9911796707
TMI Blog2023 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter Subheading 84379090 of the Central Excise Tariff Act, 1985 adopted by M/s. B.G. Shirke Construction Technology Pvt. Ltd. ii) Silos are to be classified under chapter sub-heading 94060099 of the Central Excise Tariff Act, 1985 as is proposed in the subject notices. iii) Invoice value of clearance of Rs. 86,64,10,215/- during the period October, 2010 to March, 2015 as above and Rs. 6,59,87,402/- for the period from April, 2015 to December, 2015 respectively is to be considered as assessable value under Section 4 of the Central Excise Act, 1944 involving Central Excise duty payable amounting to Rs. 10,22,96,115/- and Rs. 82,48,427/- respectively. iv) Extended period has been correctly invoked in the show cause notices for the reasons mentioned above for recovery of duty along with interest and penalty for non payment of duty by availment of nil rate of duty beyond the period of one year. Accordingly, I hold that M/s. B.G. Shirke Construction Technology Pvt. Ltd. are liable for payment of duty, interest and penalty as below- i) Central Excise duty amounting to Rs. 10,22,96,115/- (Rupees Ten Crores Twenty Two Lakhs Ninety Six Thousand One Hundred and Fifteen Only) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " B. PUN-EXCUS-001-APP-114/2019-20 dated 30.09.2019 - Commissioner (Appeal) has upheld the order in original No PUN-EXCUS-001-ADC-RKD-0-19/18-19 dated 30.11.2018 holding as follows: "ORDER 21.1 I reject the classification of the subject excisable goods i.e. 'Silo' under Chapter Sub-heading 84379090 of the erstwhile Central Excise Tariff Act, 1985 adopted by M/s. B.G. Shirke Construction Technology Pvt. Ltd., 72-76, Mundhwa, Pune 411036 and hold that Silos are to classified under chapter sub-heading 94060099 of the erstwhile Central Excise Tariff Act, 1985 as is proposed in the subject Statement of demand. 21.2 I confirm the invoice value of clearance of Rs. 15,20,76,461/- (Rupees Fifteen Crore Twenty Lakhs Seventy Six Thousand Four Hundred and Sixty One Only) during the period January, 2016 to June, 2017 is to be considered as assessable value under Section 4 of the erstwhile Central Excise Act, 1944 involving Central Excise 21.3 I confirm and determine the demand of duty of excise amounting to Rs 1,90,09,557/- (Rupees One Crore Ninety Lakhs Nine Thousand Five Hundred and Fifty Seven Only) made by the Statement of Demand No 08/CEX/PUNEI/ CGST/ADC/2018 dated 25.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential character of prefabricated buildings and has an independent function of storage or housing of grains / other produce / finished product, etc. Hence, in accordance to Rule 2(a) and Rule 3 of the General Rules of Interpretation of the First Schedule to the Central Tariff Act, 1985 and section note 4 of section XX of chapter 94, the silos manufactured and cleared by M/s. BGSCTL, Pune appear to be rightly classifiable under Chapter Sub-heading 94060099 of the first schedule of Central Excise Tariff Act, 1985 and is subjected to normal rate of Central Excise Duty. 2.4 Accordingly show cause notice dated 03.11.2015 was issued by the Additional Director General DGCEI, Bangalore asking the appellants to show cause as to why: (i) The Silos manufactured and cleared by them should not be classified under chapter sub-heading 94060099 of the Central Excise Tariff Act, 1985 and the invoice value of clearance of Rs. 87,17,11,215/- (Rupees eighty seven crore seventeen lakh eleven thousand two hundred and fifteen only) during the period October 2010 to March 2015 should not be considered as assessable value under Section 4 of the Central Excise Act, 1944; (ii) The central excise duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of grain storage silos; (ii) Inform if the reply was sent to CBEC by the office of the Chief Commissioner of Customs and Central Excise, Pune." * In reply thereto, vide letter dated 19.01.2016 the above information was provided to the appellants along with copies of the communication sought thereof. On perusal of letter F. No. 84/04/2012-CX.I dated 15.10.2012, it is clear that the CBEC had sought the view of the Pune Commissionerate on the issue of classification. The same was sought on a reference made by M/s Fowler Westrup (India) Private Limited vide letter dated 17.09.2012. In reply to the CBEC, the Ld. Chief Commissioner of Central Excise, Pune vide letter F. No. IV/16- 104/CCO/PZ/TECH/2012 dated 09.01.2013 has categorically stated that the silo system manufactured by the appellants would merit classification under chapter 8437. It has also been stated that the same issue has been decided by the Hon'ble CEGAT vide order No. E/442 and 443/1995-B in their own case and the said order has been