TaxTMI 
TaxTMI 
2026 (7) TMI 1011
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....d by the Commissioner of Customs (Appeals-II), Chennai, whereby the Commissioner (Appeals) upheld the reclassification of the imported machinery from CTH 8436 10 00 to CTH 8438 80 90 for the purpose of levy of additional duty of customs (CVD). Appeal No. C/40597/2018 arises from another Order-in-Appeal No 08/2018 dated 08.01.2018 whereby the Commissioner (Appeals) rejected the appellant's appeal as barred by limitation on the ground that the appeal had been filed beyond the condonable period prescribed under Section 128 of the Customs Act, 1962. The delay involved is stated to be 159 days beyond the normal limitation period. 3. The brief facts, as borne out from the records, are that the appellant obtained specific permission from the Department of Animal Husbandry & Dairying (Fisheries Division), Ministry of Agriculture and Farmers Welfare, Government of India, for import of capital goods required for setting up a Shrimp Feed Manufacturing Unit under the Project Import Regulations. Pursuant thereto, the appellant imported IDAH Brand Shrimp Feed Production Machinery from Taiwan under three Bills of Entry dated 19.02.2016 and 02.03.2016(In respect of the first Appeal). 4. The ....
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....40597/2018, Learned Counsel submitted that the proceedings arose out of continuing provisional assessments and project import finalization. It was argued that the Department itself had treated the Bills of Entry as provisional and therefore limitation could not have been computed without finalization under Section 18 of the Customs Act. Reliance was placed upon National Thermal Power Co. Ltd. reported in 1998 (99) ELT 200 (SC). 6.1 Per Contra, the Ld. Authorized Representative Shri Vineet Goyal appearing for the Revenue reiterated the findings contained in the impugned orders. It was submitted that the imported machinery constituted industrial machinery used in commercial manufacture of shrimp feed and therefore stood excluded from Heading 8436 in view of the HSN Explanatory Notes and Revenue placed reliance upon the decision of the Tribunal in Laila Global Feed Pvt. Ltd. v. Commissioner reported in 2018 (364) ELT 185 (Tri.-Chennai). 6.2 According to the Revenue, industrial scale processing / manufacturing of Shrimp feed is clearly different and distinct from machinery installed in diary or poultry farms for making animal feed as contemplated under Heading 8436. It was conten....
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....achinery is specifically designed for manufacture of shrimp feed and therefore is squarely classifiable under CTH 8436 10 00, which covers "Machinery for preparing animal feeding stuffs." Learned counsel argued that shrimp is admittedly an aquatic animal and shrimp feed is nothing but animal feed. Proceeding on this basis, it was argued that the tariff entry under Heading 8436 directly and specifically covers the imported machinery and consequently resort to Heading 8438 is impermissible. The appellant further submitted that Heading 8438 is only a residual entry applicable where goods are not specifically covered elsewhere in Chapter 84 and therefore the specific entry under Heading 8436 must prevail. In support of this proposition, reliance has been placed upon Dunlop India Ltd. v Union of India reported in 1983 (13) E.L.T. 1566 (S.C.), Camlin Ltd. v Commissioner of Central Excise, Mumbai reported in 2008 (230) E.L.T. 193 (S.C.) and Collector of Central Excise, Nagpur v Simplex Mills Co. Ltd. reported in 2005 (181) E.L.T. 345 (S.C.). 10. The Ld. counsel for the appellant further submitted that the Department of Animal Husbandry and Dairying (Fisheries Division), Government of I....
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.... therefore stands excluded from the scope of Heading 8436 itself. Revenue further relied upon the decision of this Tribunal in Laila Global Feed Pvt. Ltd. v Commissioner of Customs, Chennai reported in 2018 (364) E.L.T. 185 (Tri.- Chennai) wherein classification of shrimp feed machinery under Heading 8438 was upheld after detailed consideration of the HSN Explanatory Notes. 13. Before examining the rival contentions, it becomes necessary to examine the competing tariff entries. Heading 8436 reads: - "Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery... machinery for preparing animal feeding stuffs." Heading 8438 reads: "Machinery, not specified or included elsewhere in this Chapter, for industrial preparation or manufacture of food or drink..." A plain reading of these tariff entries immediately reveals that Heading 8436 occurs in a statutory grouping dealing with agricultural, poultry keeping, bee keeping, forestry and allied husbandry machinery, whereas Heading 8438 specifically governs machinery engaged in industrial preparation or industrial manufacture of food or drink. 14. The appellant has mainly argued that C....
