2004 (11) TMI 372 - AT - Central Excise

Summary

Issues: Classification of Moisture Testing Machines under Chapter Heading 8437.00 or 9031.00 of the CETA

Classification under Chapter Heading 8437.00:
The issue in this appeal pertains to the classification of Moisture Testing Machines under Chapter Heading 8437.00 of the Central Excise Tariff Act (CETA) for nil rate of duty as contended by the appellants, who are engaged in manufacturing these machines. The appellants argue that these machines, used for testing moisture contents of food grains, should be classified under Chapter Heading 8437.00, which covers machinery used in the milling industry. The appellants rely on the Harmonized System of Nomenclature (HSN) explanatory notes to support their classification.

Classification under Chapter Heading 9031.00:
The Revenue, on the other hand, advocates for the classification of the Moisture Testing Machines under Heading 9031.00 of the CETA. The Commissioner (Appeals) accepted Revenue's classification, reversing the adjudicating authority's decision in favor of the appellants. The Revenue argues that these machines, used solely for determining moisture contents in grains and seeds, qualify as checking/measuring instruments falling under Chapter Heading 9031.00 of the CETA.

Analysis:
The Appellate Tribunal analyzed the contentions of both sides and reviewed the relevant provisions under Chapter Heading 8437.00 and 9031.00 of the CETA along with the HSN Explanatory notes. The Tribunal noted that the Moisture Testing Machines in question are specifically used for determining moisture contents in grains and seeds like wheat, paddy, and pulses, rather than for cleaning, sorting, or grading purposes. The machines are utilized by various agencies for moisture testing, including non-milling entities like FCI, MARKFED, and government agencies, as evidenced by certificates provided.

The Tribunal emphasized that the primary function of these machines is to ascertain moisture contents in grains/seeds, aligning them more closely with the characteristics of checking/measuring instruments listed under Chapter Heading 9031.00 of the CETA. Despite the argument that Chapter Heading 8437.00 should prevail due to its specificity, the Tribunal concluded that the Moisture Testing Machines do not fit within the scope of Chapter Heading 8437.00 based on the evidence presented. Therefore, the Tribunal upheld the classification under Chapter Heading 9031.00 for the Moisture Testing Machines, dismissing the appeal of the appellants as lacking merit.

In summary, the judgment resolves the issue of classification by determining that the Moisture Testing Machines are appropriately classified under Chapter Heading 9031.00 of the CETA as checking/measuring instruments, based on their specific function of determining moisture contents in grains/seeds and the evidence of their usage provided by various agencies.