accepted by the department (vide CBEC letter F. No. 304/71-72/06-C). The said letter has been written by the Ld. Chief Commissioner of Central Excise, after the introduction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... digit classification. Hence, it is clear that there was no deviation on the classification per se from the six digit classification system. The Commissioner clearly seems to be oblivious of this crucial aspect. * There has been no change in the classification of the product, in question, under the 8 digit classification vide the 2005 amendment. The silos would still be classified under tariff item no. 8437 of the Central Excise tariff. The transition from six digit classification to eight digit classification is only for purposes of alignment and does not call for reclassification of the goods manufactured by the appellants. The issue of classification of "silos" is settled by the judgment of this Hon'ble Tribunal in their own case. * In light of the decision of Hon'ble Bombay High Court in the case of Eco Valley Farms & Foods Limited [2013 (290) ELT 49 (Bom)] it is abundantly clear that the Department is bound by the classification approved and verified way back in 1994, as there is no change in law (vide 2005 amendment) in so far as the classification of the goods in question is concerned. * Vide Circular No.808/05/2005-CX dated 25.02.2005, while clarifying the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been decided by the highest appellate authority, the same cannot be re-opened under any new guise or pretext. No fresh facts have come to light. The factual position remains the same. Hence, the rule of constructive res judicata will apply in the facts of the present case. Therefore, the present proceeding is barred by the rule of res judicata. * Reliance placed on the decision in Eminence Equipments Private Limited 2015 (330) ELT 344 is uncalled for. The facts of the said case are totally different and distinguishable from the facts of the present case. * The Ld. Departmental Representative also submitted that there is no estoppel in law. He relied on judgment of the Supreme Court in the case of Dunlop India 1983 (13) ELT 1566 (SC). The said principle was held in the case of party seeking to change the classification. Even otherwise, the question in the instant case is not of estoppel but judicial discipline. * Silo system" will not be classifiable under tariff item no. 9406 0099 * The Ld. Commissioner discusses the mean of the term "building" and based on the brochures, holds that the silo manufactured by the appellants consists of structures enclosed with exterior w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plain perusal of the above HSN, it becomes clear that the above chapter heading seeks to cover only prefabricated buildings meant to be used as housing, worksite, accommodation, offices, schools, shops sheds, garages and greenhouses. This is further evident from the fact that the said HSN refers to electrical fittings, heating and air conditioning equipment sanitary equipment, kitchen equipment and items of furniture. Obviously, the silo system, in the instant case, would not have any of the said equipments. Though this specific submission was made, the Ld. Commissioner chooses to conveniently ignore the same. * Most importantly, there is no allegation in the show cause notice that the "silo system" would merit classification under tariff item no. 9406 0093 "silos for storing ensilage'. There is only one entry referring to "silos". The Ld. Commissioner also admits this in the impugned order. However, the Ld. Commissioner also does not classify the same under the said chapter heading. Silage is fermented, high-moisture stored fodder which can be fed to cattle, sheep and other such ruminants (cud-chewing animals) or used as a biofuel feedstock for anaerobic digesters. It is fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 343 (Tribunal)] * Vardhman Acrylics Ltd. [2002 (146) E.L.T. 604 (Tri. Del.)] * Appellants are not manufacturing "Silos System" in the factory but even as per their own invoices and admission, what they manufacture and clear is "silo" or as per their invoices "Components of Silo System", thus the classification of Silo System, which as per their own admission is immovable property, is not relevant. * Ch. Sh. 8437 is classifying the excisable goods answering to the description of being "Machines for cleaning, sorting or grading seed, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables, other than farm-type machinery". The Silo as cleared from the factory (at the time of assessment at factory for payment of duty) were not capable of performing any of the above said function of cleaning, sorting or grading seed, grain or dried leguminous