No. 6/2006 - CE dt. 01.03.2006. It was during investigation that the officers found that the original 'Specification of Production equipment' Sheets (SPE Sheets) received from the supplier containing HS codes were altered by the importer so as to sho....
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....84 and 85 are in all cases to be classified in their respective headings. Further as per Note to chapter 84 .......a machine or appliance which answers to description in one or more of the headings 8401 to 8424 or heading 8486 and at the same time to a description in one or other headings 8425 to 8480 is to be classified under the appropriate heading of the headings 8401 to 8424 or under the headings 8486, as the case may be, and not under heading 8425 to 8480" Also the chapter note 7 to chapter 84 states that "a machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. Subject to note 2 of this chapter and Note 3 to Section XVI, a machine, the principal purpose of which is not described in any heading or for which no purpose is, unless the context otherwise requires, to be classified in heading 8479. Heading 8479 also covers machines. We find that in the present case the tanks were thus to be classified under 8479 and even the original SPE Sheets provided that HS Codes. Similarly the other goods are also classifiable as per their individual description as stated in show cause notice. ....
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....mounting on transport vehicles or vessels of Section XVII." 5. It is, thus, apparent that the impugned product will be rightly classifiable under Heading 84.28 even though it is finally to be incorporated in dairy machines. According to Explanatory Notes of H.S.N. below Heading 84.34, Parts of the machine are to be classified in the same heading "subject to the general provisions regarding the classification of parts (see the General Explanatory Notes to Section XVI)." Note 2(a) to Section XVI of the Central Excise Tariff Act clearly provides that Parts which are goods included in any of the headings of Chapters 84 and 85 are in all cases to be classified in their respective headings. As the impugned product is included specifically under Heading 84.28 it has rightly been classified there. This was the view expressed by the Tribunal in the case of Bhilai Engineering Corpn. Ltd., supra. Even the decision in the case of Laxmi Boilers is against the Appellants as the Tribunal observed therein that "All these parts would doubtlessly fall under a number of headings." The Tribunal in the said case was considering the availability of Notification No. 205/88 (Sl. No. 18) which acc....