2003(06)LCX0002

IN THE CESTAT, NORTHERN BENCH, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and P.S. Bajaj, Member (J)

COMMISSIONER OF CUSTOMS, NEW DELHI

Versus

BHAWANI ROLLER FLOUR MILLS

Final Order No. 395/2003-NB(B), dated 3-6-2003 in Appeal No. C/567/2002-B

REPRESENTED BY :      Shri Vikas Kumar, SDR, for the Appellant.

Shri J.M. Sharma, Consultant, for the Respondent.

[Order per : P.S. Bajaj, Member (J)]. - In this appeal which has been preferred by the Revenue against the impugned order-in-appeal dated 17-7-2002 passed by the Commissioner (Appeals), the issue relates to the classification of Automatic Moisture Unit NC4. The Commissioner (Appeals) had classified this item under Chapter Heading 8437.90 as sought by the respondents, as against the Chapter Heading 8479.89 as claimed by the Revenue and accepted by the adjudicating authority.

2. The Revenue in the grounds of appeal has contested the correctness of the classification of the goods in question referred above by the Commissioner (Appeals) on the ground that these do not form essential part of any machine/equipment/apparatus and had been imported for fitment in the existing system as a consequence of technology upgradation and performs independent function of moisture control.

3. The learned SDR has reiterated these grounds in his argument before us. On the other hand, the learned Counsel for the respondents had reiterated the correctness of the impugned order-in-appeal.

4. We have heard both sides and gone through the record. Admittedly, the respondents are having a flour mill producing wheat products viz. Atta, Maida, Suji and the manufacturing process requires moisture control unit as an essential part of milling plant. The disputed goods (automatic moisture unit) had been imported by them for using the same in the milling plant and its main function is to do proper dampening of the grains for processing. The perusal of the Bill of Entry and material submitted by the respondents during the course of adjudication, shows that the imported automatic moisture unit NC4 had been exclusively designed and manufactured for the use in the flour milling industry for dampening the wheat automatically by controlling the addition of the correct amount of water to ensure uniform moisture levels in grains and final products. This stand of the respondents before the adjudicating authority was not even disputed or doubted by the Revenue.

5. We also find from the reading of Chapter Note 2(b) of Chapter 84 that automatic moisture unit NC4 is classifiable under sub-heading 84.37. This fact also so stands corroborated from the explanatory notes to the HSN on this Chapter 84. From the reading of the said explanatory notes, it is quite evident that the grain dampening machines are classifiable under Heading 84.37 which covers the machinery used in the milling  industry.  Even the Customs authorities had classified these very goods when imported by other owners of the flour mills under this very heading on various occasions as is evident from the perusal of the impugned order-in-appeal. This fact has not even denied by the Revenue in the grounds of appeal. No cause has been shown by the Revenue as to why the case of the respondents for classification of the same product has been sought to be distinguished and separated from that of others who imported the same machinery and in whose cases, the classification was done under Heading 84.37.

6. The plea of the Revenue that the imported automatic moisture control unit performs individual functions and did not form essential part of any machine and that in terms of Section Note 4 to Section XVI HSN Notes relating to Chapter Heading 84.79 is classifiable under sub-heading 8479.89, had been rightly not accepted by the Commissioner (Appeals) in the light of the facts and circumstances detailed above and the Chapter Note 2(b) of Chapter 84 and the HSN Explanatory Notes of that Chapter as the imported machine in question essentially forms part of the machinery used in milling industry and had been designed only for exclusive use in that industry. Therefore, in our view, classification of this machine under Heading 84.37 had been rightly made by the Commissioner (Appeals). The impugned order passed by him is perfectly valid and does not suffer from any legal infirmity so as to call for any interference.

7. Consequently, the appeal of the Revenue fails being without merit.

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Equivalent 2003 (156) ELT 0133 (Tri. - Del.)