Consolidated Petrotech Industries Ltd. v. Collector — 1991(05)LCX0011 Eq 1992 (057) ELT 0081 (Tribunal)

— Relied on                                                                                                                                [Para 3]

Ravalgaon Sugar Farm Limited v. Collector — 1996(07)LCX0156 Eq 1997 (092) ELT 0500 (Tribunal)

— Relied on                                                                                                                                [Para 3]

Unipac v. Collector — 1987(07)LCX0072 Eq 1989 (042) ELT 0242 (Tribunal) — Relied on                                       [Para 3]

S.G. Glass works Pvt. Ltd. v. Collector — 1994(11)LCX0108 Eq 1994 (074) ELT 0775 (S.C.) — Relied on               [Para 3]

Advocated By : Shri J.N. Swamy, Advocate, for the Appellant.

Shri S. Sankara Vadivelu, JDR, for the Respondents.

[Order per : S.L. Peeran, Member (J)]. - This appeal arises from Order-in-Appeal No. 74/93, dated 26-5-1993 passed by Commissioner (Appeals), Bangalore holding that the appellants are not entitled to the benefit of Notification No. 390/86 in respect of imported item namely Coffee grinder. The Serial No. 8 of the Notification provided exemption to “Coffee roaster and grinder for Coffee curing machinery”. The Commissioner in the appeal has held that as the exemption applies specifically to coffee roaster and grinder, it implies that the concession is applicable to a unit which performs both these functions, whereas the subject goods imported is only Coffee Roaster.

2. We have heard both sides in the matter. After a detailed consideration, we are of the considered opinion that the reasoning adopted by the Learned Commissioner in the Order is not sustainable. The reason being that the Coffee Grinder imported by the appellants is undoubtedly for Coffee Curing Machinery. We notice from the Commissioner (Appeals) order that he has observed that the item in question has a weight of 15 Kg. Net and 20 Kg. Gross as seen form the Literature. He is of the opinion that the machinery is a domestic appliance and it cannot be considered for the purpose of industrial use as also the capacity to grind is only 500 gms. per minute. On this count he has held that the Classification claim by the appellants under Chapter Heading 8479.82 is required to be rejected and the Classification under Heading 8509.80 is required to be accepted as the item is only a domestic appliance. On examination of the rival entries, we notice that the Heading 85.09 refers to Electro-mechanism domestic appliances with self-contained electric motor and sub-heading 8509.80 refers to other appliances. We are of the considered opinion that the item in question is not a domestic appliance and the reason given by the Collector that the weight of the machine being only 15 Kg. net and 20 Kg. gross and that its grinding capacity is of 500 gms/minute is not sufficient to hold the item to be a domestic one. A machine of this capacity can be an industrial one as well and the literature does not disclose that it is defined for use only for domestic purposes. The appellants have also, produced as additional evidence a Certificate issued by Coffee Exporters Association to the effect that, `Coffee Roaster and Grinder are two separate machineries. Both of them have separate individual functions. The Grinder and Roaster are part and parcel of Coffee Curing machinery.’ The appellants have imported the machinery not for domestic use but for industrial use being in the business of Coffee curing. The same has been imported for commercial use and the fact that the machinery is capable of grinding coffee to an extend of 500 gms/minute would show that it can be used continuously. Such continuous use of the grinder to grind 500 gms/minute would be used only by an industrial user and not by a domestic person whose needs could be limited. Therefore the reasonings arrived at by the Commissioner to hold the item to fit into the category of domestic appliance rather than one used for industrial purpose is not based on any evidence or on commercial understanding or on basis of the literature. Therefore, we over-rule the Classification of the item under sub-heading 8509.80 adopted by the authorities. The other entry which is claimed is under sub-heading 8479.82. This Heading 8479.82 refers to machines and appliances having individual functions not specified or included elsewhere in this Chapter. Under this sub-heading 8479.82 clearly covers grinding machines amongst others. Hence the claim for classification under this sub-heading is justified.

3. The Commissioner has denied the benefit of the Notification No. 390/96-Cus., dated 29-7-1986, Sl. No. 8 of the Notification. The only reason given by the Commissioner for denying the benefit of the Notification is that for satisfying the Sl. No. 8 of the Notification, the item ought to be both “Coffee Roaster and Grinder”. The plea raised by the appellants that the word “and” should be read as “or” was rejected. On this point, it has been argued before us that in similar circumstances in the case of Consolidated Petrotech Industries Ltd. v. CCE as reported in 1992 (057) ELT 81 the word “and” appearing in Sl. No. 17 of the Notification No. 125/86-Cus., dated 17-1-1986 was discussed at great length. The description in Sl. No. 17 was “FFS with vacuumising and inert gas flushing”. The item imported therein was FFS with Inert gas flushing and the item did not have vacuumising facility. The authorities had denied the benefit on the ground that the item was not both vacuumising and inert gas flushing item. The Tribunal went into the aspect of interpreting the word “and” and ultimately after due consideration of all the judgments and the law on such proposition held that the word “and” ought to be interpreted as “or” in a disjunctive manner. It was noted that a simple perusal of Notification No. 125/86-Cus; Sl. No. 17 showed that the benefit is available to a machine FFS with vacuumising and inert gas flushing. It was noted that it is an admitted fact that the machine imported was supplied with the gas flushing system but had no vacuumising facility. It was observed that the said Notification was amended by Notification No. 65/89-Cus. dated 1-3-1989 allowing concessional rate of duty when FFS Machine is imported either with vacuumising accessory or inert gas flushing accessory or with both the accessories. It was held that the intention of Notification No. 125/86 could not be to deny the benefit of concessional rate of duty to FFS Machine when it is imported either with vacuumising accessory or with inert gas flushing accessory or with both. Therefore the Tribunal concluded that the word “and”, should be interpreted as “or” in a disjunctive manner. Likewise in the case of Ravalgaon Sugar Farm Limited v. CCE as reported in 1996(07)LCX0156 Eq 1997 (092) ELT 0500 (Tribunal) the same Sl. No. 17 of the Notification 125/86-Cus. came in for interpretation and the judgment of Consolidated Petrotech Industries Limited v. CCE was applied including that of Unipro v. Collector as reported in 1987(07)LCX0072 Eq 1989 (042) ELT 0242 (Tribunal). This principle of interpreting the word “and” as a disjunctive one and also “or” has been looked into by the Hon’ble Supreme Court in the case of S.G. Glass Works Private Ltd. v. CCE as reported in 1994(11)LCX0108 Eq 1994 (074) ELT 0775 (S.C.). In view of these judgments, we are of the considered opinion that the word “and” appearing in between the words “Coffee Roaster and Grinder” is required to be read disjunctively as “or” and on such interpretation being placed, the Coffee Grinder imported by the appellants for Coffee Curing Machinery would be entitled to the benefit of the notification.

4. In that view of the matter the impugned order is set aside and the appeals allowed with consequential relief, if any.

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Equivalent 1999 (111) ELT 108 (Tribunal)

Equivalent 1999 (032) RLT 0517