Shirke Structurals Pvt. Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the question for consideration in this appeal is the classification of grain driers manufactured by the appellant. in the order impugned in this appeal, the commissioner (appeals) has confirmed the classification of this product under heading 84.19 of the tariff, not accepting the manufacturer's claim for classification under heading 84.37.2. the article in question consists essentially of a tray and heater.the substance to be dried - grain, oilseed, etc. - is kept in a tray and heated by means of circulating air heated by an oil-fired heater.the object of the machine is to dry grain and seed. the two heading in question reads as follows. "84.19 machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilisation, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non electric". "84.37 8437.00 machinery 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".3. the contention for the counsel for the appellant is that only that machinery which causes a simple change of temperature or causes the transformation of material resulting principally from temperature change will fall under this heading. the machine in question, he says, does not fulfill either one of these requirements, which is specified at page 1271 of the explanatory notes to the harmonised commodity coding system of the customs co-operations council.4. we are not able to agree that the "transformation of the material" referred to the explanatory notes does not necessarily mean that the material which is subjected to heating should so completely lose its identity by being subjected to the change in temperature that it is no longer recognisable as it was. the examples given in the explanatory notes of drying, cooling etc. themselves clearly indicate this to be the case. the s a transformation of the grain from moist to dry grain is, in our opinion the kind of transformation that is contemplated by the notes. in fact, the explanatory notes specify as classifiable in this heading dryers for various purposes. sub-heading 31 is specifically "driers for agricultural products". although our tariff does not have this specific sub-heading, the fact that the heading is identically worded as that in the h.s. n. notes shows that such driers would be classifiable in this heading, although in a different sub-heading.5. the heading claimed by the manufacturer in any case could not apply.it includes the machinery used in the milling industry, which is what the present machine is stated to be. the explanatory notes to this heading indicate that such machinery is essentially that used for treatment of grain prior to milling, e.g. machines for mixing or preparing grain, grinding or crushing machinery, machines for sorting or crushing flour. this criterion therefore excludes classification under this heading. further, according to the appellant's own literature the machine is used not only to dry grain but other products that are clearly outside the scope of the milling industry, such as oilseeds and seeds. the possible locations for its use such as distilleries, seed processing plant also indicate that it has applications outside the milling industry.

Judgment:
1. The question for consideration in this appeal is the classification of grain driers manufactured by the appellant. In the order impugned in this appeal, the Commissioner (Appeals) has confirmed the classification of this product under heading 84.19 of the Tariff, not accepting the manufacturer's claim for classification under heading 84.37.

2. The article in question consists essentially of a tray and heater.

The substance to be dried - grain, oilseed, etc. - is kept in a tray and heated by means of circulating air heated by an oil-fired heater.

The object of the machine is to dry grain and seed. The two heading in question reads as follows.

"84.19 Machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilisation, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non electric".

"84.37 8437.00 Machinery 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".

3. The contention for the counsel for the appellant is that only that machinery which causes a simple change of temperature or causes the transformation of material resulting principally from temperature change will fall under this heading. The machine in question, he says, does not fulfill either one of these requirements, which is specified at page 1271 of the Explanatory Notes to the Harmonised Commodity Coding System of the Customs Co-operations Council.

4. We are not able to agree that the "transformation of the material" referred to the Explanatory Notes does not necessarily mean that the material which is subjected to heating should so completely lose its identity by being subjected to the change in temperature that it is no longer recognisable as it was. The examples given in the Explanatory Notes of drying, cooling etc. themselves clearly indicate this to be the case. The s a transformation of the grain from moist to dry grain is, in our opinion the kind of transformation that is contemplated by the notes. In fact, The Explanatory Notes specify as classifiable in this heading dryers for various purposes. Sub-heading 31 is specifically "Driers for agricultural products". Although our tariff does not have this specific sub-heading, the fact that the heading is identically worded as that in the H.S. N. notes shows that such driers would be classifiable in this heading, although in a different sub-heading.

5. The heading claimed by the manufacturer in any case could not apply.

It includes the machinery used in the milling industry, which is what the present machine is stated to be. The Explanatory Notes to this heading indicate that such machinery is essentially that used for treatment of grain prior to milling, e.g. machines for mixing or preparing grain, grinding or crushing machinery, machines for sorting or crushing flour. This criterion therefore excludes classification under this heading. Further, according to the appellant's own literature the machine is used not only to dry grain but other products that are clearly outside the scope of the milling industry, such as oilseeds and seeds. The possible locations for its use such as distilleries, seed processing plant also indicate that it has applications outside the milling industry.