Sri Ranga Alloys Ltd. vs >1996(03)LCX0035

1996(03)LCX0035

BEFORE THE COMMR. OF CUSTOMS AND CENTRAL EXCISE (APPEALS), MADRAS

Shri A.K. Raha

IN RE : SRI RANGA ALLOYS LTD.

Order No. M.Cus : 436/96, dated 1-3-1996

[Order]. - This appeal is against the Order No. S59/343/95 passed by Asst. Commissioner of Customs (Gr. 5A), Custom House, Madras.

2. The present appellant M/s. Shri Ranga Alloys Ltd., Coimbatore had imported 1 No. used foundry equipment lot and filled Bill of Entry No. 51334 dated 17-10-1995 the same claiming notification benefit 49/95 under chapter 8479.89. They requested their letter dated 21-11-1995 to classify the impugned goods under chapter 8428.39 read with Notification No. 49/95, dated 16-3-1995.

3. The lower authority had classified the above goods under sub-heading 8479.89 at 50% CVD without benefit of Notification No. 49/95, the claim as applicable to production of a commodity at a concessional rate of duty 25% + 10% CVD is not permissible for the reason not commodity was produced.

4. Being aggrieved by the above order, the appellant has filed this appeal with facts and grounds of the appeal and requested for personal hearing.

5. It is submitted by the learned Counsel that the impugned machine, invoiced by the supplier as Sand Slinger, and miscellaneous spare parts were correctly classifiable under sub-heading 8428.39 read with Notification No. 49/95-Cus., dated 16-3-1995. It is their case that Sand Slingers are used in foundries for transportation of virgin sand, processed sand for [overhead] bunder and mullers to various work centres where moulding machines are installed. Instead of carrying the sand manually by workmen, the equipment is used and it replaces 10 workmen per shift. This is mobile Sand Slinger and hence, it can cover the entire moulding area and deliver processed sand much faster. This equipment, according to the technical write-up produced by the appellant, consists of a mobile trolly on which a fixed column and a rotary arm on the top pivot is fixed. There are small motors in this equipment for driving the conveyors. It is also submitted that the Sand Slinger moves within the factory area in both the directions, onward and backward. Since its basic function is conveying the sand, it should be taken as a conveyor. Going by the Dictionary meaning (vide Anmol’s Dictionary of Mechanical Engineering by S.B.Chopra), Sand Slinger is a machine which is used for filling a mould with sand. It is delivered in wads at speed by centrifugal force. As per McGraw-Hill Dictionary of Science and Technical Terms, Sand Slinger is a machine which delivers sand to and fills moulds at high speed by Centrifugal force. It is, thus, pleaded by the learned Counsel that being a conveyor, the goods were correctly classifiable under Heading 84.28. Since all goods falling under Heading 84.28 were covered by Customs Notification 49/95, the pre-condition, as envisaged by the lower authority that for the purpose of benefit of the aforesaid Notification, the machinery ought to be used for production of commodities, would not apply. The abovesaid condition applies to the goods falling under Heading 84.79 only. It is submitted that it was a mistake on the part of the appellant to declare sub-heading 8479.89 for classification of the impugned goods in the Bill of Entry. It is submitted that the correct classification was under Heading 84.28 and not Heading 84.79.

FINDINGS

6. I have carefully considered the written and oral submissions made by the appellant through their Counsel.

7. In the instant case, the appellant imported one used Foundry equipment lot described as Sand Slinger in the invoice as also in the Bill of Entry together with its spare parts and sought classification in the Bill of Entry under sub-heading 8479.89 together with the benefit of Notification No. 49/95 Cus. The Customs accepted the proposed classification but denied the benefit of the aforesaid Notification. The Order-in-Original, the ground for denying the benefit of aforesaid Notification was spelt out by the lower authority. According to him, Customs Notification 49/95 provides a condition that all goods falling under Heading 84.79 ought to be machinery for production of commodities in order to get the concessions under the aforesaid Notification. It was pointed out by the lower authority, in his order, that the impugned machine was not to be used as a machinery for production of commodities and hence, the appellants were not eligible for the concessions under the aforesaid notification. It was, however, mentioned by the lower authority in his order that the importer had submitted a letter dated 21-11-1995 in which they requested for assessment of the item under sub-heading 8428.39 read with Customs Notification 49/95. On perusal of the order of the lower authority, I find that he has not dwelt on the proposed revised classification of the goods under sub-heading 8428.39. He has merely stated that the declared classification of the goods under sub-heading 8479.89 was acceptable and since the condition prescribed in the Notification with reference to Heading 84.79 was not duly complied with, the appellant were not eligible for the concessions under the said Notification.

