1997 (10) TMI 144 - AT - Customs

Summary

Issues:
- Classification of imported machine under Notification No. 125/86-Cus.
- Eligibility for concessional rate of customs duty.
- Interpretation of machine description and classification.
- Presence of control panel and impact on duty benefit.
- Applicability of Serial No. 17 and Serial No. 29 of the Notification.
- Discrepancy between machine description and classification.
- Consideration of machine as complete for customs duty purposes.

Analysis:

The judgment revolves around the classification and eligibility for duty benefit of a machine imported by M/s. MOI Engineering Ltd. under Notification No. 125/86-Cus. The dispute arose as the machine was initially described as a Horizontal Form, Fill and Seal Machine but later labeled as a High Speed Automatic Wrapping Machine. The Assistant Collector disallowed the duty benefit, stating it was not a wrapping machine. However, the Collector of Customs (Appeals) deemed it eligible for the benefit under the Notification, classifying it as a High Speed Automatic Wrapper for packaging food articles, specifically biscuits.

The Tribunal examined the machine's description, noting it was an AP 400 Alpha Horizontal Wrapping Machine classified under sub-heading 8422.40 for packing or wrapping machinery. Both Form, Fill and Seal Machines and High Speed Automatic Wrappers were covered by the Notification. The Revenue argued the machine lacked vacuumising or gas flushing functions, but the Tribunal found this condition did not apply to machines under Serial No. 29. The Tribunal upheld the Collector's classification, emphasizing the machine's description in the catalogue as a High Speed Automatic Wrapping Machine aligned with the classification under sub-heading 8422.40, warranting duty benefit.

Regarding the control panel absence, the Assistant Collector noted it was not supplied by the suppliers, but the Tribunal accepted the explanation that a local panel was to be purchased due to compatibility issues. The Tribunal emphasized that the machine, imported in a knocked-down state, should be considered complete for customs duty classification, not as parts. As the machine was treated as complete machinery, it was deemed eligible for duty benefit under the Notification.

After considering all evidence and facts, the Tribunal found no grounds to overturn the Collector's decision. Consequently, the Revenue's appeal was dismissed, affirming the eligibility of the imported machine for the concessional rate of customs duty under Notification No. 125/86-Cus.