By TIOL News Service

CHENNAI, FEB 11, 2016: THE appellants have imported "Paddle Wheel Aerators" and parts and classified under CTH 84368090 and the same were cleared on payment of appropriate duty. During post Audit of the B/Es, the department raised objections on classification of the said goods as agricultural machinery. Accordingly, demand notices were issued for reclassification under 8479 and 8999 and demanding differential duty. The Dy. Commissioner of Customs in his order, classified ‘Paddle Wheel Aerators' under CTH 84798999 and parts under CTH 84799090 and confirmed the differential duty along with interest. The Commissioner (Appeals) upheld the order of the lower adjudicating authority. Hence this appeal.

After hearing both sides, the Tribunal held:

+ As regards the revenue's contention that machinery for aquaculture does not fall within the scope of meaning of agriculture, we find that the meaning of agriculture covers not only cultivation of land and growing crops but includes animal husbandry, raising of live stock etc. The very fact, Govt. of India, Ministry of Agriculture enacted Coastal Aquaculture Authority Act, 2005 and the Regulatory Authority was created under this Act, which deals with improvement of Aqua farmers in shrimp farming and fisheries. This confirms that aqua farming by farmers is integral part of agricultural activity.

+ The definition of "farmer" given in National Agricultural Policy for Farmers, 2007 includes poultry, live stock rearers, fisherman, bee-keepers, pastoralists etc. The aqua culture, aqua farming, shrimp farming are synonyms of fishery. The above definition is issued under the provisions of Act for framing the Agricultural Policy and it is binding on other departments including customs. Since there is no dispute that the paddle wheel aerators used in aqua farming by aqua farmers for cultivation of fish/shrimps etc., these are rightly to be considered as other agricultural machineries and rightly classifiable under Ch. 84368090. When the item can be classified by specific description with specific function as other agricultural machines, the question of classifying the goods under residual entry "8479" is not justified and not acceptable. In view of the above findings, it is held that the impugned goods "paddle wheel aerators and its parts" are rightly classifiable under Ch. 84368090 of CTA and not under Ch. 84799090 and eligible for exemption. Therefore, the differential duty demanded is liable to be set aside.

(See 2016-TIOL-385-CESTAT-MAD)