vegetables and also the same were not cleared to any milling industry or for working of cereals or dried leguminous vegetables. * What is emerging at the Customers' end is not relevant. What the 'Silo System' is capable of performing is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal also observed that "..from the list of customers produced before us, it appears that it is being used mostly by milling industry at present..." * Appellants contend that Silo System has accessories attached for multiple purpose of loading etc. However, this is not relevant as the issue is not of classification of Silo System but the excisable goods cleared as "Components/accessories of Silo System" and whether the same were answering to the requirement of present ch.Sh.8437 and perform the functions as stated therein in the state as cleared from the factor at the time of assessment. * The Purchase Order is giving description of the goods. There are evidences in support that Silos were cleared which were capable of storing only and used exclusively for storing. The Appellants have not produced any evidence to the contrary. * Appellants admitted that the Silo System emerges when Silos manufactured by the Appellants are installed at the premises of the customers with other components/accessories. The Appellants further claim that while determining the classification of a product, the function, nature and end use of final product has to be borne in mind, and for this rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sides and thus are specifically covered under ch.sh.94060099. * The Appellants claim that reliance placed on amendment in 2005 from six digit to eight digit is irrelevant. The dispute is not just arisen due to shifting of six digit Tariff system to eight digit but the wrong classification of Silos in spite of there being a specific entry. The product manufactured and cleared during the disputed period is different from the product classified by the CEGAT in the Order [1996 (81) E.L.T. 417 (Tribunal)] dated 10/11/1995. * There is no case laws which decides that even if there is new specific entry in the changed tariff, the old entry should be continued. In Crane Betel Nut Powder Works decision, it was decided what activities were not amounting to manufacture would not becoming manufacturing just because of change in tariff from 6 digit to 8 digit. Similar is the case in Eco Valley Farms & Foods Limited where the excitability of the product was in issue. * Circular No. 808/5/2005-CX., dated 25-2-2005 nowhere says that the new tariff should not be given effect and even if specific headings are incorporated in the new tariff, the old classification should be continued. Thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Tariff Act. 1985, he has stated that Chapter 94 contains furniture, bedding, mattress supports, cushions and similar stuffed furnishing, lamps and light fittings, not elsewhere specified or included; illuminated signs, illuminated name plates and the like; prefabricated building; as per CETH 94060093 it is mentioned as 'Silos for storing ensilage' and 94060099 is for 'Other'. 93.1.2. Shri Kishor Madhav Thatte, Vice President (Finance) and Company Secretary (notice no. 2) in his statement dated 20.01.2015 has stated that they manufacture Silos, which are dispatched in parts (in CKD condition); Silos installed at the site of the clients after testing; they manufacture Silo Systems based on the customer requirements and their usage depends on the customer's choice and preferences; they are not manufacturing conveyor belts, bucket elevators, pre-cleaners, in their factory and if it is required by the customer, same are supplied to them as bought out items or otherwise they supply only Silo System. I find that he has also stated that the description under 8437 of CETA, 1985 states that "Machines for cleaning, sorting or grading seed, grain or dried legumino ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or fermented feed known as silage. Silos are more commonly used for bulk storage of grain, cement, sugar etc. In this regard I find that as per the general rules of interpretation of Schedule to Central Excise Tariff, both prior to eight digit classification and subsequently too, any reference to an article if it has essential character of complete or finished goods, it should be classified as a finished article itself. For better appreciation, Rule 2(a) of General Rules for Interpretation of CETA, 1985 is reproduced below- "Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled". (emphasis supplied) As per Rule 3(a) of General Rules for Interpretation of the First Schedule to the Central Excise Tariff Act, 1985 when by application of rule 2(b) or for any other reason, goods are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various statements as also as is stated in their brochure. 