TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 656
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....rned Counsel appearing on behalf of the appellant at the outset submits the issue regarding classification of the goods in question has been decided against the appellant by the Larger Bench of this Tribunal in the case of M/s. Jyoti Sales Corporation vs. CCE, Panchkula - 2016 (341) ELT 328 (Tri. LB) wherein it was held that parboiling plants and parts thereof are classifiable under Chapter heading 8419. The appellant in that case has challenged the order of the Tribunal before the Hon'ble Supreme Court which is pending. He further submits that subsequently after the decision of the Larger Bench, the matter was placed before the Division Bench of the Tribunal and the Division bench in the case of M/s. Jyoti Sales Corporation vs. CCE, Panchkula - 2020 (374) ELT 936 (Tri. Chan.) it has been held that there was Circular No. 924/14/2010-CX dated 19.05.2010 wherein the said item was held classifiable under Chapter heading 8437 and attracted Nil rate of duty. The said Circular was withdrawn by the department on 15.05.2014 vide Circular No. 982/06/2014-CX thus the Tribunal held that no duty can be demanded till the time the circular was withdrawn by the department. It was held that the ci....
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....laced reliance on the Hon'ble Supreme Court decision in the case Continental Foundation Jt. Venture vs. CCE, Chandigarh - 2007 (216) ELT 177 (SC). He, without prejudice to the above, further submits that the value of the goods in question realized ought to be treated as inclusive of excise duty hence, the appellant is entitled for the benefit of cum-duty price. He also submits that if the duty is demanded the appellant should be allowed benefit of modvat/ Cenvat credit. 3. Shri Rajesh Nathan, learned Assistant Commissioner, (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that since the show cause notice was issued subsequent to rescinding of Circular No. 982/06/2014-CX dated 15.05.2014, in the present case, the show cause notice was validly issued and Circular dated 15.05.2014 will apply. Accordingly, demand on the basis of earlier Circular No. 924/14/2010-CX dated 19.05.2010 cannot be set-aside. 4. We have carefully considered the submissions made by both the sides and perused the record. We find that as regards the classification of goods, as of now, there is no dispute that the same is classifiable under Chapter heading....
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....nder heading 8419 because of following main grounds : (i) Rice parboiling machineries are used only in rice mill plant. (ii) These are integral part of rice processing plant and these cannot function in isolation. Therefore, function of Rice parboiling machinery/drying unit is complementary to other function of rice processing plant. 3. On the other hand, in support of classifying it under tariff heading 8419, it has been argued that Parboiling and drier plants perform the function of steaming and drying which are independent of milling and these occur before milling process. Therefore it has been viewed that parboiling and drier plant are not essential and integral part of rice mill and therefore it would merit classification under heading 8419. It has also been opened that machinery performing specific functions like steaming or drying are specifically covered by heading 8419. Further, reference has also been made to Chapter Note 2 to Chapter 84 to justify the classification under heading 8419. 4.1 On examination of the issue, the Board observes that the General rules for interpretation of Central Excise Tariff provide that "for legal purposes, classification shall be ....
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....being performed, and that in this case is rice milling. 4.3 Chapter Note 2 provides that if a machine can be classified based on description under heading 8419 and also under 8437, in that case it should be classified under 8419 only. Therefore, it would be seen that as per Chapter Note 2, the parboiling machine merit classification under heading 8419 but as per Section Note 3 and 4, the machinery merit classification under heading 8437. The Board observes that this controversy has been perceived by the HSN and at pages 1235 it has been mentioned that Chapter Note 2 which is known as rule of precedence for heading 8401 to 84.24 applies only to machines considered as whole. Composite machines or multifunction machines are required to be classified in accordance with Note 3 and Note 4 of Section XVI. As per this clarification available in the HSN, the parboiling machine and dryers which are part of composite machine (rice mill) would be correctly classified in terms of Section Notes 3 and 4 and therefore, the correct classification should be under heading 8437. Further, grain dampening machine has been excluded from the purview of heading 8419 and placed under heading 8437. One of ....
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....Chapter 84. 3. Circular No. 924/14/2010-CX., dated 19-5-2010 is rescinded and it is directed that classification of rice par-boiling machine and dryer may be made under CETH 8419. Necessary action to protect the revenue interest in respect of past clearances may also be taken. From the above Circular, it can be seen that the department has taken 'U' turn and clarified in the above Circular that the goods are correctly classifiable under Chapter heading 8419. 5. It is a settled legal position that the Board Circular issued by CBEC/CBIC is binding on the departmental officers. In view of this settled legal position, firstly, the show cause notice ought not to have been issued by following the binding Circular dated 19.05.2010. Therefore, the issuance of show cause notice itself is illegal and incorrect. Secondly, during the relevant period 2011-12 to 2013-14, Circular dated 19.05.2010 (supra) was in force according to which the goods were classifiable under heading 8437. It is settled position under various Hon'ble Supreme Court Judgments that any Circular which is beneficial to the assessee should be given effect irrespective to the different correct legal position of classifi....
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....have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue." Further, the Hon'ble Apex Court came to the occasion to examine the said issue again in the case of Kalyani Packaging Industries (supra) wherein the Hon'ble Apex Court observed as under :- "6. We have noticed that Para 9 of Dhiren Chemical's case is being misunderstood. It therefore becomes necessary to clarify Para 9 of Dhiren Chemical's case. One of us (Variava, J.) was a party to the Judgment of the Dhiren Chemical's case and knows what was the intention in incorporating Para 9. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all Courts/Tribunals and Bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical's case because of circulars of the Board in many cases the Department had granted benefits of exemption Notifications. It was submitted that on the interpretation now g....
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....on, the circular is in vogue and the monetary limit applies. We, therefore, do not find it necessary to go into the merits of the appeal, as the disputed amount in the present appeal is below 10 lakhs. 4.4 The department is bound by its own Circular and the instruction thereof. We are informed that no other circular withdrawing or reducing the monetary limit has been issued by the Department and circular dated 17-8-2011 hold the field as far as the prescription of monetary limit for filing appeal before High Court is concerned. It is pertinent to mention that we have taken the similar view in various tax appeals. 5. Accordingly, appeal is dismissed considering the monetary limit prescribed in the abovementioned circular dated 17-8-2011. While dismissing the appeal on the said ground alone, it is made clear that this Court has not gone into nor expressed anything on merits. The questions raised by the department in the appeal are kept open to be decided in appropriate case." 8. In view of the above discussions, as the circular dated 19-5-2010 was in operation during the period in question, therefore, we hold that the said circular is binding on the departmental officers. ....