2007 (3) TMI 106 - AT - Central Excise

Classification - Department contended that the respondents manufacture branded biris are not covered under SH 2404.31 on the ground that it is packed with the aid of machine - Held that the department contention is not correct and it classifiable under SH 2404.31

Summary

Issues: Classification dispute regarding manufacturing process involving the use of machines.

In this judgment by the Appellate Tribunal CESTAT, KOLKATA, the matter was initially listed before a single member Bench but was transferred to a Division Bench due to the recurring nature of the classification dispute. The respondents manufacture branded Biris, and various processes are involved, with only the packing of the Biris being done with the aid of a machine. The lower appellate authority had classified the goods under sub-heading No. 2404.31, noting that the packing alone was done with the aid of a machine, not the manufacture of the Biris. The respondents argued that this process should not be considered manufacturing with a machine, citing various legal precedents to support their claim. Additionally, a Board's Circular was referenced to clarify the classification criteria for such goods. The Tribunal analyzed the relevant Chapter Note 2 to Chapter 24, which required specific processes to bring the product under certain classifications. It was noted that in this case, there was no repacking from bulk packs to retail packs using a machine, as the machine was only used for packing the bundles in pre-printed plastic wrappers. The Tribunal also addressed the issue of credit availed on the machine, which had been reversed, making the Revenue's objection invalid. Ultimately, the Tribunal found that the Biris were not manufactured with the aid of a machine and upheld the classification under sub-heading 2404.31, as determined by the lower appellate authority, thereby rejecting the appeal filed by the Department. The judgment was dictated and pronounced in open court.