AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 478
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....here the tariff rate is nil, according to the department these goods are classifiable under heading No. 8428, as "other lifting, handling, loading or unloading machinery (for example Lifts, escalators, conveyors, Teleferice)". On this basis, by the impugned order, the commissioner, classifying the goods, in question, under heading No. 8428 has confirmed the demand against the appellant company alongwith interest thereon under Section 11AB and beside this, has imposed penalty of equal amount on them under Section 11 AC and penalty of Rs. One Crore on Shri Nirdosh Bali, Managing director of the appellant company. Against those orders, the appellants are before us. 3. Ld. Counsel for the appellants submits that it is the dispute of classification and it has not been disputed that the appellants were manufacturing rice mill machinery along with elevators and conveyors which were specifically designed for the machinery manufactured by them. The show cause notice as well 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 ....
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....as the appellants are supplying the complete rice milling machinery to buyers including elevators and conveyors. Therefore, the said machines are being supplied along with the other machines and same would be classifiable under Heading 8437. He took reliance on the decision of the Hon'ble Tribunal in the case of Commissioner of C.EX. Kanpur Versus Rationale Iron & Steel Co. reported as 2017 (6) G.S.T.L. (Tn. - All.) to say that explanatory notes to the HSN have no force of law and they are only for guidance and the classification is to be done as per the Central Excise Tariff Act. Even otherwise it is to be mentioned that even as per the description under Chapter Heading 8437 machinery use in milling industry it has been categorically held that grinding of crushing machinery would include feeder machines designed to ensure local and even flow of grain to the crushing rollers. The main function of the elevators and conveyors is to take the grain from one machine and feed the same in the other machines along with its machineries. Thus, it is clear that elevators and conveyors are in the nature of grain feeders only as they perform the function of feeding grains in various machines us....
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....he items being manufactured by M/s Eminence Equipments Pvt. Ltd. did not come under the category of composite machines as they were supplying only elevators and conveyors and not combination of machines. In view of the above, it is his submission that the impugned orders are to be set-aside and the appeals are to be allowed by classifying the said conveyors and elevators under Chapter Heading No. 8437 of Central Excise Tariff Act, 1985. 4. On the other hand, the Ld. AR for the Revenue strongly objected the arguments advanced by the Ld. Counsel for the appellants and submits that the Chapter Heading No. 8428 cover conveyors and elevators, therefore, they are specifically covered under the said entry and having support of the HSN explanatory notes, the Tariff Heading No. 8437 does not cover conveyors and elevators and same is classifiable under Chapter heading No. 8428. To support of her contention, she relied on the decision of the Tribunal in the case of Eminence Equipments Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-I - 2015 (330) ELT 344 (Tri.-Mumbai) wherein the issue before the Tribunal was classification of conveyors and elevators and this Tribunal has held that the co....
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....y notes itself these machines are feeders and same is covered under explanatory notes as feeder machines designed to ensure local and even flow of grain to the crushing rollers. 7. We have also seen the Section Note 3,4,5 to Section 6 of the Central Excise Tariff Act which are expected herein below:- "3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. 4. Where a machine (including a combination of machines) consists of individual components (whether separate 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 o....
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.... sustainable. Admittedly, in the case in hand, the revenue is heavily relied on the HSN explanatory note to Section 16 of the Central Excise Tariff Act to say that the conveyors and elevators are classifiable under heading No. 8428 is not applicable to the facts of the present case. We further take a note of the fact that explanatory note itself classifying feeder machines designed to ensure local and even flow of grain to the crushing rollers as classifiable under chapter heading No. 8437. The main function of the machines, these conveyors and elevators is take the grain from one machine and if the same in other machine alongwith its machines. Therefore, it is clear that elevators and conveyors are in industry of grain feeder and perform the function 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 c....