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TMI Blog2019 (11) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1 for use in the manufacture of drip/sprinkler irrigation system. The appellants have classified the said PVC pipes under CETH 8424 9000 and availed the exemption contained at Sl.No. 70 of Notification No. 03/2005-CE, dated 24.02.2005. The department contended that the classification adopted by the appellants is wrong and the pipes are classifiable under CETH 3917 and accordingly are not eligible for the said exemption. A show cause notice was issued and confirmed by the above cited order demanding a duty of Rs. 1,03,81,249/- while imposing redemption fine and penalties. 4. Ld. Counsel for the appellants submits that the issue is no longer res integra and the issue has been deliberated by the Tribunal in a number of cases and decisions have been given in favor of the appellants, he relied upon the following case laws: i) Elgi Ultra Appliances Ltd. vs. Commissioner of Central Excise, Coimbatore [2000(134)ELT 245(Tri.-Chennai)] (upheld by Hon'ble Apex Court at [2000(120)E.L.T. A 119 (S.C.). ii) EPC Irrigation Limited Vs. Commissioner of Customs & Central Excise, Aurangabad [2002(139)ELT 84 (Tri.-Mumbai)] (upheld by Hon'ble Apex Court at [2010(254)E.L.T. A99 (S.C.)]. iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs, Bombay [1997(90)ELT 428 (Tribunal.)] c) Vardhman Spinning & General Mills vs. Collector of Customs [1991(53)ELT 79 (Tribunal)]. 8. Ld. AR also distinguished the case of Elgi Ultra Appliances (supra) stating that in that case the Department has accepted the classification of goods as drip irrigation system as classifiable under heading 84.24, though the assessee has taken registration as a manufacturer of goods falling under Chapter 39 CETA 1985. He further stated that the appellant has not submitted any evidence to substantiate their claim that their case is also similar to measures of Elgi Ultra Appliances, before the adjudicating authority. The Ld. AR while concluding his submissions stated that in view of Hon'ble Supreme Court decision in the case of Dunlop India and MRF Limited vs. Union of India and others [1983(13)E.L.T. 1566 (S.C.)], the classification of goods on the basis of end use is relevant. 9. We find from the records of the case that the appellants have been contracted by GSFC; GNFC; GAIC; TN Horticulture Development Agency and AP Department of Horticulture for supply and installation of drip irrigation/micro irrigation systems for beneficiary farmers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the item i.e. DIS clearly fall under Heading 84.24 which refers to mechanical appliances or for projecting, dispersing or spraying liquids etc. 8. The supportive arguments for the appellants is also a reading of explanatory note to HSN under Chapter 84.24 which deals with irrigation system. The said note deals with irrigation system which reads as follows : "(E) IRRIGATION SYSTEMS These irrigation systems, consisting of various components linked together usually include : (i) a control station (mesh filters, fertiliser injectors, metering valves, non-return valves, pressure regulators, pressure gauges, air vents, etc.); (ii) an underground network (distribution lines and branch lines which carry the water from the control station to the irrigation zone); and (iii) a surface network (dripper lines incorporating the drippers). Such systems are classified in this heading as functional units within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). This heading also covers: (1) Machines for coating various objects (for example, cups, cartons, boxes) by spraying with paraffin wax or molten wax. (2) Electrostatic paintin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installation of Micro Irrigation System (MIS) in the fields of beneficiary farmers. Para 2.4.1 of the contract, the PVC pipes are mentioned as components alongwith others viz; filters, valves etc. Payments too are also for the complete systems rather than pipes. We find that the agreement with others also are more or less similar. Under the circumstances it cannot be said tht the pipes are supplied separately and as such are for general use. Learned Counsel for the appellants, during the course of arguments, submits that the pipes are made with suitable perforation to enable the water flow as drip whereas such arrangement is not found with general purpose pipes manufactured and cleared by others. As stated, even the department does not allege that the appellants have sold the pipes separately to others, than those who contracted for installation in micro irrigation system. 11. We find that the moment the pipes are utilised for the intended purposes in the irrigation systems, they seized to be parts of general use and lose their character as plastic pipes to be classified under CETH 39.17. We find that this view has been constantly taken by the Tribunal and has been affirmed by H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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