1. Both of the appeals arising out of the order of the Collector(Appeals) are taken up for decision.
2. The appellants have filed a Miscellaneous Application in Appeal No.C/2433/86-B2 for admission of additional evidence, consisting of purchase order, order of confirmation, invoice and packing list. These documents forming part of the proceedings before the lower authority are not additional evidences. But, however, the appellants have produced a catalogue issued by the appellant based on the original suppliers' catalogue. This not being the catalogue produced before the lower authorities is not admitted, but the catalogue in original supplied by suppliers alone is taken for consideration.
In respect of the second contention, Shri M.C. Kothandaraman, Ld.
Consultant stated that he is not pressing for this concession and would be limiting the appeal only to the disputed classification. The Collector(Appeals) in his Order No. C3/188 & 234/1986 dated 23-04-1986 has disposed of two orders of the Assistant Collector, Order No.S-59/239/85 Ap.Gr.C. dated 09-12-1985 and Order No. S-49/155/85 Gr.E.dated 14-11-1985. The issue to be now resolved is whether the machine which was imported viz. 'Writegen Remixer Machine' is classifiable under Heading 84.23, 84.56 or 84.59. The assessment under 84.66 has not been pressed and is therefore not dealt with.
4. The machine as per appellants' contention is a compact and sophisticated device for excavation of roads, laying of mixed material and rolling of road surface all built into one compact piece. The machine excavated the roads with the help of Scarifier after heating the road surface with the help of infra red heater. After excavation the material travels into mixing unit(Pugmill) where new material is also added. The resulting new asphalt mix is then forced from the Pugmill in a window and spread over the heated level base by means of an auger. The remixer's combined tamping and vibrating screen then ensures that a level surface with a high degree of compaction is achieved. The classification under Heading 84.59(1) CTA at 60% plus 40% c.v. duty was decided on the following count by the Assistant Collector :- "The Heading 84.59(2) CTA reads as -'Machines and mechanical appliances designed for the production of a commodity....The importer's contention is that the machine in question is producing Asphalt, the machine which is mixing the old material excavated, with bitumen cannot be considered as a machine producing a commodity. Normally machines that produce commodities are installed in factories for the production of relative commodities. It is, therefore, not considered to be a machine as one producing a commodity. The functions of the remixer are several but not single.
The machine under reference, in addition to preparing Asphalt does various functions such as heating of the road, excavating, levelling of the road surfaces and tamping of the road surface. In this connection reference is made to certain machines that are meant for public works, building and the like, which are mentioned on page 1367 of the Customs Cooperation Council Nomenclature. The Remixer Machine falls in this category of machines as mentioned in the CCCN meant for public works. It is thus evident that this machine cannot be considered as a machine producing commodity. The machine in question is a 'Remixer' by the nomenclature itself. This machine in addition to its functions of, preheating, excavating, levelling and tamping, also perform the function of mixing of old materials with bitumen. After remixing, the material is spread on the road before the process of tamping is completed.
In view of the reasons set forth in the above findings, the Remixer Machine is assessable under Heading 84.59(1) CTA." The Collector(Appeals) has upheld classification under Heading 84.59(1) on the following count :- "As per the catalogue, the 'Remixer' is a self-propelled mobile unit which carries out part of the thermal and all the mechanical stages of the process except for the final compaction which is done by a conventional roller. The machine consists of :- Here the mixing of Asphalt (along with other old materials) cannot be considered as a machine producing a commodity and the original material remixed does not lose their identity. Hence, it falls outside the purview of 84.59(2) C.T. A. C.C.C.N. Explanatory Notes under 84.59(Page-1367) reads 'Machines whether or not self-propelled, for spraying gravel on road or similar surfaces and self-propelled machines for spreading and tamping bituminous road surfacing materials." 5. In their appeal before the Tribunal the appellants have submitted the following salient features of the machine :- (ii) Extraction of inplace material from the complete surface of the road with the aid of scarificing and profiring, (iii) Recycling of old material by adding in pre-determined proportion in the heated pugmill mixer; (iv) Ready mixed product to be delivered for laying on the surface with adjustable screed with sweeper; Further, the machine in question consists of the following assemblies and sub-assemblies/units in-built to carry out the manufacturing activities:- A. The front hopper is used for receiving the new raw-material which is transferred via a surge hopper and a measuring gate by a heated variable speed conveyer to the rear of the machine; B. The heating tanks of infra-red heaters, spaced through the machine having a capacity of a heat out-put of 2088640 kilo/hours.