93.3.3. On going through the statements of Shri Ajay Das Gupta of M/s. Gujarat Ambuja Exports Ltd., Shri Sanjay Jamdade of M/s. Millenium Starch India Pvt. Ltd. and Shri P.S.Inganahalli of M/s. Bilagi Sugar Mills Ltd. regarding the functions of Silos I find that Silos are used only for storage of maize and sugar of different grades. Silos do not consist of any mechanical device to perform the function of cleaning, sorting, grading of food grains as it does not consist of any mechanical device to do such functions. For carrying out functions of cleaning, sorting etc. Silos are required to be fitted with bought out accessories. From the statements recorded it is evident that a Silo manufactured and cleared by noticee no. 1 is not a standardized equipment manufactured for carrying out the function of cleaning, sorting or grading seed, grain. or dried leguminous vegetables or it is not a machinery used in the milling industry or for the working of cereals or dried leguminous vegetables as claimed by noticee no. 1. On the other hand it is built as per customer's requirement and is used merely for storing purposes. I find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural or industrial types, of a kind used for cleaning, sorting or grading cereal grains, dried leguminous vegetables, seeds, etc, by winnowing, blowing, sieving, etc. Such machines include: - Fanning mills consisting of a feeding hopper, a blower and sieves (usually vibrating). - Grading winnowers, rotating winnowers and seed or grain selectors, more complex machines which clean by means of air currents, and grade the seed or grain according to weight, size or shape. Some seed selectors, etc., incorporate auxiliary devices for coating the seeds with insecticide powders, etc. -Sieving belts, often used for cleaning beet seed. They consist of a series of rolls operating an endless inclined belt running under a feeding hopper. The seeds roll freely to the bottom of the belt but the light vegetable waste adheres to the plushy surface of the belt fabric. -Special machines for selecting and grading seed for planting. This heading also covers machinery used in the milling industry for cleaning, sorting or grading grain prior to milling. Some of these machines are based on the same principles as the winnowing, screening and grading machines described above, but are designed l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, etc., produced by milling. - This separation is effected by a series of operations carried out on the following types of machines which are often used in series: -Sifting machines ("bolters") for separating flour from groats and cereal Centrifugal sifters (or "reels") consist of drums fitted internally with beater bars and covered externally with gauze of various mesh sizes. Oscillating sifters or plansiffers consists of nests of free-swinging superimposed sieves and collecting trays. -Sieving machines or "purifiers". These grade the middlings etc. and also blow off the bran by means of vibrating sieves through which a current of air is drawn. -Bran cleaners. -Blending machines for flour, bran etc.; also machines for adding vitamins to flour. However, the heading does not cover: -Flour-drying machines (heading 84 19). -Air filters and "cyclones " used to extract the dust from the exhaust air issuing from sorting or bolting machines (heading 84.21) -"Extraction recorders" for recording the flour extraction rate, and other flour testing apparatus of Chapter 90. (III) MACHINERY USED FOR THE WORKING OF CEREALS OR DRIED LEGUMINOUS VEGETABLES The worki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uminous vegetables or a machinery used in the milling industry or for the working of cereals or dried leguminous vegetables. By wrongly attributing the functions of auxiliary machines which carry out certain definite functions to Silos manufactured by them, it appears that noticee no. I have mis-classified the Silos under Chapter 8437 for availing the unjustified benefit of clearing the same at Nil rate of Central Excise duty. 93.4. I find that the description of excisable goods proposed in the notice/s and mentioned under Chapter Heading 9406 of the Central Excise Tariff Act, 1985 is- "Prefabricated building". 93.4.1. As regards noticee no. 1's contention that Silos should not be treated as prefabricated building I find that the description of goods under Chapter heading 9406 of CETA, 1985 is referred to as 'Prefabricated buildings' and the Chapter subheading 94060093 under the Chapter heading 9406 refers to "Silos for storing ensilage" while the immediately succeeding sub-heading 94060099 refers to "Other". 