TaxTMI 
TaxTMI 
2023 (9) TMI 1085
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....ion, investigation was initiated. The officers of the Preventive Unit visited the premises, verified the accounts and recorded statements. It was seen that appellants were clearing the good , namely, (1) Auto feeder (2) Chick Drinker and 3) Poultry cage under CTH 84361000 as poultry keeping machinery and had not charged any excise duty in the invoices, mentioning that the goods are 'exempted vide notification No.111/88 dt. 01.09.1988 as amended and CSN No.8436 Nil by Tariff". Along with such goods they also cleared various products like 'Hose PVC, 'Flexible Blue', Tee Joint Nipple' etc. without payment of duty classifying them also under CTH 84361000. The said chapter heading 8436 of Central Excise Tariff Act, 1985 is for "Other agricultural, horticultural, forestry, poultry keeping or bee keeping machinery including germination plant fitted with mechanical or thermal equipments; poultry incubators and brooders." It appeared to the department that the products namely Chick drinker, Auto feeder and Poultry cage have no mechanical function and being made out of plastic is not classifiable under 8436 and but merits classification under 3926 (Auto feeder, Chick drinker) and 3923 (Poult....
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....rd movement of the feed from the feeder cone to the plate. 3.3 In so far as the poultry cage is concerned, the same consists of cage top, cage bottom, cage side cover big, cage side cover small and cover--sliding cage. It is designed keeping in mind the space area required by each chick / bird, proper ventilation to avoid suffocation, prevention of injury to the birds and easy handling. The cage is specifically manufactured solely for use in the poultry industry. It is special box with doors and is used for shifting the baby chicks / poultry from the hatchery to the poultry farm, inside poultry farm during vaccination and from farm to dressing / processing unit. 3.4 The only reason assigned by the department in the adjudication order for classifying the chick drinker and auto feeder under 39269099 is that the same works merely on air locking mechanism and does not have any in built mechanism so as to classify as 'machines' under 84361000. According to the department, for an item to be classified under Chapter Heading (CETH) 8436, it has to be a machine which fits into the dictionary meaning and in the nature of 'some mechanical contrivances which by themselves or in combinati....
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....g 3923 / 3926 is as under : 3923 ARTICLES FOR THE CONVEYANC OR PACKING OF GOODS, OF PLASTICS; STOPPERS, LIDS, CAPS AND OTHER CLOSURES, OF PLASTICS 392310 -- Boxes, cases, crates and similar articles: 39231010 ------ Plastic containers for audio or video cassettes, cassette tapes, floppy disk and similar articles 12.5% 39231020 --- --- Watch--box, jewellery box and similar containers of plastics 12.5% 39231030 ------ Insulated ware 12.5% 39231040 ------ Packing for accommodating connectors 12.5% 39231090 ------ Other 12.5% -- Sacks and bag (including cones) 39232100 ---- Of polymers of ethylene 18% 392329 ---- Of other plastics : 39232910 ------ Of poly (vinyl chloride) 18% 39232990 --- --- Other 18% 392330 --Carboys, bottles, flasks and similar articles: 39233010 ------ Insulated ware 12.5% 39233090 ------ Other 12.5% 39234000 -- Spools, cops, bobbins and similar supports 12.5% 392350 -- Stoppers, lids, caps and other clos....
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.... eggs. (E) Egg candlers (or testers) with mechanical features (including photo--electric testers) other than stating testing lamps. (F) Sexing and vaccination equipment, enabling hatcheries to separate chicks of different sex and to vaccinate them. These machines are not designed to be used by veterinary surgeons. The heading does not include machines, known a chick counting and boxing systems for automatically counting and placing chicks in boxes (heading 84.22); the handling of the chicks is the primary function, the counting being merely a secondary function permitting to place in a box a fixed number of chicks predetermined in accordance with the size of the box. " 5. The Ld. Counsel submitted that all the impugned goods are meant for poultry farming and is not in the nature of general goods which can be used by others. The Chapter Heading 8436 covers Agricultural, Horticultural, Forestry, Poultry, Bee--keeping machineries. The tariff prescribes 'Nil' rate of duty for goods falling under Chapter Heading 8436. The HSN Explanatory Notes to Chapter Heading 8436 states that poultry keeping machines include, items such as Incubators, Hatchers, Brooders,....
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....liances and such machines covered under Section XVI (i.e. Chapter 84 and 85) need not only be mechanical or electrical machinery but can also be apparatus and plant, which is neither mechanical nor electrical. 10. It is submitted that the Explanatory Notes to CETH 8436 covers machinery, equipment, apparatus used on farm, in forestry, market gardens, or poultry--keeping or bee--keeping farms or the like amongst the various equipments covered therein, automatic watering--troughs for cattle, horse, pigs etc. is one of the other agriculture, horticulture or forestry machinery which is covered under CETH 8436.The chick drinker and the auto feeder for poultry are clearly akin to the automatic watering--troughs which is specifically covered under CETH 8436. Both these equipments or apparatus work on the principal of air locking mechanism and automatically release the water or the feed, on depletion of the same below the prescribed level. 11. It is submitted that the contention of the department that there is no inbuilt mechanism either in the chick drinker or auto feeder, besides the same being an irrelevant criteria, is factually incorrect as it works on the principal of air lock m....
