1997(07)LCX0169

IN THE CEGAT, SOUTH ZONAL BENCH, MADRAS

S/Shri V.P. Gulati, Vice President and T.P. Nambiar, Member (J)

SCIENTIFIC INSTRUMENTS CO. LTD.

Versus

COMMISSIONER OF CUSTOMS, MADRAS

Order Nos. 1778-1779/97, dated 4-7-1997 in Appeal Nos. C/R-733/96 & C/R-39/97

Advocated By : Shri M.S. Kumaraswamy, Consultant, for the Appellant.

 Shri R. Victor Thyagaraj, SDR, for the Respondents.

[Order per : V.P. Gulati, Vice President]. - The issue in the appeal relates to the classification of the goods which have been described as Waveguides. The Waveguide as described in the technical literature produced by the appellants is as under :

Waveguides may have rectangular or circular cross-section. In practice uniform cross-section is important for the same reason as transmission lines; they are thus easier to manufacture and their properties are uniform and easier to calculate. In fact any configuration of electric and magnetic fields inside a waveguide must be solution of Maxwell’s equations. These fields must also satisfy the boundary conditions imposed by the walls of the guide. It is of utmost importance to realise that conduction of energy takes place not through the walls of the guide; the guide walls only confine the energy. Actual energy conduction takes place through the dielectric filling the wageguide, usually air. In wave propagation it is necessary to speak in terms of electric and magnetic fields while discussing the properties of waveguide, unlike in transmission lines when we speak in terms of voltages and current. Moreover because the cross-sectional dimension of a waveguide must be of the same order as wavelength their use is economical at frequencies above 1 GHz.

Some advantages that the waveguides possess over coaxial lines are discussed here. Waveguides are simpler to manufacture than coaxial lines since the inner conductor is missing. Because there is neither an inner conductor nor a dielectric in a waveguide flash over is less likely to occur. Therefore, the power handling capacity of waveguide is more, and may be about ten times as high as that of coaxial air dielectric rigid cables of similar dimensions. In a waveguide the propagation is by reflection from the walls, power losses in waveguides are lower than in comparable transmission lines.

2. The learned lower appellate authority has held the goods to be assessable under Tariff Heading 8544.11. The revenue (appellants/respondents) is aggrieved of the classification as held by the learned lower authority and the classification sought is under Tariff Heading 8307 or in the alternative 7411. The importers (appellants/respondents), however, seek re-classification of the goods under Tariff Heading 8529.90. Various competing entries as above are reproduced below for convenience of reference :

3. The learned lower appellate authority has examined the issue taking into consideration the use of the goods imported and in terms of the interpretative Rule 4 has held the goods would be classifiable under Tariff Heading 8544.11. The learned lower authority’s findings are reproduced below for convenience of reference :

I find that the learned Lower Authority has not addressed the question from the angle of the appellant that the impugned waveguides, though in running length, were not capable of being used in any other apparatus or instrument except in transmission apparatus as microwave passive component. Ordinarily for classification purposes, any item or article in running length is not considered as a component, as it is generally understood that a component ought to be tailor-made for being fitted into the main machinery, equipment or apparatus without further processing of the item as such. The underlying presumption of course, is that the article in running length is capable of being used in more than one end product and, therefore, cannot be considered as an integral part of machinery. The above presumption may not strictly be applicable in the instant case in view of the emphatic submissions made by the appellant with the help of catalogue and several literature produced by then where the waveguide has been described as passive microwave component. It has been submitted also that the waveguides in question are not capable of being used elsewhere, except in transmission apparatus for satellite communication. In view of the above, the question that falls for determination is whether the waveguides in running length, meant for exclusive use in transmission apparatus as a passive microwave component, are classifiable under s/h 8529.90 or as part of transmission apparatus falling under s/h 8525.10. The other parts imported by the appellant were nothing but connectors to waveguides and, therefore, once the classification of waveguides is settled, the classification of its connectors that have been clubbed in the Bill of Entry for assessment purposes, may also be taken as settled under the same sub- heading. It is pertinent to note in this regard that the goods has been described in the invoice as also the Bill of Entry as microwave passive items and not as microwave passive components of transmission apparatus.

In a case where an item has been imported in running length, it will be reasonable to first examine whether such item in running length is known to the trade by a specific nomenclature and not as a component. Secondly, it also falls for examination whether such item is specifically covered by any heading or sub-heading. It is the case of the Department that the impugned waveguide is correctly classifiable under Heading 83.07. The above finding has already been contested by the appellant that on the ground that Heading 83.07 covers flexible tubing of base metal suitable for use as water tight protection for electrical cables or electrical transmission systems, while in the instant case, the waveguide is not for protection of electrical cables or electrical transmission tubing. It is actually a microwave passive item as described in the invoice, akin to electrical conductor. Therefore, its classification under Heading 83.07 can be taken as completely ruled out.