93.4.2. I find that in common dialect Prefabrication is the practice of assembling components of a structure in a factory or other manufacturing site, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and are assembled on site of the customers. I therefore find that the Silos manufactured by the noticee no 1 squarely fit in the description of goods as "prefabricated buildings". Silos are pre fabricated buildings is clearly evidenced from the fact for storing ensilage have specifically been classified under chapter subheading 94060093' hence it follows that Silos for storage of other materials should be rightly classifiable under immediately following (and residual) chapter subheading 94060099 of the CETA, 1985. 93.4.4. I find that six digit classification of goods which was in vogue till 2005 was replaced by eight digit System and was implemented with effect from 28.2.2005 vide Notification No 6/2005-Central Excise (NT) dated 24.02.2005. There were no specific descriptions under the sub-headings, when six digit classification was in vogue. Under the eight digit classification, more specific descriptions of the goods were incorporated as sub-headings. Under the Chapter Sub-headings 94060093 and 94060099 the description of the goods as 'Silos for storing ensilage' and 'Other' was introduced. I find that the Silos have a specific classification in the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed building since it is fully fabricated in their factory and thereafter cleared in CKD for installation at customer's site. The basic function and use of Silo is that it is used as storage device. Apex Court in the case of UOI Vs. Pesticides Mfg. and Formulators Association of India - 2002 146) ELT 19 (SC) has held that specific heading is to be preferred over a general heading and if there are two specific headings for the product one occurring subsequently will prevail. For purpose of classification rules of interpretation contained in Chapter Notes would be given effect in preference to general rules of interpretation- 2004 (172) ELT 289 (SC) Constitution Bench CCE Vs. Acer India Ltd. 93.4.6. As regards their reliance in their own case decided jointly with Thermax Ltd. I find that the said case is clearly distinguishable from the present as the said case pertains to the period prior 2004 when specific heading for Silos did not exist. Para 24 of the Tribunal's judgement dated 10.11.95 [1996 (81) ELT 417 (T)] in noticee no 1's own case states that residuary entries can be considered only if a product could not be classified in any of the more specific headings. I find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom other suppliers of said accessories as mentioned above. I also find that they have not demonstrated any evidence as to how the function of cleaning, sorting, grading etc. is done by Silo manufactured by them without the fitment of accessories required for carrying out each of the function. 93.4.10. In view of the above, I conclude my findings that the Silos manufactured by noticee no. 1 are actually Silos for storage which are pre-fabricated structures/buildings and will rightly be classifiable under CETH 94060099 of CETA, 1985 as alleged in the show cause notices. 94. As regards their submission that in the event the demand proposed is confirmed, then they should be given benefit of CENVAT credit on inputs and input services used in the manufacture of Silos, I hold that CENVAT credit is available on the inputs/input services used in the manufacture of Silos provided duty on Silos is paid and subject to the eligibility of inputs within a reasonable period and subject to various other conditions. This matter is outside the purview of the issue hereunder. 95. With regard to the next point of determination before me that whether extended period is invokable in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided. These are made of standard structural steel for providing support to the overhead conveyor. These also do not do the functions of cleaning, grading or sorting of food grains or leguminous vegetables. In some cases they provide temperature monitoring System which is used. only to monitor the temperature inside the silo and does not do the functions of cleaning, grading or sorting of food grains or leguminous vegetables. I therefore find that there was no warrant for classifying Silos manufactured by noticee no. 1 as a "machine" to fall under CETH 8437. 