Holding

The Can Filler, Fruit Feeder and Ripple Machine are independent ready‑assembled units, not accessories, and must be classified under headings 84.19 and 84.30(1) and are liable to CVD.

Summary

Mis Nirulas Corner House Pvt. Ltd. imported a continuous ice‑cream freezer together with machines described as Can Filler, Fruit Feeder and Ripple Machine. The importer claimed the latter were merely accessories to the freezer and should be classified under heading 84.15(1) of the Customs Tariff Act, attracting no counter‑vailing duty (CVD). The Customs authorities classified the three machines as independent ready‑assembled units under headings 84.19 and 84.30(1) and levied CVD under Central Excise Tariff Item 68. The appellant’s refund claim was rejected, and the appeal before the Collector and the CEGAT was dismissed. The Supreme Court examined the literature and found that each machine could operate independently, was not merely an accessory, and therefore must be taxed under the higher tariff headings. The Court upheld the classification and dismissed the appeal.

Issues considered

Whether the Can Filler, Fruit Feeder and Ripple Machine are accessories to the continuous ice‑cream freezer or independent machines for customs tariff classification.
Whether the machines fall under heading 84.15(1) of the Customs Tariff Act or under headings 84.19/84.30(1) and are liable to counter‑vailing duty under Central Excise Tariff Item 68.

Legislation cited

Central Excise and Salt Act, 1944
Customs Tariff Act, 1975s. 2, s. 3

Subjects

customs classificationcounter‑vailing dutyaccessories vs independent machinesice‑cream equipmenttariff headingsCustoms Tariff ActCentral Excise

Judgment

- MIS NIRULAS CORNER HOUSE PVT. LTD.
v.
COLLECTOR OF CUSTOMS, BOMBAY
A

APRIL 28, 1999

[A.P. MISRA AND R.P. SETHI, JJ.] B

Customs Tariff Act, 1975-Sections 2 and 3 Headings 84.15, 84.19,
84.26, 84.30 (I) & 84.59(2) Applicability of-Jn classification of Can Filler,
Fruit Feeder and Ripple Machine-These machines imported under a single
order together with continuous ice cream freezer-Held, these machines were C
independent and not accessories as claimed by the appel/ant-,-Hence, rightly
classified under Heading 84.19 and 84.30(1) and not under Heading 84.15
and liable to CVD under Excise Tariff Item 29-A(J)-Further, continuous ice
cream freezer rightly classified under Heading 84. 15-Excise-Central Excises
and Salt Act, 1944, Items 29-A(J) and 68. D
Appellant had imported under one single order in its single consignment
of plant and machinery namely, "continuous ice cream freezer and alleged
accessories such as Electronic Doser, Can Filler, Fruit Feeder and Ripple
Machine". According to the appellant, the main function of the machines
imported was to make ice cream. The ice freezer was said to be refrigerating E
equipment classified as such under heading 84.15(1) of the Customs Tariff
Act. None of the aforesaid so-called accessories could function independently.
Being refrigerating machinery the imported machines were claimed to be
not dutiable and that no countervailing duty under Tariff No. 68 of the
Central Excise Tariff was attracted, the appellant filed refund claim before F
the Customs Department. The Assistant Collector rejected the claim of the
appellant. The appeal preferred before the Collector (Appeals) and Appellate
Tribunal were also rejected. Hence this appeal.

It was contended by the appellant that the said articles were not
independent machines but were accessories; if these machines could not be G
classified under 84.15(1) then they could be classified under Heading 84.26
or 84.59(2).

Dismissing the appeal, this Court

HELD : 1.1. It is not disputed that the appellant had imported machines H
919
920 SUPREME COURT REPORTS (1999] 2 S.C.R.

A and spare parts for the purposes of making ice cream. It is also not denied ;-
that ice cream freezer is a refrigerati~g equipment classified under heading
84.15. There is no dispute regarding the payment of duty and CVD in respect
of continuous ice cream freezer. The dispute relates to the payment of the
duty with respect to the Can Filler, Fruit Feeder and Ripple Machine. Sub
B item (I) of Tariff Item No. 29-A deals with refrigerating and Air Conditioning
appliances and machinery which provides that refrigerator and other
refrigerating appliances shall be such appliances which are ordinarily sold
or offered for sale as ready assembled units such as ice makers, bottle
coolers, display cabinets and water coolers. Continuous ice cream freezer
C was, therefore, rightly assessed under the aforesaid entry.
(921-H; 922-A-B]