These heating tanks are of revolving type having individual burners with on and off mechanism; C. Scarifying beam fitted with barrow type teeth attached to the machinery evenly distributed over the transfer section. The solidified heated mix is loosened by this unit. Then lifts the heated material between them and allow any recycling agent to be thoroughly mixed with a pugmill type action; D. A heated bitumen tank and pump with heated lines heading to a metering pump over the scarifiers. The metering pump, pumps the recycling agent with forward speed of the machine; E. Electronic controls at the rear of the machine. These are used for controlling automatically the quantities of the bitumen and new asphalt mix at the predetermined proportions by setting the metering pump and conveyor speeds to vary with the forward speed of the machine; F. Automatic grade and slope control unit which maintains proper camber and slope; H. The turn reversible sugers spreads the remixed material across the width of the spreader box; I. ABS vario screed and tamping unit which consolidate the remixed material into one homogeneous material; J. Two hydraulically actuated rotating crushers fitted at the rear.
They claim assessment under Heading 84.23 C.T.A. and invoke Rule 3(a) of the Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975, by which the heading which provides specific description shall be preferred to a heading providing a general description. Heading 84.23 which is specific will be preferable to Heading 84.59(1). Their claim for assessment under Heading 84.23 or 84.56 is on account of the following facts:- "The machine performs four main functions, namely, excavating, levelling, tamping and mixing. The first three functions are Heading 84.23 and the other is covered by Heading 84.56. Applying the guideline given in the explanatory note for these headings and read with the guidelines for assessment of multipurpose machine referred to above, the machine in question will be eligible for assessment under Heading 84.23 or 84.56 depending upon the function/functions that can be considered as the main function of the machine.
Out of the four main functions of the machine listed i.e., excavating, levelling, tamping and mixing, three functions are covered by the Heading 84.23. The appellants were therefore claiming assessments of the machinery under that heading right from the date of filing the bill of entry. Even if it is considered that the main function of the machine is that of a unit as a remixer recycling in situ unit, the correct classification would be Heading 84.56. The rate of duty applicable under this heading is the same as that of 84.23." The appellants have further contended that the reasons for not applying the Heading 84.59 for the goods were on account of the fact that "the Heading 84.59 covers machines and mechanical appliances having individual functions. The word individual, according to the Webster's New 20th Century Dictionary - unabridged - second edition, means a single person or thing i.e., one at a time or single distinct function.
The machine for being classified under this heading should perform a single function as opposed to multiple functions. A chain cutter is a device which is mounted on an industrial sewing machine and which automatically cuts the thread so that the machine can run without interruption. This device is said to perform an individual function because it plays no part in the sewing function of the machine. As there is no other specific heading, the chain cutter when imported separately, falls to be classified under Heading 84.59 vide example under Chapter Note-B of Heading 84.59.
The remixer in question as illustrated in the catalogue performs multiple functions and as such falls clearly outside the ambit of 84.59. The functions performed by this machine are clearly specified in Headings 84.23 and 84.56 and so this machine has to be taken outside the scope of 84.59 according to section note and chapter notes of the Customs Tariff.
Moreover 84.59 is a residuary item which specifically excludes machines and mechanical appliances falling within any other heading of Chapter 6. Shri M.C. Kothandaraman, Ld. Consultant, appeared on behalf of the appellant. He reiterated the grounds of appeal for classification under Heading 84.23 or 84.56 C.T.A. and stated that he did not press for the concessional rate under 84,66 applicable to project imports.