95.3. Shri. Thatte, Senior Vice President (Finance) and Company Secretary (noticee no. 2) vide letter dated 04.09.2015 has stated that GIC Silo Systems are supplied with standard accessories and just like other Systems it can also be supplied with optional accessories such as Temperature measuring Device, Level Indicators, etc. entirely depending upon the need of a client; that the GIC Silo System supplied to their clients over the years are capable of performing functions such as cleaning, sorting, grading. It may consist of ancillary equipments like Chain/Belt Conveyors, Bucket Elevators for loading & un-loading, cleanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... President (Finance) and Company Secretary(noticee no.2) who is incharge of indirect taxation and understands the financial implications of product description vis-à-vis of those such as Shri. D.B. Ghule, DGM-Productions and Shri. Suresh R. Thakar, General Manager who are officers uninvolved in taxation matters, has proved the willful intention of notice no. 1 and the involvement of Shri. Thatte to evade payment of Central Excise Duty. They have also misled the department by mis-stating the function of Silo and terming the Silos as "Silo System" although they are only engaged in manufacture of Silos. I find that noticee/s have attempted to project that the Silos are Systems which in their standalone capacity can perform the functions of cleaning, sorting or grading of grains which is factually incorrect. Thus, I find that the concerned noticee/s have deliberately attributed the performance of the entire installed structure to bare Silos and deliberately raised the invoices as 'Silo System' mis-classifying the Silos under CET 8437 for availing nil rate of excise duty. 95.5. I find that with reference to earlier classification dispute (prior to 2005) though departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited the classification and corrected the same on their own. In view of the same their contention is not acceptable. 96. From the facts discussed above and evidence on record I find that the noticee no. I have contravened the provisions of rule 2(a) and 3 of General Rules for interpretation of Central Excise Tariff Act, 1985 inasmuch as they have failed to correctly classify the Silos manufactured and cleared by them, rule 4, 6, 8 of the Central Excise Rules, 2002 inasmuch as they have failed to pay the duty leviable on the manufactured goods so removed from their factory, failed to assess the duty payable on the removal of manufactured excisable goods and failed to pay the Central Excise duty in the manner prescribed in the said Rule respectively. I find that they have intentionally misclassified the goods and removed the same at Nil rate of Central Excise duty and thereby evaded payment of appropriate duty. I find that willful suppression and mis-statement by them would not have been noticed if the same had not been investigated by DGCEI, BZU. They have deliberately misclassified the goods to avail Nil duty benefit which has led to evasion of Central Excise duty and thus have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 5. For the purposes of these Notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85. CHAPTER 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 8437 843700 Machines for cleaning, sorting or grading seed, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables, other than farm type machinery SECTION XX - MISCELLANEOUS MANUFACTURED ARTICLES CHAPTER 94 Furniture; bedding, mattress supports, cushions and similar stuffed furnishing; lamps and lightings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated building 4. For the purposes of heading 9406, the expression "prefabricated buildings" mean buildings wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and similar stuffed furnishing; lamps and lightings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated building 4. For the purposes of heading 9406, the expression "prefabricated buildings" mean buildings which finished in the factory or put up as elements, presented together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings. Prefabricated buildings 940600 - Prefabricated buildings: --- Green Houses: 94060011 ---- Green house-in ready to assemble sets 94060019 ---- Other --- Other 94060091 ---- Prefabricated housing material 94060092 ---- Prefabricated construction for cold storage 94060093 ---- Silos for storing ensilage 94060099 ---- Other 4.4 From perusal of the above entries it is quite evident that the terms of heading pre and post introduction of the 8 Digit Classification Code in Central Excise the Section Note and Chapter Note and the terms of Chapter Heading, at 6- digit level were not amended or changed in any manner. This implies that the classification of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it meets the obligations at (a) (i), (a) (ii) and (a) (iii) above in a combined tariff/statistical nomenclature. 