1.2. A perusal of the Xerox copies of the literature relating to Can
Filler, Fruit Feeder and Ripple Machine, it is seen that all such machines
are independent and not accessories. The mere fact that the so-called
D machines can be connected with freezers would not change their character
to being independent machines. The aforesaid machines are intended only to
give better production of the ice cream. It cannot be said but for those
machines freezer cannot be utilised for the purpose of the manufactures of
the cream. The purpose of the aforesaid machines is to facilitate in filling
E the tubes with ice cream or one or two-three flavours, add fruit syrups,
chocolate etc. to produce multi flavoured product. (923-D-E]

Collector of Customs v. Enfield India Ltd., (1991) 51 ELT 172 SC,
distinguished.

F Joy Ice Cream, Bombay v. Union of India, (1989) 39 ELT 521,
distinguished.

1.3. The statutory authorities under the Customs Tariffs Act and the
Tribunal, are justified, holding that the Can Filler, Fruit Feeder and Ribble
Machine are independent machines and not accessories as claimed by the
G appellant. [923-H; 924-AJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 138of1986.

From the Judgment and Order dated 23.5.85 of the Central Customs
Excise and Gold (Control) Appellate Tribunal, New Delhi in A. No. C.D. (SB)
H A.No. 695/83-B in order No. 390of1985-B.
NIRULAS CORNER HOUSE PVT. LTD. v. COLLECTOR OF CUSTOMS [SETHI, J] 921

Sajan Nandini, Ms. Andini and Ms. Rajni Natarajan for the M/s. JBD A
& Co. for the Appellant.

Bhaskar Gupta, Dilip Tandon, P. Parmeswaran and V.K. Venna for the
Respondent.

The Judgment of the Court was delivered by
B

SETHI, J. The short point in controversy is as to whether, Can Filler,
Fruit Feeder and Ripple Machine are accessories to the continuance ice cream

-- freezer or are independent machines covered by Chapter 84.19 and 84.30( l ).
The Customs, Excise and Gold (Control) Appellate Tribunal (for short CEGAT)
held that the three items did not merit classification under heading 84 .15( l)
C

and dismissed the appeals. Not satisfied with the judgment of the CEGAT the
assessee has preferred this appeal reiterating all pleas which were negatived
by the Appellate Tribunal.

The appellant had imported under one single order in its single D
consignment of plant and machinery namely, "continuous ice cream freezer
add with alleged accessories such as Electronic Doser, Can Filler, Fruit Feeder
and Ripple Machine with spare parts." According to it, the main function of
the machines imported is to make ice cream. The ice freezer is stated to be
refrigerating equipment classified as such under heading 84.15( I) of the E
Customs Tariff Act. None of the aforesaid so-called accessories can function
independently as each of them has reportedly been specially made to be
connected and to work along with the ice-cream freezer. Being refrigerating
machinery, the imported machines are stated to be not dutiable. Countervailing
duty under Tariff Item No. 68 of the Central Excise Tariff is not attracted.
Feeling that the appellant was not liable to pay the duty, the refund claim for F
Rs. 3,44,986.55 was filed before the authorities of the Custom Department in
the year 1980. The Assistant Collector of Customs vide his Order dated
12.11.1981 rejected the claim vide Annexure 'C'. The appeals preferred before
the Appeal Collector and Appellate Tribunal were rejected on 31.1.1983 and
23.5.1985 respectively.
G
We have heard the learned counsel appearing for the parties and perused
the relevant record. It is not disputed that the appellant had imported machines
and spare parts for the purposes of making ice cream. It is also not denied
that ice-cream freezer is a refrigerating equipment classified as such under
heading 84.15. There is no dispute regarding the payment of the duty and H
922 SUPREME COURT REPORTS [199~] 2 S.C.R.

