2008 (8) TMI 151 - AT - Customs

Automatic Wrap and Stacking Machine revenue claim that machine used for wrapping of positive and negative plate which is further used in manufacture of battery, is not commodity as said positive and negative plates of battery are an intermediate product and are commodity, revenue s claim is not correct - impugned order to the extent it denies the benefit of Notification No. 17/2001-Cus. to the goods imported is set aside impugned machine is classifiable u/h 84.79 of CTA, 1975

Summary

Issues: Classification of imported machinery under Chapter Heading 84.79, eligibility for benefit under Notification No. 17/2001-Cus.

Classification Issue:
The appeal challenged the Order-in-Appeal upholding the confiscation of machinery imported under Chapter Heading 84.79 but denied the exemption under Notification No. 17/2001. The appellant imported an "Automatic Wrap and Stacking Machine" classified under sub-heading 8422.40, which was disputed by the adjudicating authority. The Commissioner (Appeals) rejected the appeal, citing that the machine produced only an intermittent product, making it ineligible for the exemption. The appellant's counsel accepted the classification under Chapter Heading 84.79 but claimed the benefit of the notification. The JDR argued that the machine did not produce a marketable commodity, reiterating the lower authorities' findings.

Eligibility for Benefit Issue:
The eligibility for the benefit under Notification No. 17/2001 was the central issue. The notification provided a reduced duty rate of 25% for machinery producing commodities under certain sub-headings. The Revenue contended that the machine only produced intermediate goods, not marketable commodities. However, the Tribunal found that the positive and negative plates produced by the machine, used in manufacturing batteries, were indeed commodities as they could be sold for replacements. Citing a similar case precedent, the Tribunal ruled in favor of the appellant, emphasizing that the notification did not require the produced commodities to be directly marketable. The judgment highlighted that any machinery producing commodities falling under specified sub-headings would be covered by the notification, irrespective of the marketability of the end product.

In conclusion, the Tribunal set aside the impugned order that denied the benefit of the notification to the imported goods, ruling in favor of the appellant based on the interpretation of the notification and the nature of the produced commodities.