2. In complying with the undertakings at paragraph 1 (a) of this Article, each Contracting Party may make such textual adaptations as may be necessary to give effect to the Harmonized System in its domestic law. 3. Nothing in this Article shall prevent a Contracting Party from establishing, in its Customs tariff or statistical nomenclatures, subdivisions classifying goods beyond the level of the Harmonized System, provided that any such subdivision is added and coded at a level beyond that of the six-digit numerical code set out in the Annex to this Convention." From the perusal of the above convention it is quite evident that the contracting parties to the HSN Convention could have in its statistical nomenclature, could have only specified the any sub division at a level beyond the six digit nomenclature set out in the code. The amendments made in the First Schedule to Central Excise Tariff Act, 1985 by the amending Act of 2004 were to expand the classification code from 6 digit to 8 digit and align the Central excise tariff with the Customs Tariff which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Material for the assembly or finishing or prefabricated buildings (eg. Nails, glues, plaster, mortar, electric wire and cables, tubes and pipes, paints, wallpaper, carpenting) is to be classified with the buildings, provided it is presented therewith in appropriate quantities Presented separately, parts of buildings and equipment, whether or not identifiable as intended for these buildings, are excluded from the heading and are in all cases classified in their own appropriate headings." 4.8 In the impugned order, for holding that the "silos" are prefabricated building, reliance has been placed on the heading No 94060093, which reads "Silos for storage of ensilage". The conclusion sought to be derived is all other silos, thus will be classified under the heading 94060099. Chapter heading 9406 00 covers "pre fabricated buildings". Within the said classification, there are two sub-classifications (--- (3) dashes): (a) Green Houses and (b) Other. Within the said subcategorization (other), there is further sub-classification (--- (4) dashes): (91) prefabricated housing material; (92) pre fabricated construction for cold storage; (93) Silos for storing ensilage and (99) other. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a residuary item and in any case it could not be classified under 84.79 because the same is meant for machines and mechanical appliances having individual functions not specified or included elsewhere in this chapter; and apart from being residuary item it cannot cover their system which performs more than one function and is not having individual functions. 10. Learned counsel Shri Nankani stated that he adopts all the arguments advanced by the learned counsel Shri V. Lakshmi Kumaran but would like to add certain factual aspects of their case and emphasise his view point particularly with reference to 84.37. 11. In their case the assessee had initially claimed classification under 84.37 but the Assistant Collector had changed the classification to 84.79 (vide impugned adjudication order). The Collector (Appeals) on the other hand had accepted their alternative prayer regarding classification under 84.36 and it is the department which has now come in appeal. 12. In this connection, it is their submission that their main contention is that it was correctly classifiable under 84.37. From the pamphlet filed by them, it will be seen that their SILO Grain Storage Complex is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the milling industry and 84.37 covers only the machinery used in the milling industry for specified purposes and other than farm type machinery. Therefore, Silos would fall under 84.38 as machinery not specified or included elsewhere in the chapter and those items having individual functions have to be classified under 84.79 which covers such machines and mechanical appliances which have individual functions. 21. It was also his contention that HSN or BTN also confirms this view point. 22. It was his further contention that since neither 84.38 nor 84.79 are covered by exemption Notification No. 111/88, dated 1-3-1988, therefore, the benefit of this notification could not be extended to the product. 