A CVD in respect of continuous ice cream freezer. The dispute relates to the
payment of the duty with respect to the Can Filler, Fruit Feeder and Ripple
Machine. Sub item (1) of Tariff Item No. 29-A deals with refrigerating and Air
conditioning appliances and machinery which provides that refrigerators and
other refrigerating appliances shall be such appliances which are ordinarily
B sold or offered for sale as ready assembled units such as ice makers, bottle
coolers, display cabinets and water coolers. Continuous ice cream freezer was,
therefore, rightly assessed under the aforesaid entry.

c
The appellant had originally claimed re-assessment of the entire
consignment under heading 84.15(1) at the rate of 40 per cent with levy of
CVD. But later on submitted that if those could not be classified under the
said heading, they be classified as different items. Can Filler, Fruit Feeder and
--
Ripple Machine were stated to be covered under heading 84.26 or 84.59(2).
The appellant did not produce original catalogue literature or working manual
of the machines but relied upon Xerox copy of some literature before the
Assistant Collector of Customs who after examination of such material rightly
D
found:-

"However from Xerox copy it is seen that sketch as revealed in xerox
copy goes to show that this is a independent ready assembled unit
having caster for universal movement and therefore does not require
E erection at site. This unit can be moved from place to place without
any necessity of erection at sight. Therefore this item requires to be
classified according to its function independently. This item has
therefore been correctly classified u/h 84.30 ( l) with CVD u/i 68 CET.
the fourth item is "Can Filler" which has been assessed u/h 84.19 @
F 60% plus 15% plus CVD 8% u/i 68 CET. In this case also applicants
have produced zerox copy of some extract of literature. According to
this, the can filler can be directly linked to and or more continuous
freezers to fill tube with ice cream of one, two or three flavours. It is
therefore evident that this can filler is capable of working in line with
ice cream manufacturing plant. However, this can filler is ready
G independent unit having firm stand. It does not require any sort of
erection for its working though this unit can work in line with ice
cream manufacturing plant. As such this has been correctly assessed
u/h 84.19 with CVD u/i 68 CET according to its function. The fifth item
"Ripple Machine" has been assessed to duty @ 60% plus 15% plus ~
H 8% CVD u/i 68 CET. Here also xerox copy of some extract ofliterature
•
NIRULAS CORNER HOUSE PVT.LTD. v. COLLECTOR OF CUSTOMS [SETHI, J.] 923
is produced. According to the literature, the Ripple Machine will add A
fruit syrups, chocolate etc. to ice cream being fed directly from the
continuous freezers to produce. This machine consists of a sturdy,
positive piston pumps with electric motor, speed variator and reducer,
hopper to hold the ripple sauce and a mixer/distributor head for
feeding the sauce in such a way that a stripped effect is achieved with B
the finished product. From the sketch of the machine it is seen that
it is an independent ready assembled unit having firm stand requiring
no erection at sight for its functioning though it can also be linked
and worked with continuous freezer,"

The learned counsel appearing for the appellant took great pains to C
satisfy us that the Can Filler, Fruit Freeder and Ripple Machine were not
independent machines but accessories. However, in view of the findings of
the authorities based upon the working of the machines, we cannot accept
his submissions. We have also perused xerox copies of the literature relating
to the aforesaid machines and find that all such machines are independent
and not accessories. The mere fact that the so-called machines can be D
connected with freezers would not change their character of being
independent machines. The aforesaid machines are intended only to give
better production of the ice cream. It cannot be said that but for those
machines freezer cannot be utilised for the purpose of the manufacture of the
ice cream. The purpose of the aforesaid machines is to facilitate in filling the E
tubs with ice cream of one or two-three flavours add fruit syrups, chocolate
etc. to produce multi flavoured product. The reliance of the learned counsel
for the appellant on Collector of Customs v. Enfield India Ltd., (1991) 51 ELT
172 SC is misplaced inasmuch as, the order of the Tribunal was set aside, "in
the facts and circumstances of the case." The argument in that case was that
there was possibility of the goods falling under different categories which is F
not the position in the instant case. Similarly, the judgment in Joy ice Cream,
Bombay v:.. Union of India, (1989) 39 EL T 521 Bombay does not in any way
advance the case of the appellant. In the case it was found that the freezer
imported was meant to be utilised as part of ice cream manufacturing plant
which had no utility by itself. As already noticed the alleged accessories G
being Can Filler, Fruit Feeder, and Ripple Machine in the instant case, are not
such machines which cannot be utilised independently. The High Court in
that case had accepted the plea of the assessee on being satisfied thdt "It
wou\d, appear, therefore, that the freezer is meant to be utilised as a part of
an ice cream manufacturing plant and has no utility by itself." The statutory
authorities under the Act and the Tribunal, were, therefore, justified to hold H
924 SUPREME COURT REPORTS [1999] 2 S.C.R.

A that the Can Filler, Fruit Feeder and Ripple Machine are independent machines
and not accessories as claimed by the appellant. There is no merit in this
appeal which is accordingly dismissed, but without any order as to costs.

R.K.S. Appeal dismissed.

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