2002(01)LCX0236
IN THE CEGAT, SOUTH ZONAL BENCH, CHENNAI
S/Shri S.L. Peeran, Member (J) and Jeet Ram Kait, Member (T)
COMMISSIONER OF CUS., CHENNAI
Versus
RANIPET LEATHER FINISHING (P) LTD.
Final Order No. 104/2002, dated 28-1-2002 in Appeal No. C/V-970/1997/Md.
Advocated By : Shri A. Jayachandran, DR, for the Appellant.
S/Shri M.S. Kumaraswamy and C.V. Srinivasamoorthy, Consultants, for the Respondent.
[Order per : S.L. Peeran, Member (J) (Oral)]. - This is a Revenue appeal against the Order-in-Appeal No. C. Cus. 1034/97, dated 16-9-97 by which the claims of the assessee for classification of the automatic spraying machine under Heading 8424 has been upheld by the Commissioner (Appeals) including grant of benefit of Notification 43/78-Cus. The findings given by the Commissioner in Para 2 onwards of his order are reproduced below :
The appellants state that the finding of the lower authority is not correct. Firstly, the invoice was presented for one set of Rotopress Auto Machine complete with conveyors, dryers and coolers. The goods have, therefore, to be assessed on the total value given for the complete machine. Fixing a value of Rs. 5 lakhs for conveyors, dryers and coolers is, therefore illegal.
Secondly, the Auto Spray Machine is used for painting leather. After it is painted, it has to be dried and cooled. These functions are carried out in separate chambers to which the leather pieces are conveyed by a set of conveyors. Since it is fully automatic machine, the conveyors, dryers and coolers are integrated part of the spraying line. It was, therefore, not correct on the part of the lower authority to treat them as separate machines.
Thirdly, the matter was examined by the Collectors’ conference in 1979 and it was clearly identified that the primary function of the automatic machine is that of spraying the leather and not drying and cooling and hence, the classification of the machine would be under Heading 8421 (new Heading 8424). The literature referred to by the lower authority does talk of the other accessories of the basic machine. However, these are optional to the spraying line, drying line and cooling line. They did not order all these accessories mentioned for the purpose of making the machine fully automatic.
Fourthly, similar goods were cleared in the Custom House and the benefit of notification extended to them. They referred to Bill of Entry No. 16158, dated 24-4-94 (copy submitted at the time of personal hearing).
I agree with the appellants that since the description of the goods and the literature produced clearly show that it is a single integral line for painting of leather, the entire machine would fall under Heading 8424 and benefit of Notification No. 43/78-Cus. would be available. In any case, there is no provision in Valuation Rules for fixing an ad hoc value for any part of the machine when the invoice has been submitted for the entire machine.
2. The Revenue has come in appeal on the ground that from the catalogue it is seen that the conveyors, dryers and coolers are only “optional accessories” and cannot be said to be compulsorily supplied along with the main machine. As regards the reasoning of the Commissioner (Appeals) it is stated that in the absence of the party furnishing break-up details, there was no way than to go for the ad hoc values and hence the assessee is not eligible for the benefit of the notification in question.
3. Heard Shri A. Jayachandran, learned DR and the learned Consultants of the party.
4. We have perused the impugned order and also seen the catalogue. We notice that the Commissioner has recorded a reasoned order and has clearly noted that the machine is a fully automatic one and hence the conveyors, dryers and coolers are integrated part of the spraying line. Therefore, he has held that the findings of lower authority to treat them as separate machines was not correct. Further the Commissioner (Appeals) has referred to the practice in the Customs House and the benefit of the notification has been extended in the past. He has given a categorical finding that since the description of the goods and the literature produced clearly show that it is a single integral line for painting of leather, the entire machine would fall under Heading 8424 and the benefit of the Notification 43/78 would be available. We do not find any infirmity in the impugned order and hence the impugned order is upheld by rejecting the Revenue appeal.
Equivalent 2002 (141) ELT 0670 (Tri. - Chennai)
Equivalent 2002 (050) RLT 0321