2016(06)LCX0141
IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI
S/Shri D.N. Panda, Member (J) and B. Ravichandran, Member (T)
Commissioner of Customs, Chennai
Versus
NIRMALA AGENCIES
Final Order Nos. 41007-41008/2016, dated 10-6-2016 in Appeal Nos. C/42057-42058/2015-DB and Cross Objection Nos. C/Cross/40044-40045/2016
Cases Quoted -
Collector v. Kohinoor Rubber Mills L993 (067) ELT 0816 (Tribunal) - Folloioed [Paras 3, 10]
Kohinoor Rubber Mills v. Collector [997 (092) ELT 0036 (S.C.) - Followed [Paras 3, 5, 7, 8, 9, 10]
ModiCBC Ltd. V. Collector - 1998(099) ELT 0161 (Tribunal) - Distinguished [Paras 7, 10]
Departmental Clarification Quoted-
& C. Clarification dated 11-1-1990 [Para 11]
Advocated By -
Shri K. Veerabhadra Reddy, jC (AR), for the Appellant. Shri Dominic, Advocate, for the Respondent.
[Order per : D.N. Panda, Member (J)]. -
In these appeals the goods imported are "Rice Milling Rubber Roller and Paddy Dehsuking Rubber Roller" under two different Bills of Entry in September and October, 2013. While Revenue says that the goods shall be classified under the CTH 40169990, assessee's claim is that the goods shall fall under CTH 8437 90 20. While Id. Adjudicating authority held that the goods imported falls under CTH 4016 99 90, Commissioner (Appeals) held that the same shall fall under CTH 8437 90 20.
2. To appreciate the class of goods covered by these tariff entry those are reproduced as follows :-
4016 Other articles of vulcanised rubber other than hard
rubber.
4016 10 00 - of cellularrubber
4016 99 Other
4016 99 10 -- Rubber cots for textile industry
4016 99 20 - Rubber bands
4016 99 30 - Rubber threads
4016 99 40 - Rubber blankets
4016 99 50 - Rubber cushions
4016 99 60 - Rubber bushes
4016 99 70 - Ear plug
4016 99 80 - Stoppers
4016 99 90 - -- Others
In order to appreciate the class of goods covered by the Tariff Entry 8437 90 20 that is reproduced as under :-
8437 Machines for cleaning, sorting or grading seed, grain or
dried leguminous vegetables; Machinery used in the milling industry or for the working of cereals or dried leguminous vegetables, other than farm-type machinery.
8437 90 - Parts;
8437 90 10 - Of flour mill machinery
8437 90 20 - Of rice mill machinery
8437 90 90 - Other.
2. Relevant to classification is the section notes of the Tariff. Note 1(a) of Section XVI of the Tariff states :
"1. This Section does not cover :
(a) Transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (heading 4010); or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016);"
3. The above issue in a different shape was before the Tribunal earlier where classification was in dispute within Chapter 40 in Kohinoor Rubber Mills -1992(12)LCX0050 Eq 1993 (067) ELT 0816 (Tribunal). This was affirmed by Hon'ble Supreme Court in 1997(02)LCX0056 Eq 1997 (092) ELT 0036 (S.C).
4. On the aforesaid background assessee's contention is that the Excise Notification No. 12/12-C.E., dated 17-3-2012, granted exemption from Additional duty of customs to the goods imported by the appellant since that falls under Chapter 84 and the goods imported shall most particularly fall under CTH 8437 90 20 as machinery parts of rice mill.
5. Revenue on the other hand says that the Id. Commissioner (Appeals) committed error ignoring the ratio of the Apex Court judgment in the case of Kohinoor Rubber Mills (supra) which was decided taken into account of the implications of Chapter 40 and Chapter 84 along with Section note 1(a) of Section XVI. Therefore, when Apex Court has decided the issue of classification of same goods in Kohinoor Rubber Mills (supra), there cannot be any difference to the ratio laid down therein in the pretext of any other plea today.
