In Excise Miscellaneous Application (CT) No. 40064 of 2023 -CESTAT- CESTAT (Chennai) classifies Chick Drinker, Auto Feeder, and Poultry Cage as ‘Poultry Keeping Machinery’ with ‘Nil’ duty rate
Members Sulekha Beevi (Judicial) & M. Ajit Kumar (Technical) [21-06-2023]

Read Order: Autotex Private Limited v. The Commissioner of GST & Central Excise

Chahat Varma

New Delhi, June 26, 2023: The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal has ruled that the products manufactured by Autotex Private Limited (appellant), namely Chick Drinker, Auto Feeder, and Poultry Cage, should be considered as ‘poultry keeping machinery’. The Tribunal determined that these products were classifiable under CETH 84361000, which attracted a 'nil' rate of duty.

The appellant in this case was involved in the manufacturing of excisable goods such as Auto feeder, Chick Drinker, and Poultry made of plastics. The department raised concerns regarding the classification of these products, asserting that they did not have any mechanical function and should be classified under different headings. Specifically, they argued that the goods should be classified under 3926 (Auto feeder, Chick drinker) and 3923 (Poultry cage) instead of 8436. After due process of law, the original authority reclassified the goods under 3926 and imposed duties, interest, and penalties accordingly. The appellant appealed against this decision, but the Commissioner (Appeals) upheld the order of the original authority.

The bench observed that the adjudicating authority, in determining whether the items in question should be classified as ‘machines’, relied on the dictionary meaning of the term. However, the bench noted that the Commissioner should not have resorted to the dictionary meaning and external sources when the HSN Explanatory Notes provide a specific meaning for the term ‘machine’.  It was observed that in para-B of Section Note XVI-(General), it was mentioned that goods even if made of plastics would fall into the meaning of machines.

The bench further observed that the HSN Explanatory Notes to Chapter 84 clearly categorize heading 8436 as industry-specific. This particular heading encompasses various types of machinery related to agriculture, horticulture, forestry, poultry keeping, and bee-keeping. It includes machinery such as germination plants fitted with mechanical or thermal equipment, poultry incubators, brooders, and other similar equipment. The specific sub-heading 8436.10 pertains to poultry-keeping machinery. Additionally, heading 8436 also includes the parts and components of such machinery.

Thus, the bench concluded that the duty demand, interest, and penalty imposed on the appellant could not be sustained.