2003 (1) TMI 440 - AT - Customs

Summary

Issues: Classification of imported goods under sub-heading 8436.29 or 8415.83; Challenge to classification under 8415.83.

Classification under sub-heading 8436.29 or 8415.83:
The appeal concerns the classification of imported goods described as an "outback environment system for poultry shed in knock down condition." The appellants seek classification under sub-heading No. 8436.29, while the department classified the goods under sub-heading No. 8415.83. The Additional Commissioner upheld the classification under 8415.83, considering the unit as an air-conditioning machinery without a refrigerating unit. The dispute revolves around whether the unit falls under Chapter heading 8436.29, covering poultry-keeping machines, or Chapter 8415.83, encompassing air-conditioning machines. The Additional Commissioner reasoned that the imported unit, designed to regulate temperature and humidity in a closed space, aligns with the description of heading 8415, incorporating necessary elements like heaters, cooling units, fans, and controllers.

Challenge to classification under 8415.83:
The appellants challenge the classification under sub-heading 8415.83 on various grounds. They argue that heading 84.36 of the Customs Tariff Act specifically covers poultry-keeping machinery with mechanical or thermal equipment, which aligns with the imported machine's purpose. They contend that the primary function of the machine is not temperature or humidity maintenance, distinguishing it from an air-conditioning machine. The appellants assert that the machine lacks essential elements like an air heating device or cooling elements specified under heading 8415. They further argue that the machine operates as an Evaporative Cooling System, utilizing high-pressure water mist for cooling, which is distinct from air-conditioning. Additionally, they emphasize the importance of trade/commercial parlance and the specific classification of poultry-keeping machines under heading 84.36, which should prevail over heading 84.15. The appellants also cite precedents and legal principles to support their contention that the machine should be classified under heading 84.36, making the confiscation and penalties imposed unwarranted.

Conclusion:
After reviewing technical literature and the product description, the Tribunal upholds the classification under sub-heading 8415.83, in line with the Additional Commissioner's decision. The Tribunal acknowledges the machine's intended use for poultry-keeping and reduces the redemption fine from Rs. 1,50,000 to Rs. 10,000, considering the waiver of penalties by the Commissioner (Appeals). Ultimately, the appeal is dismissed, except for the modification in the quantum of redemption fine.