Classification of rice par-boiling machinery
NEARLY four years ago, after a detailed examination, the Board had come out with a Circular No. 924/14/2010 -CX dated 19.05.2010 clarifying that Rice parboiling machinery and drier which are essentially for use in conjunction with the rice mill will merit classification under heading 8437. Admittedly, the Tariff Rate of duty for this heading is Nil.
Incidentally, this clarification was issued pursuant to a representation made by the Rice Mill Machinery Manufacturers Association that the practice so far followed by the department was not to charge excise duty for many years but suddenly it has been sought to charge duty on these machines by proposing classification under heading 8419.
Now, the Board has had a re-think consequent to a decision dated 15.03.2011 of the CESTAT, Delhi in the case of M/s Jyoti Sales Corporation 2011-TIOL-1498-CESTAT-DEL wherein the Bench had after bringing out a subtle distinction in the goods under reference vis-à-vis that discussed in the Board Circular dated 19.05.2010 concluded that par-boiling plant and drier plant are rightly classifiable under heading 8419.
So, after more than three years, the CBEC shifts the goalpost and says that rice par-boiling machine and dryer would merit classification under CETH 8419 as per Note 2 to Chapter 84.
The earlier Circular No. dated 19.5.2010 is rescinded by the Board and it is directed that classification of rice par-boiling machine and dryer should be made under CETH 8419.
Interestingly, the CBEC also instructs the field formations to take necessary action to protect the revenue interest in respect of past clearances .
But has the CBEC missed taking note of this decision in M/s Jyoti Sales Corporation ?
Circular No. dated 15th May, 2014.