2004(02)LCX0010
IN THE CESTAT, SOUTH ZONAL BENCH, BANGALORE
S/Shri G.A. Brahma Deva, Member (J) and K.C. Mamgain, Member (T)
M.T.R. FOODS LTD.
Versus
COMMISSIONER OF CUSTOMS, BANGALORE
Final Order No. 352/2004, dated 13-2-2004 in Appeal No. C/156/2000
Cases Quoted
Commissioner v. Fluid Therm. Technology Pvt. Ltd. — 2002 (053) RLT 0582 (Tribunal) — Relied on [Paras 4, 6]
Milk Food Ltd. v. Commissioner — 1994(03)LCX0032 Eq 1994 (071) ELT 0549 (Tribunal) — Relied on......... [Paras 4, 6]
Advocated By : Shri M.S. Srinivasa, Advocate, for the Appellant.
Shri M.K. Madhyastha, JDR, for the Respondent.
[Order per : K.C. Mamgain, Member (T)]. - This is an appeal filed by M/s. M.T.R. Foods Ltd. against the Order-in-Appeal No. 98/99, dated 28-9-99 passed by the Commissioner of Customs (Appeals), Bangalore.
2. Shri M.S. Srinivasa, Advocate appeared for the appellants and Shri M.K. Madhyastha, ld. JDR appeared for the Revenue.
3. The appellants have imported an automatic continuous line for production of shortcut pasta having a capacity equal to 700 Kgs. per hour with accessories from Italy and cleared the said machinery under Bill of Entry No. 00913, dated 15-5-97 through ICD, Bangalore. The Bill of Entry was assessed provisionally and the importer cleared the machinery on payment of duty. When the Bill of Entry was taken up for final assessment, the information regarding the list of accessories and their corresponding value were not furnished by the importer inspite of letter issued to him. Therefore, show cause notice was issued for collecting duty on excess accessories and differential duty on electric control panel imported by them under the subject Bill of Entry by classifying the same under Heading 8537.90 of the Customs Tariff Act. The case was adjudicated and the electric control panel was assessed under sub-heading No. 8537.10 of Customs Tariff Act as per Note 2(a) to Section XVI of Customs Tariff Act, 1975.
4. It was argued before us that the electric control panel has been singled out by classifying it separately under sub-heading 8537.10 although it is a part and parcel of the continuous production line and it should be treated in the same manner as other constituents of production line in terms of Section Note 3 of Section XVI. When a machinery as a whole is imported, whether it is in an assembled condition or dismantled condition, each part of it cannot be separately treated for the purpose of classification and all the constituents of the machine have to be treated as whole attracting one single classification applicable to the machine. In the present case, one single production line was imported and electric control board is a constituent/component of it like other constituents/components. Shri Srinivasa relied on the Tribunal’s decision in the case of Milk Food Ltd. v. CC, New Delhi reported in 1994 (071) ELT 549. In that case also the appellant imported different machines like conveyor system, freezing tunnel, coating and hardening tunnel, etc., in two consignments and claimed different classification in respect of different machines, the Hon’ble Tribunal, however, held that what was imported in two consignments under two separate Bills of Entry is a single system working in synchronization with each other. Therefore what was imported was an integrated plant/machinery designed and used for the purpose of manufacture of final product and therefore, they cannot be bifurcated for the purpose of assessment. Note 2(a) of Section XVI is not applicable in the instant case. As per Section Note 5, electric control board is covered by the term “machine”. He also relied on the decision of the Tribunal in the case of CCE, Chennai v. Fluid Therm. Technology Pvt. Ltd. reported in 2002 (053) RLT 582 wherein it was held that -
“5. On a careful consideration of the submission we notice that the Commissioner (Appeals) in the impugned order has noticed the function of control panels, which have been designed specifically and are dedicated to the furnace in order to make it a single unit and that the furnace cannot be put to effective use without the particular control panel meant for it. He has noticed that the furnace and control panels are always presented together for assessment. He has applied the provisions of Note 4 to Section XVI Note(2) (b) to Section XVI, and also explanatory note at page 1132 and has held that control panels are designed specifically and dedicated to the furnace and requires to be classified along with integral furnace. We notice that the ratio of the citations referred to also lays down the same ruling that when a part is utilized along with main equipment and cleared along with it then has to be classified along with the main equipment. In view of the findings given by the Commissioner (Appeals) which are legal and proper and in terms of the citations given above we do not find any merit in all these 3 appeals filed by the Revenue and hence all the 3 appeals are rejected.”
5. Shri M.K. Madhyastha pleaded that in view of Section Note 2(a) of Section XVI, Boards Panel Cell and other parts of electric control board for distribution of electricity had to be classified under Heading 85.37, even though these are especially designed to work as a part of a specific machine.
6. We have carefully considered the submissions made by both sides. We find that it has been accepted by the Commissioner (Appeals) that control board is specifically tailor-made to control the operation of the main machine which is designed to manufacture shortcut pasta product. Control board is customary for the said machine and has to be invariably used only with the said machine. The control board regulates and controls the very essential operations and parameters such as temperature and humidity and it should be regarded as designed for use solely and exclusively with the automatic continuous line for production of shortcut pasta. However, the Commissioner (Appeals) classified it under Heading 85.37 on the ground that there is a separate heading which covers specifically boards, panels, desks and cabinets, etc. However, we find that the principle laid down by the Tribunal in the case of Milk Food Ltd. v. CCE, Delhi [1994 (071) ELT 549] that entire machinery imported utilised as a single unit for manufacture of final product to be considered as part and parcel of the main production forming machinery and also in case of CCE, Chennai v. Fluid Therm Technology Pvt. Ltd. [2002 (053) RLT 582], that control panel cleared along with integral furnace designed specifically and dedicated to furnace which cannot be put into effective use without the particular control panel meant for it, to be classified along with integral furnace, is the correct principle. The control panel in this case has to be classified along with the main machine for which it is a part and parcel. The main machine which has been imported is automatic continuous line for production of shortcut pasta classifiable under Heading 8438.10 of the Customs Tariff Act. The control panel should be classified with it.
7. We, therefore, set aside the order of the Commissioner (Appeals) and allow the appeal of the appellants.
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Equivalent 2004 (168) ELT 384 (Tri. - Bang.)