6. Heard both sides and perused the records.
7. It may be noted that soon after the Hon'ble Supreme Court judgment in the case of Kohinoor Rubber Mills v. CCE, Chandigarh -1997(02)LCX0056 Eq 1997 (092) ELT 0036 (S.C), holding against the appellant that the goods imported shall fall under Chapter 40, there is judgment of the Tribunal in the case of Modi GBC Ltd. v. CCE, New Delhi -1997(11)LCX0067 Eq 1998 (099) ELT 0161 (Tribunal) holding that the rubber rollers shall fall under Chapter sub-heading No. 8479 90 without considering the Apex Court judgment above.
8. The peculiar character of the goods was recognised by the Hon'ble Supreme Court while determining classification thereof under CTH 4016 99 90. This may be appreciated from Para 5 of the judgment which reads as under :-
"5. What is of assistance for the purpose of arriving at the correct classification of rice rubber rolls is a Circular dated 11-1-1990 issued upon the basis of a consensus arrived at a conference of Collectors of Central Excise. The consensus was that, ordinarily, rice rubber rolls would have been classified under Chapter 84. Chapter 84, however, fell within Section XVI of the Tariff and Section Note 1(a) stated that Section XVI did not cover articles of the kind used in machinery or unhardened vulcanised rubber (Item 40.16). Accordingly, rice rubber rolls were found to be correctly classifiable under Heading 40.16. This view was strengthened by the Explanatory Note at Serial No. 9 under Item 40.16 of the Harmonized Commodity description and Coding System (HSN), upon which the present excise tariff is based. That Explanatory Note states that Heading 40.16 includes "other articles for technical uses including parts and accessories of machines and appliances" falling under, amongst others, Section XVI.
9. The contention of the respondent is that the exemption notification dated 17-3-2012 shall not decide the liability. Such plea has no force for the reason that the notification could see the light of the day after the Apex Court's judgment in Kohinoor Rubber Mills (supra) delivered on 20-2-1997. Law having been settled as early as 20-2-1997, legislative intention was conveyed by the Notification. Therefore there shall be no basis to argue that the exemption notification has fastened liability.
10. So far as the submission that the decision of Tribunal in Modi GBC Ltd. (supra) supports the contention of the respondent, that fails to survive for the reason that there were different facts involved in that case and the decision of the Tribunal was sub silentio. Tribunal while deciding the issue has not taken into consideration the Apex Court's judgment in Kohinoor Rubber case (supra). The goods involved in Modi GBC Ltd., (supra) was "Rubber rollers". But the goods imported were meant for the rice mill. Such goods by its nature, usage and composition differs from the rubber rollers. Therefore, the Tribunal's decision shall not come to the rescue of the assessee.
11. A perusal of the impugned order by the Id. Commissioner (Appeals) shows that he held that the exclusion made as per the section Note 1(a) of Section XVI (supra) is not applicable to the impugned goods. The reason given is that CTH 4016 itself is a residuary heading for articles of vulcanised rubber. Applying principle of 'ejusdem generis' he held that the product will not fall under the said sub-heading. We find that the exclusion made by the abovesaid note is
' Other articles of a kind used in machinery or mechanical or electrical
appliances or for other technical uses, of vulcanised rubber (Heading
4016)'. The impugned goods fall under this category by their nature and function. Hence, the exclusion shall operate. The distinction sought to be made by Id. Commissioner (Appeals) against the application of Board's clarification dated 11-1-1990 is also not sustainable. The switchover to 8 digit classification has no direct impact in applying the section notes.
12. For the aforesaid reasoning, Revenue appeals are allowed.
13. In view of disposal of both the appeals of Revenue as above, both the cross-objections are disposed.
(Dictated and pronounced in open Court)
Equivalent 2016 (340) ELT 0732 (Tri. - Chennai)