ORDER
V.P. Gulati, Vice President
1. The issue in the appeal relates to benefit of Notification No. 49/95 dated 16-3-1995 as amended. The benefit is sought under SI. No. 17A covering Tariff Heading 8479.89 and the description of the goods covered by this heading is machinery for production of commodities. The respondents have imported pond aerators which has been classified under Heading 8479.89. However, the original authority denied the benefit of this Notification holding that pond aerators was not used for production of any commodity inasmuch as the same were used in the Acquafarm for shrimps production. Pond Aerators provide for necessary oxygeneration of the water which is essential for the survival and growth of shrimps.
2. The learned DR for the Department has pleaded that the learned lower appellate authority was in error in having allowed the benefit of this Notification inasmuch as no commodity as such came to be produced in the farm and in any case the equipment in question was not instrumental in the production of prawns. He has pleaded that the seedling which are prawns themselves are introduced in the farm at different places and wherein these seedlings spread in the water contained in certain parimeter. Necessary food is provided to these seedlings in the water and simultaneously through the pond aerators necessary arrangement for oxygeneration of the water in the night is provided. He has pleaded that in the farm as such these seedlings by nourishment provided and the growth atmosphere provided therein these grow as full size prawns which thereafter are harvested for sale and processing purposes,. He has pleaded that the term used in the Notification is machinery for production of commodities. He has pleaded that nothing gets produced as such in the farm as seedlings have been only helped to grow in the farm to the required size for trading purposes. He has pleaded that in this background therefore, the benefit of the Notification could not have been allowed. The learned CCE(A) it is seen, has relied upon the decision of the Hon’ble Supreme Court in the case of Indian Farmers Fertiliser Coop. Ltd reported 1996 (86) E.L.T. 177 (S.C.) to hold that the machine used can be taken to have been used for production of commodity i.e. Prawns.
3. The learned Consultant for the respondents has pleaded that the term “production of commodities “should be given a proper meaning. His plea is that fish including prawns are a taxable item both under the Customs Tariff and the Central Excise Tariff. He has pleaded that while the seedlings are purchased by the respondents from outside these seedlings cannot be considered as prawns as such as a commodity for sale and these become prawns as a commodity only after they are grown into full size in the Acquafarm. His plea is that prawns being an edible commodity which is bought and sold for its value as edible product, the’ machinery used for the purpose should be treated as for production of a commodity.
4. We have considered the pleas made by both the sides. The question that fails for consideration is as to what should be the meaning attached to the term for production of commodities. The Notification does not amplify as to the scope of the term “production of commodity” as such. This term therefore has to be understood as used ordinarily in the common parlance. The term produce as set out in the Webster’s New Collegiate Dictionary is as under”
to give being, form or shape to;
manufacture…
The term “commodity” is defined in the OXFORD
Illustrated Dictionary as under :
Article of trade as opp. service;
useful thing.
In the context of Prawn culture, and breeding, the question that has to be answered is whether the operations which are carried out in the Acquafarm can be taken to be one relating to production of a commodity. Prawn as an entity in the animal kingdom is already produced in the form of seedlings which have been purchased by the assesses and these are the ones which are introduced by them in their Acquafarm. What gets grown in the Acquafarm are these seedlings. These seedlings get nourished to their full size and thereafter these are harvested. While these seedlings can also be called prawns in the form these are obtained, these on growing to the full size are still known as prawns. From the trading point of view, these are two different things. Seedlings are not edible item; which is bought and sold for its nourishment value in the normal course of trade and it is the full grown prawns which are brought as prawns and which is accepted as an edible item. Prawns acquire value in the trade only by reason of these being in grown size which can be brought to the market for edible purposes. Seedlings in that sense therefore cannot be taken to be an edible commodity. We observe that the term “commodity” as defined above can cover items like full grown prawns because there emerges as an article of trade. In this background it can be said that a commodity has been produced in the Acquafarm. We observe that prawn farming is a recent development and this farming is only done for the purpose of bringing into existence tradeable item and and the tariff has to be therefore, understood in the background, of this technological advancement made and the new production process which have emerged. Taxation authorities have to take note of this realities as are emerging and have to interpret the tariff in a dynamic method to ensure that the benefits as are made available are not denied by reason of any narrow interpretation. The Hon’ble Supreme Court in the case of CCE v. Lekhmi & Sons reported in 1996 (82) E.L.T. 162 has clearly laid down that while classifying the goods under a particular Tariff heading or for Modvat purposes, the scientific advancement made should be borne in mind. Therefore, following the ratio of the decision of the Hon’ble Supreme Court and in view of what we have held above, we are of the view that the learned CCE(A) has rightly allowed the benefit of the Notifications to the appellants. The appeal of the Revenue is therefore, dismissed.