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....things of the same general class as those enumerated; that in other words classifying the goods in particular entry, it should fit into goods "of the same kind or species". Even by applying the above principle, we are of the considered view that shrimp feed production plant and machinery is more appropriately aligned with the machinery of a land used for manufacturing of food and drink for human or animal consumption. 18. The central flaw in the appellant's argument lies in isolating the expression "machinery for preparing animal feeding stuffs" from the larger statutory context in which Heading 8436 appears. The tariff entry cannot be read in fragments. The settled principle of statutory interpretation requires that tariff headings must be construed harmoniously and contextually. The expression occurring under Heading 8436 necessarily derives colour from the nature of the machinery otherwise grouped under the heading, namely agricultural, poultry keeping and allied husbandry machinery. We therefore find force in Revenue's submission that Heading 8436 primarily contemplates machinery associated with agricultural or farm-level feed preparation activities and not sophisticated ind....
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....planatory Notes cannot override a statutory tariff entry. However, the Department does not rely upon the HSN Notes to override the tariff but only as a legitimate interpretative aid to understand the scope and true legislative intent underlying the competing tariff headings, a principle expressly recognized by the Hon'ble Supreme Court itself in Wood Craft Products Ltd. (supra). The reliance placed on Vicco Laboratories (supra) is equally misplaced since the said decision merely reiterates that tariff entries must be construed according to their language and commercial identity of goods, which principle in fact supports Revenue because the imported goods in the present case are not ordinary feed preparation equipment but a technologically sophisticated integrated industrial production plant imported for large-scale commercial manufacture of shrimp feed. 22. The appellant has further relied upon Binny Ltd. (supra), and Johnson & Johnson Ltd. (supra) and the doctrine of ejusdem generis as explained by the Hon'ble Supreme Court in Siddeshwari Cotton Mills Pvt. Ltd. v. Union of India reported in 1989 (39) E.L.T. 498 (S.C.). In our considered view, these authorities do not advance th....
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....tizing, cooling and conveyor systems functioning together for continuous large-scale manufacture. The scale and technical nature of the machinery itself demonstrates that the goods are intended for industrial production and not conventional feed preparation ordinarily associated with agricultural or husbandry operations contemplated under Heading 8436. 25. Revenue has correctly pointed out that commercial aquaculture operations involving manufacture of shrimp feed on large scale stand materially distinct from ordinary agricultural or husbandry activities contemplated under Heading 8436. The machinery imported by the appellant is not machinery used within an agricultural farm merely to prepare feed for internal consumption. Rather, it constitutes a commercial industrial production facility manufacturing shrimp feed as a marketable commodity on large scale. This distinction, in our view, substantially strengthens Revenue's case that the machinery answers the description of industrial manufacturing machinery under Heading 8438 rather than farm or husbandry machinery under Heading 8436. 26. The Ld. counsel for the appellant placed reliance upon the judgment of the Hon'ble Supreme....
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....tes expressly exclude machinery clearly designed for industrial use. The Tribunal held that where machinery is imported as part of industrial shrimp feed manufacturing operations, the machinery ceases to fall within the scope of Heading 8436 and is more appropriately classifiable under Heading 8438. The ratio laid down therein directly supports Revenue's stand in the present dispute. 30. It is felt necessary to extract the above decision rendered by the Tribunal, Chennai which reads as below: - "Brief facts of the case are that the appellants had imported goods declared as parts of pellet mill and spare parts for shrimp feed machinery from Taiwan for a consideration of Rs. 12,74,468/- vide Bill of Entry No.482592 dated 22.4.2003. The goods were classified under CTH 84368090 and duty @ 25% BCD + nil CVD + 4% SAD amounting to Rs. 3,82,340/- was paid on 24.4.2003. Department took the view that the impugned goods are for industrial use and hence excluded from CTH 8436 vide HSN notes and that they instead merit classification under CTH 84389090. In adjudication proceedings, the classification of goods under CTH 84389090 was ordered and differential duty liability of Rs. 2,65....
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.... u 20% - 8438 90 - Parts : 8438 90 10 --- Of sugar manufacturing machinery kg. 20% - 8438 90 90 --- Of other machinery kg. 20% - 4.3 No doubt, the impugned items are parts of machinery for manufacturing shrimp feed. At the first glance, it may appear that they would fit into the CTH 8436 as since that entry covers "other machinery for preparing animal feeding stuffs". Nonetheless, the tariff entries have to be read in consonance with the Section and Chapter Notes not only of the Schedule to the Customs Tariff Act but also the notes laid down in the Harmonious System of Nomenclature (HSN) based on which the Customs Tariff Act has been codified. 4.4 The HSN notes for Heading 8436 reads as under : The HSN notes for 8436 reads .The heading covers machinery, not falling in headings 84.32 to 84.35, which is of the type used on farms (including agricultural schools, co-operatives or testing stations), in forestry, market gardens, or poultry-keeping or bee-keeping farms or the like. However, it excludes machines clearly of a kind designed for industrial use. 4.5 Notwithstanding the a....
