2004 (5) TMI 111 - AT - Customs

Summary

Issues:
- Correct interpretation of Notification 16/2000-Cus.
- Classification of machinery (Fermentor) imported by the appellants.
- Eligibility of the machinery for the benefit of the Notification.
- Marketability of the commodity produced by the machinery.

Issue 1: Correct interpretation of Notification 16/2000-Cus.
The appeal contested the correctness of the impugned order-in-original, which denied the appellants the benefit of Notification 16/2000-Cus. The dispute revolved around whether the machinery imported by the appellants, known as 'Fermentor,' was eligible for the benefits under the Notification. The appellants argued that the wording of the Notification had been misinterpreted by the adjudicating authority, leading to the denial of benefits. On the other hand, the Department contended that the machinery did not produce a commodity that could be traded, bought, and sold, justifying the denial of benefits.

Issue 2: Classification of machinery (Fermentor) imported by the appellants.
Initially, there was a dispute regarding the classification of the machinery imported by the appellants. The appellants sought classification under CTH 8419.89, while the Department wanted to classify it under CTH 8479.89. The Tribunal resolved this dispute by classifying the machinery under sub-heading 8479.89 of the CT. However, the matter was remanded to the adjudicating authority to consider the eligibility of the machine for the benefit of Notification 16/2000-Cus.

Issue 3: Eligibility of the machinery for the benefit of the Notification.
The Tribunal found that the machine Fermentor imported by the appellants was for the production of vaccine, which is a commodity. The adjudicating authority had denied the benefit of the Notification on the grounds that the vaccine produced by the machine was in a crude form, requiring further purification and bottling for marketing. The Tribunal disagreed with this view, stating that the Notification covered machinery for the production of commodities classifiable under specific sub-headings without any condition regarding the marketability of the commodities produced. Therefore, the benefit of the Notification had been wrongly denied to the appellants.

Issue 4: Marketability of the commodity produced by the machinery.
The Tribunal emphasized that the machine imported by the appellants was meant for the production of vaccine, which qualified as a commodity. The fact that the vaccine required further processing for marketing purposes was deemed immaterial in the context of the Notification's eligibility criteria. Consequently, the impugned order denying the benefit of the Notification was set aside, and the appeal was disposed of in favor of the appellants.