2016 (6) TMI 863 - AT - Customs

Classification - import of Rice Milling Rubber Roller and Paddy Dehsuking Rubber Roller - While Revenue says that the goods shall be classified under the CTH 40169990, assessee s claim is that the goods shall fall under CTH 84379020 - Section note 1 (a) of chapter Section XVI. - Held that - The peculiar character of the goods was recognised by the Hon ble Supreme Court in the case of Kohinoor Rubber Mills Vs. CCE, Chandigarh 1997 (2) TMI 125 - SUPREME COURT OF INDIA while determining classification thereof under CTH 40169990. - The switchover to 8 digit classification has no direct impact in applying the section notes. - Decided in favor of revenue.

Summary

Issues: Classification of imported goods under different tariff headings

Analysis:
1. The dispute in this case revolves around the classification of imported goods, specifically "Rice Milling Rubber Roller and Paddy Dehsuking Rubber Roller," under two different tariff headings - CTH 40169990 and CTH 84379020. The Revenue asserts that the goods should be classified under CTH 40169990, while the assessee claims they fall under CTH 84379020. The Adjudicating authority and Commissioner (Appeals) had conflicting views on the appropriate classification.

2. To understand the classification, the relevant tariff entries for both headings are examined. The tariff entry for CTH 4016 covers articles of vulcanised rubber, excluding hard rubber, while CTH 8437 pertains to machinery used in the milling industry or for working cereals. Section notes of the Tariff, particularly Note 1 (a) of Section XVI, exclude certain articles of vulcanised rubber used in machinery from Section XVI.

3. The issue of classification within Chapter 40 was previously addressed by the Tribunal in Kohinoor Rubber Mills case, affirmed by the Supreme Court. The contention of the assessee is based on an Excise Notification granting exemption from customs duty for goods under Chapter 84, specifically CTH 84379020.

4. The Revenue argues that the Commissioner (Appeals) erred by disregarding the Supreme Court's judgment in Kohinoor Rubber Mills and the implications of Section note 1 (a) of Section XVI. The Tribunal's decision in Modi GBC Ltd. case, classifying rubber rollers under a different heading, is also highlighted.

5. The Supreme Court's judgment in Kohinoor Rubber Mills case emphasized the correct classification of rice rubber rolls under CTH 40169990, considering the technical uses of the goods and relevant tariff notes. The respondent's reliance on the exemption notification post the Supreme Court judgment is deemed invalid.

6. The Tribunal's decision in Modi GBC Ltd. case is distinguished from the current scenario due to differences in the nature, usage, and composition of the goods involved. The impugned goods are specifically meant for rice mills, affecting their classification.

7. The Commissioner (Appeals) held that the exclusion under Section note 1 (a) of Section XVI does not apply to the impugned goods, but the Tribunal disagrees. The application of Board's clarification and the transition to 8-digit classification are also considered in the classification analysis.

8. Ultimately, the Revenue's appeals are allowed based on the reasoning provided, leading to the disposal of both Revenue's appeals and cross-objections.

Conclusion:
The judgment resolves the classification dispute of imported goods under different tariff headings, emphasizing the technical aspects, relevant tariff entries, and legal precedents to determine the correct classification.