Arijit Pasayat, J. - (1.) CHALLENGE in this appeal is to the judgment of the Customs, Excise & Service Tax Appellate Tribunal, West Regional Bench at Mumbai (in short 'CESTAT') which dismissed the appeal filed by the appellant.
(2.) THE background facts in a nutshell are as under: The assessee is engaged in the manufacturing of machinery and parts thereof falling under Chapter 84 of Central Excise Tariff Act, 1985 (in short the 'Tariff Act'). Alleging that the assessee had mis-classified the following products, show cause notices were issued proposing to levy duty of Rs. 14,37,805/-. According to the revenue the relevant products were mis-classified as under; JUDGEMENT_792_TLPRE0_2007Html1.htm In the show cause notices, it was proposed to classify the goods mentioned at Sl. Nos. (i) to (iv) under Chapter Heading 8419.10 and Chapter sub-heading 8419.90 (for the parts) and the machine at Sr. No. (v) under Chapter sub-heading 8413.19 and parts thereof as 8413.99. It was proposed to classify the goods at Sr. No. (vi) under Chapter sub-heading No. 8421.10 and parts thereof under Chapter sub-heading No. 8421.90 and the items at Sr. No. (vii) under Chapter sub-heading 8422.80 and parts thereof under Chapter sub-heading 8422.90. All the machines according to the show cause notice are used as Heat Exchangers i.e. they are used for chilling, cooling and pasteurising purpose by process involving a change in temperature and as per the functions performed by these goods with respect to Chapter 84 of Explanatory Notes. It was, therefore, proposed to classify them in the aforesaid manner. The assessee submitted its reply and supported its classification. After considering the show cause notices, reply and personal hearing, the Assistant Commissioner, Central Excise & Customs confirmed the demand and made the following classifications. (i) Skid mounting type milk/cream pasteurizer (ii) Chilling plant (iii) Milk Cream Chiller (iv) Milk Cream pasteurizer Under Chapter sub heading No. 8419.10 and parts of the above machinery under chapter sub heading No. 8419.90 chargeable to duty @ 13% adv. (v) Milk/ cream/ghee pumps under chapter sub heading No. 8413.19 and parts thereof under CSH No. 8413.99 chargeable to duty @13% adv. (vi) Milk/Cream Separators under CSH No. 8421.10 and parts thereof under CSH No. 8421.90 @13% adv. (vii) Butter packing machine under CSH No. 8422.80 and parts thereof under CSH No. 8422.90 @ 13% adv.
(3.) ALL the four demands were confirmed involving a total demand of Rs. 14,37,805/- under Section 11A of the Central Excise Act, 1944 (in short the 'Act'). Penalty of Rs. 25,000/-was also imposed under Rule 173Q of Central Excise Rules, 1944 (in short the 'Rules'). The Commissioner (Appeals) confirmed the demand. So far as the levy of penalty is concerned, he set aside the penalty. The assessee took the stand before the CESTAT that items 1 to 7 are covered under Chapter heading 84.34 and for Sr.No. 8 under Chapter heading 8434.90. The authorities below applied Note No. 2 of Chapter heading 84 and HSN Explanatory Note excluding such items which are in the nature of pasteurizer/chiller etc. from the coverage under Chapter heading 84.34. Revenue supported the orders of the authorities below.;