The Collector (Appeals) has not considered the classification under Heading 84.23 as it was a fresh claim not agitated before the lower authority, but has, however, discussed its non-applicability under the Heading 84.23 as it is a multi-purpose machine, and classification will be according to the principal function, but applicable to Heading 84.22 with those of Heading other than 84.23 CTA. The Ld. Consultant contested the above finding of the Collector(Appeals) and stated that machine had a belt conveyor system which would come under Heading 84.22, and being a multi-purpose machine performing the functions: excavating, heating and tamping, among the other functions -mixing, pre-heating. Therefore, with three of the functions enumerated in Heading 84.23, its classification under Heading 84.23 was appropriate.
He further contended that classification of goods can be raised at any stage of proceeding as held in the Tribunal's order in 1984 (17) ELT 368 - Collr. of C. Ex., Kanpur v. West Glass Works, Firozabad. He further contended that even assuming that the claim for assessment under 84.23 was not agitated before the Assistant Collector, the claim now made was still within the time limit under Section 27 of Customs Act as duty was paid on 19-10-85 and the appeal was filed on 22-02-1086. He further contended that the appellant had declared in the Bill of Entry the Heading for purpose of assessment under 84.23 which was scored by the department and written as 84.59, as such he submitted that the appellants had all along been requesting for classification of their machine performing multi-purpose functions under Heading 84.23.
Alternatively, he suggested the classification under Heading 84.56 as it was a mixing machine, it was a re-mixer re-cycling in situ unit and since that was the main purpose of the machine, it would fall under 84.56. The Heading 84.59 was a residuary item and only such of these machines which do not fit into any other heading are liable to be classified under Heading 84.59 and the Collector(Appeals) has not given a specific finding for assessment under Heading 84.59(1). He referred to the Supreme Court's decision in Bharat Forge & Press Pvt. Ltd. v.Collr. of C. Ex. -1990 (45) ELT 525 (SC): "Classification of goods under residuary Entry - Criteria - Under a residuary entry only such goods are covered which cannot be brought under the various specific entries in the Tariff. In other words unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item".
7. Shri M.K.Sohal, Ld. JDR in the process of eliminating the alternative classification under Heading 84.23 and 84.56, stated that for the purpose of classification under 84.23, the Heading covered, excavating, levelling, tamping etc. The excavating was not mentioned anywhere in the catalogue, and is different from scarifying and there is no clear evidence how the levelling or tamping is done for assessment under Heading 84.56, the appellant has not agitated before the Collector (Appeals) for assessment under this heading and has been raised for the first time and moreover the Heading 84.56 will not apply as the mixing process is for the purpose of mixing earth, stories etc.
which is different from the mixing done by the machine under reference.
The CCCN page-1367 which specifies the type of machines for public works falling under Heading 84.59 exclude mixers.
The classification under Heading 84.59(1) was the appropriate classification in view of the individual function it performs of road making, which is specifically mentioned at page-1367 of the BTN.Explanatory Notes and Heading 84.59(2) will not be applicable as that Heading is specific for production of commodity, and in respect of the present machine, no commodity is manufactured.
8. The submissions made are considered. The machine as per the invoice imported is one complete 'Writegen Remixer Machine' with Cat water cooled diesel engine with other devices like: Vibratory and Tamping Screed, bitumen spraying device and with Pugmill mixing. The Remixer Design is a self-propelled mobile unit which carries out the thermal and all the mechanical stages of the process except for the final compaction, which is done by a conventional roller.
The asphalt surface course is heated and then completely plasticised by the Remixer's infra red heaters which are an integral part of the machine. The temperature is controlled by raising and lowering the heater banks and by varying the pressure across the heater banks. The surface is loosened down to the required depth by means of scarifying tynes which have automatic depth control. The material is then planed off by a levelling blade and fed to the middle of the machine by an auger. This results in the formation of a level base.