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....block board is included within the meaning of the expression similar laminated wood in the same context of classification of block board. Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian Tariff of a different intention. Clearly, therefore, the HSN Explanatory Notes are entitled to far greater consideration than the Tribunal has given there. 3. The Tribunal has also said that the Collector (Appeals) had not relied upon the HSN Explanatory Notes. That was clearly an oversight of the Tribunal because its order says, earlier, thus : The Collector (Appeals) held that the photographic apparatus, as has been imported, for making printing blocks were excluded from Chapter Heading 84.38 vide Explanatory Notes to CCOM at Page 1288. 4. The civil appeals are, therefore, allowed. The orders under appeal are set aside. The appeals before the Tribunal are restored to it for being heard and disposed of afresh. All contentions shall be available to the ....
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....ion of the Government of India permitting import of the machinery under the Project Import Regulations. In our considered view, this argument cannot carry the matter further. Administrative approval granted by the Fisheries Department for project import purposes merely recognizes establishment of a shrimp feed manufacturing project. Such approval cannot determine tariff classification under the Customs Tariff Act. Classification must necessarily be decided on the basis of statutory tariff entries, Chapter Notes, HSN Explanatory Notes and settled principles of tariff interpretation. The appellant has not disputed the fact that what has been imported replies to a project and an industrial scale feed manufacturing plant. 35. We also find no merit in the appellant's argument that HSN Notes cannot be relied upon where the tariff language is clear. As already noticed, the Hon'ble Supreme Court in Wood Craft Products Ltd. v Commissioner of Central Excise reported in 1995 (77) E.L.T. 23 (S.C.) and Simplex Mills Co. Ltd. v Collector of Central Excise reported in 2005 (181) E.L.T. 345 (S.C.) has consistently held that where the Indian tariff is aligned with the Harmonized System of Nomenc....
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....-in-Appeal affirming the reassessment and levy of additional duty of customs does not suffer from any legal infirmity warranting any interference by this Tribunal. Limitation and Maintainability in Appeal No. C/40597/2018 (Against Order-in-Appeal No. SEA.C.Cus II No.08/2018 dated 08.01.2018) 42. We have carefully considered the findings recorded by the Commissioner (Appeals) in the impugned Order-in-Appeal No. SEA.C.Cus II No.08/2018 dated 08.01.2018 whereby the appeals were rejected as time barred on the ground that they were filed with a delay of 159 days beyond the period prescribed under Section 128 of the Customs Act, 1962. 43. The Commissioner (Appeals) proceeded on the basis that the communication dated 22.03.2017 issued by the Deputy Commissioner constituted the appealable order and accordingly treated the appeal as barred by limitation. However, on careful scrutiny of the records, we find that the approach adopted suffers from serious legal infirmities. 44. The records further reveal that in relation to subsequent Bills of Entry Nos. 7175895 dated 21.10.2016, 7986911 dated 27.12.2016 and 7982624 dated 27.12.2016, the appellant continued to dispute the classificati....
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....ined by the Commissioner (Appeals). 50. Equally, the appellant had specifically contended that under Section 2(2) of the Customs Act, the expression "assessment" includes provisional assessment and reassessment, and therefore refusal to issue a speaking order was itself legally questionable. This contention has also been completely overlooked in the impugned order. 51. Before rejecting the appeals on limitation, the Commissioner (Appeals) is required to determine certain foundational issues, namely whether the assessments are provisional or final, whether any order under Section 18 finalizing assessment issued or existed, whether the communication dated 22.03.2017 constituted an appealable order, and from which date limitation could legally commence. None of these issues have been examined. Further, as the imported shrimp feed manufacturing machinery was registered as a project import whether the same has been finalized or not under Project Import Regulations, 1986 has to be ascertained. This includes even the Bills of Entry involved in the first appeal viz., C/42047/2016. 52. The impugned order therefore suffers from non-consideration of relevant statutory provisions, fai....
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.... court on 13.07.2026) ============= Document 1 Heading 8436 of CETA, 1985 read as follows: Tariff Item Description of Goods Unit Rate of duty (1) (2) (3) (4) 8436 Other agricultural, horticultural, forestry, poultry-keeping or bee- keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders Appellant's Classification 8436 10 00 Machinery for preparing animal u Nil feedings stuff - Poultry-keeping machinery; poultry incubators and brooders 8436 21 00 - Poultry incubators and brooders u Nil 8436 29 00 -- Other u Nil 8436 80 Other machinery: 8436 80 10 --- Germination plat fitted mechanical and thermal equipment u Nil 8436 80 90 --- Other u Nil - Parts 8436 91 00 - Of Poultry-keeping machinery or poultry incubators and brooders u Nil 8436 99 00 -- Other u Nil HSN Explanatory Notes 84.36 - Other agricultural, horticultural, forestry, poultry-keeping ot bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders. 8436.10 - Machinery for preparing animal feeding stuffs - Poultry-keeping machinery; poultry incubat....