2001 (8) TMI 755 - AT - Central Excise

Summary

Issues:
Classification of machinery for duty assessment under CTH 8479.89 and Customs Notification 20/99.

Analysis:
The Revenue appealed against the Order-in-Appeal allowing the importer to classify a consignment of machinery under CTH 8479.89 with the benefit of Customs Notification 20/99. The Commissioner set aside the original assessment, stating each machine should be assessed independently based on individual functions. The Revenue argued that the machinery cannot be classified under CTH 8479 and does not qualify for the notification benefit as they do not work in conjunction for commodity production. They emphasized the importance of Section notes of Section XVI in proper classification, stating that the machines do not form a composite unit and should be classified under Heading 84 or 85 based on their functions. The Revenue contended that the machines' individual values were not specified, justifying the use of Section 19 of the Customs Act for duty determination.

The Revenue highlighted that the Commissioner relied on inconclusive evidence like a flow chart and write-up without proper technical support for classifying the machinery. They referenced a judgment to support invoking Section 19 for duty determination. In response, the importer's counsel argued that the machines worked together as composite machinery for commodity production, justifying classification under CTH 8479.89 and the notification benefit. They argued against the applicability of Section 19 and cited judgments where similar machinery was classified as composite for duty assessment.

The Tribunal observed discrepancies in the evidence presented by both parties. The flow chart and write-up lacked technical backing to prove the machinery worked as a composite unit for commodity production. The Commissioner did not seek expert opinion to verify the machinery's functioning as a composite unit, as required by Section Notes 3 to 5 of Section XVI. Due to insufficient evidence, the matter was remanded to the original authority for reevaluation. The importer was directed to provide expert opinion, and the machinery would be examined to determine if they functioned as a composite unit for commodity production. The Tribunal emphasized the necessity of verifying if all necessary machinery was imported for commodity production to qualify for the notification benefit. The Commissioner's order was set aside for not considering Section Notes 3 & 4 of Section XVI, and the matter was remanded for further assessment.

In conclusion, the judgment focused on the proper classification of machinery for duty assessment under CTH 8479.89 and Customs Notification 20/99. It highlighted the importance of expert opinion and technical evidence to determine if the machinery worked as a composite unit for commodity production, as required by relevant legal provisions.