Exide Industries Ltd. Versus Commissioner of Customs, Mumbai>2008(08)LCX0118

2008(08)LCX0118

In the Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Shri M.V. Ravindran, Member (Judicial) Shri K.K. Agarwal, Member (Technical)

Exide Industries Ltd.

Versus

Commissioner of Customs, Mumbai

Final order No. A/512/WZB/2008-CII/CSTB dt. 18.8.2008 certified on 18.9.2008 in Appeal No. C/1294/2002

Cases Quoted -

Panacea Biotec Ltd. vs. CC, Delhi 2005 (066) RLT 0487 (CESTAT-Del.) - Relied on [Paras 3,7]

Advocated By -

Shri T. Viswanathan, Adv. for Appellant Dr. T. Tiju, JDR for Respondent

Per M.V. Ravindran:

This appeal is directed against Order-in-Appeal No. 349/2002-MCH dated 28.6.2002 by which the learned Commissioner (Appeals) has upheld the order of confiscation of the machinery imported by the appellant under chapter heading 84.79 but denied the exemption of Notification No. 17/2001-Cus. dated 01.03.2001.

2. The facts that arise for consideration are that the appellant imported the machinery "Automatic Wrap and Stacking Machine". The appellant filed Bills of Entry classifying the same under sub-heading 8422.40 of the Customs Tariff as wrapping machine. The adjudicating authority denied the said classification and classified the same under Chapter Heading 84.79, wherein, the appellant claimed benefit under Notification No. 17/2001, which was denied. On an appeal, the Commissioner (Appeals) rejected the appeal and upheld the Order-in-Original. While coming to the conclusion, the Commissioner (Appeals) recorded the following findings:-

"In this case - Commodity' to be manufactured is "Maintenance-free batteries" and the impugned machine manufactures only an intermittent product and as such shall not be eligible for benefits of Notification 17/ 2001-Cus. dated 01.03.2001 claimed by the appellants under the definition "Machinery for production of commodities". As held by the Hon'ble CEGAT in the case of M/s. Tamilnadu State & Fibre Manufacturing & Co-op. Federation, Chennai (Order No. 2764/1995 also relied upon by the appellants), only the machine producing marketable commodity shall be entitled to benefit of exemption. In another case, which is also relied upon by the appellants, i.e. the case of Dura Foam Industries (P) Ltd., the Hon'ble Tribunal has held that cutting of foam blocks by "foam cutting machine' leads to the production of different foam products, which are marketable. The impugned goods therefore, shall not be eligible for exemption notification claimed by the appellants. I, therefore, find no merits in the appeal to interfere with the impugned order which is legal and proper."

3. Learned counsel appearing on behalf of the appellant draws our attention to the chapter heading 8422 and 8479. It is his submission that for the time being they are accepting the classification but claimed the benefit of Notification No. 17/2001. He draws our attention to serial number 235 of Notification 17/2001. He submits that the very same issue under the said notification was before the Division Bench of the Tribunal in the case of Panacea Biotec Ltd. Vs. CC, Delhi as reported at 2005 (66) RLT487 (CESTAT-Del.)=2004(05)LCX0047 Eq 2004 (170) ELT 0021 (Tri.-Del.), and is in favour of the appellant.

4. The learned JDR on the other hand submits that the machinery in question does not produce any commodity, which is marketable. It is his submission that the products, which are manufactured by the machine are only intermediate goods and are not marketable. He reiterates the findings of both the lower authorities.

5. Since the appellant has accepted the classification of the said machinery under Chapter Heading 84.79, we do not want to go into the question of classification of the said machinery under Heading 84.22. The next question that arises is whether the applicant is eligible for the benefit of reduced rate of duty, as per Sr. No. 235 of Notification 17/2001-Cus., or not.

6. In order to appreciate the eligibility, the said entry Sr. No. 235 is reproduced, which is as under:-

"235. 8479.50 Machinery for production of commodities 25%"
or
8479.89

It can be seen from the above reproduced portion that the machinery, which is used for production of commodities, the duty would be levied @ 25%.

7. We find that the claim of the Revenue is that the machine is used for wrapping of the positive and negative plate, which is further used in manufacture of battery, are not commodity. We find that this proposition would be incorrect, as the said positive and negative plates of battery are an intermediate product and they are commodity, as they can be used for replacement of the positive or negative plates, as the case may be. If that be so, the ratio of the decision of the Tribunal in the case of Panacea Biotec Ltd. (supra) squarely covers the issue in favour of the appellant. We may read the same:-

"We have heard both the sides and in our view the contention raised by the learned Counsel deserves to be accepted. From the record, we find that the appellants had imported machinery known as "Fermentor' from Germany. The dispute initially arose about the classification of the same, as the appellants sought classification under CTH 8419.89, while the Department wanted to classify the game under CTH 8479.89. The dispute was resolved ultimately by the Tribunal in an appeal filed by the appellants against the order of the adjudicating authority who refused to accept the classification as profounded by them, by holding the classification under sub-heading 8479.89 of the CT vide Final Order dated 8.11,2002. The Tribunal, however, remanded the matter to the adjudicating authority for considering, the eligibility of the machine Fermentor, to the benefit of Notification 16/2000-Cus. which provided duty at standard rate of 25% in respect of machinery for production of commodities falling under sub-heading 8479.50 or 8479.89. The adjudicating authority has denied the benefit of this Notification on the ground that the machine Fermentor imported by the appellants did not produce any commodity which could be bought and sold in the market as such as it produced vaccine in a crude form which required further purification and bottling for marketing purposes. But we are unable to subscribe to this view of the adjudicating authority. The bare perusal of the Notification reveals that it covers machinery for production of commodities classifiable under sub-heading 8479.50/8479.89. No such condition regarding the marketability of the commodities as such produced by such machinery, had been prescribed therein. Therefore, any machinery meant for production of commodities and classifiable under the above said sub-headings of the CTH, shall stand covered by this Notification. The machine Fermentor imported by the appellants is for the production of vaccine which is a commodity. Therefore, the fact that the vaccine produced by this machine is in crude form which requires purification and bottling for the purpose of marketing, is immaterial and cannot be made basis for disallowing the benefit of the above said Notification to the appellants for want of any such condition laid down therein to the appellants. Therefore, in our view, the benefit of the Notification has been wrongly denied to the appellants. The machine imported by them is meant for production of vaccine which itself is a commodity. Consequently, the impugned order cannot be sustained and is set aside."

8. Accordingly, we find that the issue is squarely covered in favour of the appellant. As such, the impugned order to the extent it denies the benefit of Notification No. 17/2001-Cus. to the goods imported is set aside and the appeal is disposed off accordingly.

Dictated and pronounced in Court.

Equivalent 2008 (089) RLT 0496 (CESTAT-Mum.)

Equivalent 2009 (233) ELT 0522 (Tri. - Mumbai)