2005 (10) TMI 122 - AT - Central Excise

Summary

Issues:
Classification of machinery items under Chapter Heading 84.34, applicability of duty rates, exclusion of certain items from Chapter Heading 84.34.

Analysis:
The appeal arose from an order confirming a duty demand on specific machinery items while setting aside a penalty imposed by the adjudicating authority. The dispute centered around the classification of items under Chapter Heading 84.34 of the CETA, 1985. The items in question included various dairy machines like pasteurizers, chillers, pumps, and separators. The assessee claimed classification under Chapter Heading 84.34 and 84.34.90 for certain parts. However, the authorities applied Note No. 2 of Chapter Heading 84 and HSN explanatory notes to exclude items like pasteurizers and chillers from Chapter Heading 84.34. The adjudicating authority classified the items based on their functions, such as heat exchangers falling under CETA sub-heading 8419.10 and pumps under Chapter Heading 8413.99, attracting a duty rate of 13%.

The HSN explanatory note further clarified that machines for processing milk based on heat exchange principles and refrigerating appliances are excluded from Chapter Heading 84.34. Additionally, machines for wrapping or weighing products are also excluded. A previous Tribunal decision in the Diary Development Corporation case classified a butter packing machine under Heading 84.22 of the Customs Tariff Act, not under Heading 84.34. Considering Note No. 2 to Chapter Heading 84.34, HSN explanatory notes, and the Tribunal's precedent, the appellate tribunal rejected the appellants' contentions. The tribunal upheld the authorities' classification of the machinery items under different headings of Chapter 84, thereby affirming the duty demand and dismissing the appeal.