2018 (7) TMI 1926 - AT - Central Excise

Classification of agricultural products - tea machineries - classified under CETH 84.38 of HSN or under CETH 84.37? - HELD THAT - The issue decided in the case of COMMR. OF C. EX. SERVICE TAX, DIBRUGARH VERSUS T I LTD. 2010 (5) TMI 361 - CESTAT, KOLKATA , where it was held that Use of the impugned machineries for processing other goods like tulsi, coriander, chillis, which are also agricultural products, does not justify shifting the classification from sub-heading 8433.00 and that they do not deserve to be classified under sub-heading 8439.00 - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Classification of tea machineries under Central Excise Tariff Heading, mis-declaration and mis-classification allegations, applicability of SSI exemption Notification, specific entry in Central Excise Tariff Heading No.84.33, classification under CETH 84.38 for machinery not specified elsewhere, comparison with Harmonised System of Nomenclature, relevance of eight-digit classification effective from 28.02.2005.

Classification of Tea Machineries:
The appeal was filed by the Revenue against the Order-in-Appeal alleging mis-declaration and mis-classification of tea machineries. The Adjudicating Authority had dropped the proceedings initiated by the show-cause notice, which was upheld by the lower appellate authority. The main grounds of appeal included the argument that tea machineries did not have a specific entry in Central Excise Tariff Heading No.84.33 or 84.37 and should be classified under CETH 84.38 for machinery not specified elsewhere. The Tribunal referred to the Harmonised System of Nomenclature and the new eight-digit classification effective from 28.02.2005. The Tribunal analyzed the relevant tariff entries and upheld the classification under sub-heading 8433.00 for machineries used for processing agricultural products, rejecting the Department's contention for classification under sub-heading 8438.00.

Mis-Declaration and Mis-Classification Allegations:
The show-cause notice dated 30th April, 2003 alleged mis-declaration and mis-classification of the machines manufactured by the respondent, along with wrong availment of SSI exemption Notification. The Department contended that the goods, tea machineries, did not fit specific entries in Central Excise Tariff Heading No.84.33 or 84.37, arguing for classification under CETH 84.38. However, the Tribunal found that the machineries were rightly classified under sub-heading 8433.00 as they were used for processing agricultural products, and rejected the Department's appeal based on the findings of the authorities below.

Applicability of SSI Exemption Notification:
The SSI exemption Notification was relevant in the context of the mis-declaration and mis-classification allegations against the respondent. The Department's appeal before the Tribunal was based on the argument that the tea machineries should be classified under a more general or residual heading as CETH 84.38, which includes machinery not specified elsewhere. However, the Tribunal upheld the classification under sub-heading 8433.00 for machineries used in processing agricultural products, in line with the findings of the authorities below.

Comparison with Harmonised System of Nomenclature and Eight-Digit Classification:
The Tribunal referred to the Harmonised System of Nomenclature and the new eight-digit classification effective from 28.02.2005 to analyze the classification of tea machineries. Despite the absence of specific entries for tea machineries in certain tariff headings, the Tribunal upheld the classification under sub-heading 8433.00 for machineries used for processing agricultural products, emphasizing the specific description provided in the relevant tariff entry.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by the parties, and the Tribunal's decision based on the classification of tea machineries under the Central Excise Tariff headings.