8. At the appeal stage, it is the case of the appellant that the goods were correctly classifiable under sub-heading 8428.39 as Sand Slinger which was nothing but a sand conveyor and all conveyors are covered by Heading 84.28. In support, the appellant have produced the technical drawing showing that the sand is conveyed. According to the technical write-up produced by the appellant, Sand Slinger is used for Foundry for transportation of virgin sand and processed sand for overhead bunder and mullers to various work centres where moulding machines are installed. Instead of carrying the sand manually by workmen, the equipment is used and it replaces 10 workmen per shift. According to the write-up, the impugned machine is a mobile Sand Slinger and hence, it can cover the entire moulding area and deliver processed sand much faster. The equipment consists of mobile trolly on which a fixed column and a rotary arm on the top pivot is fixed. There are small motors in this equipment for driving the conveyors.

9. The appellants have also referred to the Dictionary meaning of the terms Sand Slinger. According to Anmol’s Dictionary of Mechanical Engineering by S.B.Chopra, Sand Slinger means `a machine which is used for filling a mould with sand. It is delivered in wads at high speed by centrifugal force’. According to McGraw-Hill Dictionary of Science and Technical Terms, Sand Slinger means `a machine which delivers sand to and fills mould at high speed by centrifugal force’.

10. There is no room for doubt that any machine that serves the purpose of conveying an object or substance is covered by Heading 84.28. According to explanatory notes in HSN at pages 1198 and 1199, conveyors are used for moving goods, usually in a horizontal direction, sometimes, over very long distances (in mines, quarries, etc.). They include conveyors operated by continuously moving, carrying or pushing elements (e.g.) bucket, tray or pan type conveyors. Conveyors consisting of a train of motor-driven rollers, vibrator or shaker conveyors, pneumatic conveyors, roller supports similar to roller conveyors and cable operated moulding .and towing machines. It is the case of the appellant that the impugned conveyor is a bucket type conveyor. The Notification under reference covers all goods falling under Heading 84/95 without any pre-condition. Hence, it is submitted that the impugned Sand Slinger was eligible for the concessions under the aforesaid Notification.

11. I find that the lower authority has not addressed the issue of alternative classification of the impugned machine under sub-heading 8428.39. Since the appellant sought a revised classification of the impugned machine under Heading 84.28, the lower authority ought to have passed a speaking order as to why the said revised classification was not acceptable.

12. From the technical write-up and the drawing of the impugned Sand Slinger, it would appear that the same was nothing but a conveyor conveying sand from one end to the other end as a feeder for the sand mould. Thus, the impugned Sand Slinger fits into the definition of conveyor and hence, classifiable under heading 84.28. As Sand Slinger in question was not a pneumatic conveyor, the same should be classifiable under 8428.39. As the Customs Notification 49/95 does not stipulate any pre-condition for the goods falling under Heading 84.28, there is no reason why the appellant should not be eligible for the concessions under the aforesaid Notification.

13. I find that alongwith the Sand Slinger, the appellant imported some spare parts as per invoice and the Bill of Entry declaration. The spare parts of conveyors were classifiable under Heading 84.31, to be more precise, under sub-heading 8431.39. It is seen that the spare parts were not separately declared by the appellant in the Bill of Entry. The invoice also does not separately mention the spare parts indicating its value. It would, therefore, be reasonable to hold that the spare parts under Accessories (Conditions) Rules, 1962, when imported along with the main article, shall be chargeable at the same rate of duty as that article if the proper officer is satisfied that in the ordinary course of trade, such spare parts are compulsorily supplied alongwith that article and no charge has been made for such supply, their price being included in the price of the article. From the facts of the case, it would appear that the price of the main machine has included the price of the spare parts in the invoice. Therefore, in all likelihood, the spare parts were compulsorily supplied alongwith Sand Slinger. I am, therefore, of the view that the spare parts also, alongwith Sand Slinger, shall be classifiable under sub-heading 8428.39 read with Customs Notification 49/95. Even if it is held that spare parts were separately classifiable under sub-heading 8431.39, then also, such spare parts were eligble for concessions under Customs Notification 49/95. Thus, either way, the spare parts were also eligible for the concessions under the aforesaid Notification. In view of the above reasons, I am inclined to allow the appeal.

ORDER

14. For the reasons stated above, the Order-in-Original is set aside and the appeal is allowed. However, the refund to the appellant shall be subject to the refund procedure as envisaged in Section 27 of the Customs Act, 1962 as the appellant have not yet filed any refund claim.

Equivalent 1996 (085) ELT 0205 (Commr. Appl.)