2015 (2) TMI 1058 - AT - Central Excise

Waiver of pre deposit - manufacture of rice bucket elevator and rice conveyor - Classification of goods - Classification under heading 8437 or heading 8428 - classification as as other lifting, handling, loading or unloading machinery (for example Lifts, escalators, conveyors, Teleferice) - Held that - The Commissioner has given a finding that the goods, in question, are basically conveyors and elevators which are used for transportation of rice in a rice mill from one stage to another, and that the same are integral part of the machinery to achieve the desired production in a particular time frame. However, having given this finding, the Commissioner has gone on to say that these items are not essential part of the machinery in absence of which the whole machinery would come to stand still and that the same can be utilized to transport not only rice but anything else also. However, it is seen that the appellant have produced opinion from technical experts - College of Engineering, Pune and St. Lango Institute of Engineering and Technology wherein it has been opined that these machines are specially designed for handling and processing of food grains and that as per the characteristics of the raw material used, component and fabrication techniques used for manufacture of grain dischargers and grain feeders, these are not fit for handling heavy and abrasive type material like sand, coal lime etc. It is also seen that same machinery when imported into India are being classifiable by different Customs Houses as milling machinery under heading 8437. - prima facie classifiable as milling machinery under heading 8437 - Stay granted.

Summary

Issues Involved:
Classification of goods under heading 8437 or 8428, Duty demand confirmation, Interest imposition, Penalty imposition, Prima facie case for waiver of pre-deposit.

Analysis:

1. Classification of Goods:
The dispute in this case revolves around the classification of rice milling machinery parts, specifically rice bucket elevator and rice conveyor. The appellant classified these goods under heading 8437 as machinery used in the milling industry with a nil tariff rate. However, the department argued that these goods should be classified under heading 8428 as other lifting, handling, loading, or unloading machinery. The Commissioner confirmed the duty demand against the appellant, imposed interest under section 11AB, and penalties under sections 11AC and 11AC on the company's Managing Director. The appellant contended that the goods are specifically designed for handling and processing food grains, not heavy or abrasive materials like sand or coal. Technical experts' opinions supported this claim, stating that the machinery is meant for the rice milling industry, leading to the conclusion that the goods should be classified under heading 8437 as milling machinery.

2. Prima Facie Case for Waiver:
The appellant argued that they have a strong prima facie case in their favor based on the technical experts' opinions and the specific design of the machinery for handling food grains. The Commissioner's finding that the goods could be used for transporting items other than rice was disputed, emphasizing the specialized nature of the machinery for the rice milling industry. The Tribunal considered these arguments and technical opinions, concluding that the goods are correctly classifiable under heading 8437 as milling machinery. As a result, the requirement of pre-deposit of duty demand, interest, and penalty was waived for the hearing of the appeals, and recovery was stayed. The stay applications were allowed based on the prima facie case in favor of the appellant.

This detailed analysis of the legal judgment highlights the key issues, arguments presented by both parties, expert opinions, and the final decision of the Tribunal regarding the classification of goods and the waiver of pre-deposit requirements.