ALPSCO GRAINTECH PVT. LTD. Versus Commissioner of Central Excise & Service Tax, Chandigarh-II>2014(12)LCX0125

2014(12)LCX0125

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI [COURT NO. Ill]

S/Shri Rakesh Kumar, Member (T) and S.K. Mohanty, Member (J)

ALPSCO GRAINTECH PVT. LTD.

Versus

Commissioner of Central Excise & Service Tax, Chandigarh-II

Stay Order Nos. S/55112-55113/2014-EX(DB), dated 29-12-2014 in Application Nos. E/Stay/52336-52337/2014 in Appeal Nos. E/51860-51861/2014-EX(DB

Advocated By -

Shri B.E. Narsimhan, Advocate, for the Appellant.
Shri Pramod Kr. Jain, DR,for the Respondent.

[Order per : Rakesh Kumar, Member (T) (for the Bench)]. -

The appellant are manufacturer of Rice Milling Machinery and parts thereof like "Rice Bucket Elevator (grain discharger), rice conveyor (grain feeder), paddy cleaner, paddy husker, paddy separator etc. The dispute in this case is about "rice bucket elevator" and "rice conveyor". While the appellant were classifying these goods under heading 8437 as "machinery used in Milling Industry" where the tariff rate is nil, according to the department these goods are classifiable under heading 8428, as "other lifting, handling, loading or unloading machinery (for example Lifts, escalators, conveyors, Teleferice)". On this basis, by the impugned order, the Commissioner, classifying the goods, in question, under heading 8428 has confirmed the duty demand of Rs. 4,95,16,617/- against the appellant company along with interest thereon under Section 11AB and beside this, imposed penalty of equal amount on them under Section 11 AC and penalty of Rs. One Crore on Shri Nirdosh Bali, Managing Director of the appellant company. Against this order of the Commissioner, these two appeals have been filed along with stay application.

2. Heard both the sides in respect of stay application.

3. Shri B.L. Narsimhan, Advocate, the Id. Counsel for the appellant, pointing out to Commissioner's findings in para 4.2 of the impugned order pleaded that in terms of Commissioner's own findings, the goods, in question, are the conveyors and elevators which are used for transportation of rice in a rice mill from one stage to another and they can be horizontal as well as vertical as per the requirement of the industry, that when the goods, in question, are meant for rice mill industry, the same would be more specifically covered by heading 8437, as this heading covers the "machinery used in the milling industry or for working of cereals or dried leguminous vegetables, other than from type machinery", that St. Lango Institute of Engineering and Technology vide its report has also opined that the grain discharger and grain feeders manufactured by the appellant company are specifically designed for handling and processing of foodgrains, that same machinery is also imported by other importers at different ports and as informed by the customs authority in response to the appellant's application under RTI Act, 2005, these machineries are being classified under heading 8437, that the Commissioner's finding that the machines, in question, can be utilized to transport not only rice but anything else is factually incorrect, as the St. Lango Institute of Engineering and Technology has specifically opined that these machines are only meant for rice milling industry, that College of Engineering, Pune vide its letter dated 22-3-2013 in respect of similar goods being manufactured by M/s. Eminence Equipment Pvt Ltd., Pune has also opined that grain discharger and grain feeder are meant for handling foodgrains, and that they are not suitable to handling material like cement, lime, coal, sand, etc., and that in view of the above, the impugned order classifying the goods, in question, under heading 8428 and confirming duty demand and imposing penalty is not correct, that the appellants have strong prima facie case in their favour and hence the requirement of pre-deposit of the duty demand, interest and penalty may be waived for hearing of the appeal and recovery thereof may be stayed.

4. Sh. Pramod Kumar, Id. Jt. CDR opposed the stay applications by reiterating the findings of the Commissioner in the impugned order. Shri Pramod Kumar also pointed out to para 15 of the show cause notice according to which from the description of the equipment and its function it is clear that grain feeders and grain dischargers are not designed to be permanently attached either to each other or to a common housing, etc., of a milling machine and they are not manufactured as part of composite milling machine, and thus both these items would be correctly classifiable under heading 8428 of the tariff. He, therefore, pleaded that the goods are correctly classifiable under heading 8428 and as such the appellant have not been able to establish a prima facie case in their favour to merit waiver from the requirement of pre-deposit.

5. We have considered the submissions from both the sides and perused the records. The Commissioner in para 4.2 of the impugned order has given a finding that the goods, in question, are basically conveyors and elevators which are used for transportation of rice in a rice mill from one stage to another, and that the same are integral part of the machinery to achieve the desired production in a particular time frame. However, having given this finding, the Commissioner has gone on to say that these items are not essential part of the machinery in absence of which the whole machinery would come to standsHll and that the same can be utilized to transport not only rice but anything else also. However, it is seen that the appellant have produced opinion from technical experts - College of Engineering, Pune and St. Lango Institute of Engineering and Technology wherein it has been opined that these machines are specially designed for handling and processing of foodgrains and that as per the characteristics of the raw material used, component and fabrication techniques used for manufacture of grain dischargers and grain feeders, these are not fit for handling heavy and abrasive type material like sand, coal, lime, etc. It is also seen that same machinery when imported into India are being classifiable by different Customs Houses as milling machinery under heading 8437. In view of this we are of the prima facie view that the goods, in question, are correctly classifiable as milling machinery under heading 8437 and as such the impugned order is not correct and the appellant have strong prima facie case in their favour. The requirement of pre-deposit of duty demand, interest and penalty by both the appellants is, therefore, waived for hearing of their appeals and recovery thereof is stayed. The stay applications are allowed.

(Dictated and pronounced in open Court)

Equivalent 2015 (319) ELT 0107 (Tri. - Del.)