23. We have considered the above submissions. We observe that the catalogue/pamphlets produced before us giving the description of use of the product and the list of customers filed before us by the learned Counsels show that the item is not simply a storage bin for grains etc. but a complex system incorporating many devices or sub-systems and having arrangements for loading and unloading, handling or airation of grain as well as safeguarding the grains and ensuring that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that fresh mushrooms were excisable would not entitle the Revenue to recover duty, because, so long as the duty on fresh mushrooms under the Central Excise Tariff was Nil, in respect of DTA clearances of fresh mushrooms by a 100% EOU covered under the proviso to Section 3(1) of the 1944 Act would also be Nil. That decision of the Commissioner of Central Excise (Appeals) dated 27th May 2004 was admittedly accepted by the Revenue. Therefore, so long as the decision of the Commissioner of Central Excise (Appeals) dated 27th May 2004 was holding the field, all the adjudicating authorities including the Commissioner of Central Excise were bound by the said decision passed by the Commissioner of Central Excise (Appeals) dated 27th May 2004. The argument of the Revenue that the decision of the Commissioner of Central Excise (Appeals) dated 27th May 2004 rendered prior to the 2004 amendment to the 1985 Act would not be applicable after the 2004 amendment to the 1985 Act is without any merit, because, as noted earlier, fresh mushrooms were excisable prior to the 2004 amendment and continue to be excisable even after the 2004 amendment. Similarly, Excise duty on fresh mushrooms prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant which is reproduced below: 4.14 From the perusal of the Brochure it is evident that appellant is not supplying any silo simplicitor but is manufacturing and supplying the silo system capable of performing the unique function. Further to convince ourselves we also examined few purchase orders, which are reproduced below: 4.15 From the perusal of the purchase orders it is quite evident that the findings recorded in the impugned order that the appellant was supplying only silo per-se cannot be sustained. It is silo system which is capable of performing the assigned function is being manufactured and cleared by the appellant along with the associated accessories. It is settled position in law as per the Rule 2 (a) of the General Rules of Interpretation and clearly specified as per Section Note 3, 4 & 5 to Section XVI of the First Schedule to the Central excise Tariff Act, 1985 that essential character determines or the prime function of the machines, equipment interconnected or working in tandem will determine the classification of the said group of machines and equipment. HSN Explanatory Notes in respect of the Section XVI clearly states as follows: "(V) UNASSEMBLED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njectors, metering valves, etc., underground distribution and branchlines, and a surface network (heading 84.24). (4) Milking machines with separate component parts (vacuum pump, pulsator, teat-cups and pails) interconnected by hoses or piping (heading 84.34). (5) Brewhouse machinery comprising, inter alia, sprouting or germination machines, malt crushing machines, mashing vats, straining vats (heading 84.38). Auxiliary appliances (e.g., bottling machines, label-printing machines), are however not included and should be classified in their own appropriate heading. (6) Letter sorting systems consisting essentially of coding desks, pre-sorting channel systems, intermediate sorters and final sorters, the whole being controlled by an automatic data processing machine (heading 84.72). (7) Asphalt plant consisting of separate components, such as feed hoppers, conveyors, dryers, vibrating screens, mixers, storage bins and control units, placed side by side (heading 84.74). (8) Machinery for assembling electric filament lamps, of which the component parts are interconnected by conveyors, and which include equipment for the heat-treatment of glass, pumps and lamp-testing unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of galvanized steel iron, used for grain storage, ranging from 4.51 to 31.60 m in diameter with storage capacity from 50 to 15,000 tons, containing an indoor temperature control system which helps to identify the hot areas and insect activity. They are equipped with a bottom sweep auger which rotates 360° around its own axis to unload residual grains at the bottom of the silos. Radial and axial fans are used for aeration of stored material. Application of GIRS 1 and 6. "8479.89 9. Conical base silos, made of corrugated sheets of galvanized steel iron, used for grain storage, produced within a range of 45 - 65° base angle, containing an indoor temperature control system which helps to identify the hot areas and insect activity. Radial and axial fans are used for aeration of stored material. Application of GIRS 1 and 6." 4.17 Even Jurisdictional Chief Commissioner has expressed the opinion as follows in respect of the classification of the impugned goods as cleared by the Appellant as is evident from the following letter: 4.17 As per the above correspondence it is evident that Office of Chief Commissioner has agreed with the view as canvassed by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
