2015 (12) TMI 998 - AT - Customs

Classification of goods - whether the paddle wheel aerators and its parts imported and cleared are classifiable under Chapter 8436 as other agricultural, horticultural machines or under Chapter 8479 as machines having individual functions not elsewhere specified as held by the department - Held that - Appellant had imported paddle wheel aerators under Bills of Entry mentioned above and classified under chapter 87368090. It is not disputed that the paddle wheel aerators are used in aquaculture and its activities are part of aquaculture. Aquaculture is also known as aqua farming, ie., farming of aquatic organisms such as fish, crustaceans, molluses and aquatic plants - paddle wheel aerators are used for fisheries/aqua culture and are classifiable under chapter heading 8436 of the CTH. Accordingly, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Classification dispute regarding paddle wheel aerators and parts imported under Bills of Entry, whether they are classifiable under Chapter 8436 as agricultural machinery or under Chapter 8479 as machines with individual functions.

Analysis:
1. The appeal was initially dismissed for non-compliance with a stay order, but later restored upon the appellant's deposit. The case involved the classification of paddle wheel aerators imported by the appellant under two demand notices for reclassification.

2. The appellant argued that the paddle wheel aerators were for aquaculture use, enhancing oxygen levels in aquatic farms. The Ld. Counsel highlighted the National Policy for Farmers 2007, emphasizing the inclusion of fisheries and aquaculture in agricultural activities.

3. The department contended that the aerators should be classified under 8479, not 8436, as aquaculture was not explicitly listed in the classification. The principles of "ejusdem generis" and "noscitur a sociis" were invoked by the appellant to support their classification argument.

4. The Tribunal analyzed the classification dispute, noting the description under CTH 8436 covering agricultural machinery. The HSN notes and the wide definition of machinery under 8436 supported the appellant's argument for classification under 8436.

5. The Tribunal rejected the revenue's argument that aquaculture did not fall under agriculture, citing the Coastal Aquaculture Authority Act and the National Agricultural Policy for Farmers 2007, which included aqua farming in agricultural activities.

6. Based on the evidence and arguments presented, the Tribunal concluded that paddle wheel aerators were rightly classifiable under Chapter 8436 as agricultural machinery, not under Chapter 8479. The differential duty demanded was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the key arguments, legal principles, and findings of the Appellate Tribunal CESTAT CHENNAI regarding the classification dispute over paddle wheel aerators.