2011 (8) TMI 270 - AT - Central Excise

classification - Moisture testing machine - keeping in view the functions of these machines which is to ascertain the moisture contents in the grains/seeds it can be safely and legally concluded that these are checking/measuring instruments falling under Chapter Heading 9031.00 of the CETA. The argument of the Counsel that this is a general Chapter Heading and as such the specific Heading 8437 of CETA has to prevail over it for classifying the machines in question cannot be accepted as the machines do not at all fall within the four corners of Chapter Heading 8437.

Summary

Issues: Classification of moisture testing machine under customs tariff - Nil rate of duty under Chapter heading 8437.00 vs. chargeable duty under Chapter heading 9031.00

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand revolves around the classification of a moisture testing machine manufactured by the appellants. The dispute arises from differing interpretations regarding the appropriate chapter heading under the customs tariff for this product. The appellants argue that the machine should be classified under chapter heading 8437.00, which is subject to a nil rate of duty. Conversely, the Department contends that the correct classification is under Chapter heading 9031.00, which would attract duty charges.

The Tribunal refers to a previous decision in Oriental Science Apparatus Workshop vs. C.C.E., Panchkula, where it was established that the moisture testing machines in question are specifically used for determining moisture contents in various agricultural products, such as wheat, paddy, grains, and pulses. These machines are not involved in the cleaning, sorting, or grading of the grains, as that process occurs separately. The Tribunal notes that entities like FCI, MARKFED, and HAFED, as well as government agencies like Karnataka Seeds Corporation and University of Agriculture Sciences, utilize these machines exclusively for moisture content analysis, indicating that they are not limited to the milling industry. Consequently, the Tribunal concludes that these machines fall under Chapter Heading 9031.00 as checking/measuring instruments, rather than Chapter Heading 8437.00. The specific functionality of the machines aligns them with the classification under Chapter Heading 9031.00.

Based on the precedent set by the earlier decision and the nature of the machines' functions, the Tribunal upholds the classification proposed by the Department, thereby rejecting the appellants' claim. The Tribunal finds no grounds for interference in the impugned order, leading to the dismissal of the appeal. The judgment underscores the importance of aligning the specific functions and usage of a product with the appropriate chapter heading under the customs tariff to determine the applicable rate of duty.