The material mass is then fed into a compulsory pugmill mixer where it is thoroughly mixed with the addmix fed In from the top and if necessary with a bitumen recycling agent.
The resulting new asphalt mix is forced from the pugmill in a windrow and spread over the heated level base by means of an auger. The Remixer's combined tamping and vibrating screed then ensures that a level surface with a high degree of compaction is achieved. The screed has slope and grade control.
After final rolling the resurfacing process is complete having achieved the desired asphalt mix characteristics and surface texture.
This is a multi-purpose machine. As per Section Note 3 of Section XVI BTN and the Customs Tariff Act of India which is reproduced below :- "Unless the Headings otherwise require, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function".
Similarly, in respect of multi-purpose machines and combination of machines, the Chapter notes under Chapter 84 specified as follows :- "In general, multipurpose machines are classified according to the main purpose and main function of the machine.
Composite machine consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary are classified according to the main purpose of main function of composite machine e.g. printing machines with a subsidiary machine for folding the paper (Heading 84.35)".
Therefore, the parameters set forth for classification are that the machine which performs the principal function or the main purpose in a composite machine will decide the heading under which the principal function or main purpose has been mentioned. The machine imported is a Remixer. The material excavated by the Scarifier is heated and mixed in a pugmill alongwith a new material bitumen and the resulting asphalt mix is spread. The tamping and vibrating device ensures level surface.
The Assistant Collector in his order has observed: "The machine in question is a 'Remixer' by the nomenclature itself. This machine in addition to its functions of; pre-heating, excavating, levelling and tamping also performs the function of mixing of old material with bitumen. After remixing the material is spread on the road before the process of tamping is completed".
The purpose of the machine in the main is that it is a mixer, the Heading 84.56 refers to mixing. The extract of the Heading is as under :- "Machinery for sorting, screening, separating, washing, crushing, grinding or mixing earth, stones, ores or other mineral substances, in solid (including powder and paste) form; machinery for agglomerating, moulding or shaping solid mineral fuels; ceramic paste, unhardened cements, plastering materials or other mineral products in powder and paste form; machines for forming foundry moulds of sand".
The heading as per BTN Explanatory Notes, page-1353 covers machinery of a kind used, mainly in the extractive industries and also covers machinery for mixing mineral substances, Sl. No. 6 page-1356 which is reproduced below :- "Machines for mixing mineral substances (crushed or broken stone, gravel, limestone, etc.) with bitumen, for preparation of bituminous road-surfacing materials".
Mixing with bitumen for preparation of bituminous road surfacing materials would get covered by this heading. It can, therefore, be held that the main purpose or function of the machine being mixing, the other functions are complementary and the machine would correctly fall under Heading 84.56. The Tribunal has already laid the principle that classification being a question of law can be raised at any stage of proceeding -1984 (17) ELT 368 (Tribunal), Collector of Central Excise v. West Glass Works, Firozabad.
9. Since the Heading 84.56 is found to be more appropriate, the classification under Heading 84.23 is not preferred, moreover the type of functions mentioned in that Heading are not the main functions. The lower authorities have held the Heading 84.59(1) as the more appropriate classification in view of the CCCN Explanatory Notes under 84.59 (page-1367) which is for "Machines whether or not self-propelled for spraying gravel on roads or similar surfaces and self-propelled machines for spraying and tamping bituminous road surfacing materials".
While II(F)(2) & (3) under the Explanatory Notes of BTN page-1367 are for road making machines, it is seen that the machine "The Remixer" has provision for mixing in a pugmill and with addition of new material the same is spread on the surface, it is a combination with a device to prepare the material and then get it spread by the Remixer's combined tamping and vibrating, it is not doing the sole individual function of road surfacing. Therefore, its classification under 84.59(1) gets excluded.
10. Consequently the classification under Heading 84.56 being more appropriate, the residuary heading under 84.59(1) which has been upheld by the respondent, is set aside. The appeal is, therefore, allowed with consequential benefit to the appellants.