1992 (2) TMI 251 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods under Customs Tariff Heading 8418.69.
2. Eligibility for benefit under Customs Notification No. 59/87.
3. Imposition of penalty for mis-declaration of value.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue was whether the imported "Wilshire Mechanical Refrigeration Post Mix-Beverage Fountain with Key Lock Facility" should be classified under Customs Tariff Heading (CTH) 8418.69. The Collector of Customs upheld the importer's claim for classification under CTH 8418.69, which pertains to "Other refrigerating or freezing equipment." The Tribunal noted that the heading 84.18 includes refrigerators, freezers, and other refrigerating or freezing equipment, and the imported item falls under "other refrigerating or freezing equipment." The Tribunal agreed with the Collector's classification, emphasizing that the equipment performs the function of refrigeration and freezing, aligning with the description under CTH 8418.69.

2. Eligibility for Benefit Under Customs Notification No. 59/87:
The critical issue was whether the imported goods, though classified under CTH 8418.69, were eligible for the benefit of Notification No. 59/87, which provides concessional duty rates for certain items under Chapter 84 or 85. The Collector denied the benefit, arguing that the equipment, being a composite machine performing refrigeration, carbonation, and mixing, did not qualify as "refrigeration equipment" under the notification. The Tribunal, however, disagreed, stating that the equipment's primary function is refrigeration, and the additional functions of mixing and carbonation are integral to the refrigeration process. The Tribunal noted that the description in S. No. 13 of the notification matches the tariff heading and that the equipment should be considered as refrigeration equipment. The Tribunal emphasized that the refrigeration function is not ancillary but essential to the equipment's operation, thus qualifying it for the notification's benefits.

3. Imposition of Penalty for Mis-declaration of Value:
The Collector imposed a penalty of Rs. 2500/- for the mis-declaration of the value of spares in the first consignment. However, the valuation for the first consignment given to bottlers was accepted, and for the second consignment, it was to be finalized by the Special Valuation Branch of the Customs House. The Tribunal did not specifically address the penalty issue in its detailed analysis but focused on the classification and eligibility for the notification benefit.

Conclusion:
The Tribunal concluded that the imported equipment, classified under CTH 8418.69, qualifies for the benefit of Notification No. 59/87. The Tribunal emphasized that the equipment's refrigeration function is primary and integral, and the additional functions do not disqualify it from the notification's benefits. The appeal was allowed, granting consequential relief to the appellants.