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....base metal, but the Section also covers certain machinery of other materials (e.g., pumps wholly of plastics) and parts of plastics, of wood, precious metals, etc.) 15. The Ld. Counsel pointed out that as per General Content per (A) above, the chapter 84 covers apparatus and appliances and parts thereof, together with certain apparatus and plant which is neither mechanical or electrical (such as boilers and boiler house plant, filtering apparatus etc.) and parts of such apparatus and plant. 16. Further, as per General Content (B) above, the Chapter 84 covers machinery other materials (eg. Pumps wholly of plastics) and parts of plastics, of wood, precious metal etc. Thus machines need not be always of metal it can be made of plastic, wood too. The adjudicating authority has classified the goods under Chapter 39 for the reason that the impugned goods are made of plastic which is erroneous. 17. It is urged that as per Note to Section XVI, Chapter Notes & HSN Explanatory Notes the appellant has correctly classified the goods under 8436. 18. The Ld. Counsel submitted that the adjudicating authority has placed reliance on the Board Circular and the decision in the case of Azr....
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....gh Court of Delhi in the case of Azra Poultry Equipments (supra). The Ld. A.R prayed that the appeals may be dismissed. 23. Heard both sides. 24. The issue involved is (1) whether the Chick drinker and Auto feeder manufactured by the appellant are classifiable under CETH 84361000 of Central Excise Tariff Act, 1985 as claimed by the appellant or whether to be classified under CETH 39269099 as held by the department ? (2) whether the poultry cage manufactured by the appellant is classifiable under CETH 84361000 as claimed by the appellant or whether to be classified under CETH 39231090 as held by the department ? (3) whether the demand of duty, interest and penalties are sustainable. 25. The Ld. Counsel has explained the nature and functioning of the impugned goods, namely Chick drinker, Auto Feeder and Poultry cage. The allegation in para 9.3 of the SCN is that the goods do not have mechanical function and therefore cannot be classified as poultry machinery under 84361000. It is also alleged that as the goods are made of plastic they would come under chapter 39 which covers articles of plastic. 26. It would be convenient to refer the image of the goods under disput....
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...., forestry poultry keeping or bee--keeping machinery, including germination plant fitted with mechanical or thermal equipments; poultry incubators and brooders'. The heading 8436.10 is for poultry--keeping machinery. 8436 takes in the parts of such machinery also. [The chapter headings and HSN Explanatory Notes have already been noticed]. 28.3 We therefore have to hold that the impugned goods are indeed poultry keeping machinery and merits classification under 84361000. The adjudicating authority has held that the miscellaneous products namely, Hose--PVC, Flexible Blue, Tee joint Nipple etc. cleared along with the above goods are also to be classified under CETH 39269099 / 39231090. As we have already held that the Chick drinker, Auto feeder, and Poultry cage are rightly classifiable under CETH 84361000, we hold that these miscellaneous products cleared along with and corresponding to the finished products are also to be classified under CETH 84361000. We hold that the appellant is eligible for the benefit of 'nil' rate of duty. Our conclusion is also supported by the decision of the Tribunal in the case of Shiva Poulty Equipments Vs CCE -- 2017 (7) GSTL 243; Alchemists Ltd. Vs ....
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....git classification, since the subsequent Entry No. 8436 specifically included the parts of the poultry keeping machinery, the Hon'ble Delhi High Court's decision may not be applicable to the new tariff entry including parts. We also note that this decision of Delhi High Court was challenged before the Hon'ble Supreme Court by way of filing SLP and the Apex Court vide its order dated 23-7-2012 [Azra Poultry Equipments v. Union of India - 2015 (323) E.L.T. A21 (S.C.)] allowed the SLP to be withdrawn, so as to pursue the matter with the Commissioner (Appeals) and directed that the Commissioner (Appeals) will consider the case on its merit uninfluenced by any observation by the Delhi High Court. We also find that the Commissioner of Central Excise, Hyderabad vide his separate Order-in-Original dated 16-5-2014, in the case of Weld Fuse Pvt Ltd. (supra) has taken note of the above developments and has decided that welded wire mesh, used in the poultry farms, is properly classifiable under Item No. 8436 91 00. 6. The goods manufactured by the appellant are in the form of Welded Wire Mesh and are supplied to poultry farms and claimed to be specifically designed parts of poultry ke....
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....y by the Hon'ble Supreme Court while disposing of the SLP filed by the assessee. 17. On the legal position, it is seen that Tariff Heading 8436 91 00 is not dealing with machinery or equipments per se but with parts of poultry keeping machinery or poultry incubators and broodes. Reading together Note-I of Section XV, Note-2 of Section XVI and the scope of the entry in the above Tariff heading, it is apparent that there is no changed circumstances to warrant the change of classification as already upheld by the Hon'ble Tribunal in the assessee's own case and followed by this office vide the above-mentioned order-in-original for all the subsequent periods. It is pertinent to note that CTH 8436 91 00 dealing with parts in the tariff in the column for unit 'Kg' is mentioned. In respect of specific machinery and equipment 'u' unit is mentioned indicating thereby that in respect of parts of poultry incubators and broodes, the standard unit is 'kilogram'. The standard unit is indicative of the nature of product. In the case, it is not individual part of machinery but wire mesh. The HSN Explanatory Note for poultry keeping machines, incubators and broodes specifies batteries, larg....