Customs | Counter Vailing Duty Not Applicable On Import Of Pan Masala Processing Machines: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Counter Vailing Duty (CVD) is not applicable on import of pan masala processing machines. Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) stated that the assessee is the manufacture of the PanMasala and has imported the machines for cutting / grinding / sorting of Areca Nuts (Supari/seed), the raw material of the Pan Masala. From the description of the three of the machines it becomes apparently clear that assessee has imported machines for carrying out such functions only as are specifically mentioned under CTH 8437200. The assessee/appellant filed Bill of Entry (BOE) for clearance of machines imported by the assessee. During the test check of Bill of entry (BOE), in audit, it was observed that the appellant /importer imported the machines for their Areca Nut Plant declaring the Custom Tariff Heading CTH No. 84371000, for which the Counter Vailing Duty (CVD) is at the rate of 0%. However, the department opined that the said CTH is for the machines which are meant for cleaning, sorting or grading seed, grain or dried leguminous vegetables whereas the machines imported by the assessee were for being used in crumbling or processing Areca Nuts (commonly known as supari), for production of Pan Masala. As per department, the imported machines were actually classifiable under CTH 84798200 for which the effective rate of Counter Vailing Duty (CVD) is at the rate of 12.5%. A show cause notice was served upon the assessee and the demand was confirmed through an order. The assessee field an appeal to Commissioner (Appeals) against the order which was dismissed. The Commissioner (Appeals) held that the imported machines are classifiable under different CTH i.e. 84798200. The assessee submitted that the BOE had rightly classified three of the imported machines under CTH 84371000 as these are the machines meant to crush/ sort/ crumb etc. the seeds (Areca Nuts). The Tribunal observed that the CTH proposed under show cause notice and also those as confirmed under Order are with respect to the machineries which are not specified or included elsewhere in the tariff but are meant for general use or for the industrial preparations or manufacture of food or drinks or such machines whose individual functions are not specified anywhere. But from the literature about imported machines as produced by the assessee it is clear that three of these machines are meant for sorting/cutting, grinding etc. the seeds/grain/dried leguminous vegetables which are specifically mentioned under CTH 8437200, noted the bench. The bench opined that the machine imported are such as specifically mentioned in CTH 8437. Hence, the classification proposed in the show cause notice is wrong. The classification as held by the adjudicating authority is also wrong. In view of the above, the Tribunal allowed the appeal. Case Title: M/s. Dharampal Satyapal Ltd. v. Commissioner of Customs – New Delhi Case Number: Customs Appeal No. 51630 of 2022 Counsel for Appellant/ Assessee: Jayant Kumar Counsel for Respondent/ Department: Rajesh Singh Click Here To Read/Download The Order

Customs | Counter Vailing Duty Not Applicable On Import Of Pan Masala Processing Machines: CESTAT

Mehak Dhiman

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