Let us now examine whether the impugned waveguide is classifiable under Heading 85.44 as Conductor. It is the case of the appellant that even though electromagnetic waveguide is similar to conductor in that, both can be used to transmit power or a singal, they differ in that, the waves are transmitted inside a waveguide, while electrical current travel down a conductor. Strictly speaking, waveguide is an electromagnetic conductor and not electric conductor. However, it is a fact that the waveguide as such is not specifically covered by any heading or sub-heading. Being imported in running length, it is repugnant to logic to classify such goods as a component or part of transmission apparatus. In the above circumstances, it will be advisable to refer to Rule 4 of the Rules for Interpretation of the Customs Tariff in terms of which, goods that cannot be classified in accordance with the any of the preceding Rules shall be classified under the heading appropriate to the goods to which they are most akin. I am of the view that the impugned waveguides being electromagnetic conductor are most akin to electric conductor and, therefore, are classifiable under Heading 85.44. In view of the above reasons, I am inclined to direct re-assessment of the goods to duty under Heading 85.44.

4. The learned SDR for the department has pleaded that Tariff Heading 8544 covers insulated cables and other electric conductors. He has pleaded the goods in question which are in the nature of corrugated copper elliptical shaped hollow tubes, do not in any way come near to the description of insulated wires and cables and other insulated conductors covered under Tariff Heading 8544. He has pleaded, taking into consideration the shape of the goods and the material of which these are made, the goods cannot be taken to be covered under Tariff Heading as held by the learned lower appellate authority. He has pleaded that the flexible copper tubings are specifically covered under 83.07. He has pleaded that corrugated tubings, as per the HSN are covered under this heading. He pleads that no doubt the goods answer to a specific use for transmission of electromagnetic waves and which are transmitted in the hollow of the tube. Since these are imported in running lengths, these cannot be considered as part of transmission apparatus and the same, therefore, have to be assessed based on this aspect and the material of which these are made. He has pleaded that taking these facts into consideration, the learned lower authority’s classification is not sustainable. He has pleaded that notwithstanding the functional roles that these tubings play, the very fact that these are flexible tubings, these would be correctly assessable under that heading.

5. The learned Consultant for the importers who have also filed an appeal against the classification as held by the learned lower authority has urged for the classification of the goods under 8529.90. He has pleaded that notwithstanding the fact that the goods imported are in lengths, that would not make the goods in any the less usable except as parts of the transmission apparatus. He has pleaded that the waveguides as could be seen from the extracts of the literature produced are specifically designed for transmission of the electromagnetic waves and they provide a link between the generator of the electromagnetic waves and the antenna. He has pleaded by reason of this use, the goods in question can be treated as parts of a transmission system. He, however, could not enlighten us as to how the manner in which the goods are used, these could be considered as part of any specific apparatus as covered under Tariff Heading 8529.90. He has pleaded that the very fact that it is used as a link between the generator of the electromagnetic waves and the antenna would clearly show that this is used as part of a transmission system. He has pleaded the Tariff Heading should be given a wider meaning and, therefore, for that reason the goods should be taken to be by reason of the specific use for which this has been designed as part of the apparatus covered under Tariff Heading 85.25.

6. We have considered the pleas made by both the sides. We observe that there is no dispute as to the use to which the goods are to be put and the manner of its use. The plea of the revenue is that the goods are imported in running lengths and these are to be used after cutting them in desired lengths. The learned Consultant pleads that the goods have been imported in lengths as have been ordered by the Department of Telecommunication to be fitted as such. He had pleaded by reason of that, the goods should be considered as part of a transmission apparatus falling under 85.25.

7. We have given a careful thought to the pleas as made before us. We observe the scope of the Tariff Heading 85.25 as set out in the Customs Tariff is limited and the type of apparatus which is spelt out thereunder are transmission apparatus for radio-telephony, radio-telegraphy, radio broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus, television cameras, video cameras and video cassette recorders. It is seen that the apparatus as envisaged under this heading is such which can be brought to the market for being bought and sold as such and not for being created in situation by showing different items in a transmission system. The manner in which the waveguides are to be used only goes to show that these will become a part of the transmission system and this will make the transmission possible by linking the different items of apparatus for ultimate transmission of the waves through the antenna. We, therefore, are unable to accept the plea of the appellants that the waveguides should be considered as part of any specific apparatus as covered under 85.25.

8. Adverting to the classification as urged by the revenue, we observe that 8307 covers within its ambit, this is a residual item for copper and it is covered within the ambit flexible tubings and which should also be corrugated. In the HSN Notes, the scope of the tubing as covered under the flexible tubing is set out as under :

(001) Flexible tubing composed of a shaped strip rolled spirally, with or without fastening of the edge. Tubing of this type may be rendered water or gas tight by packing with rubber, asbestos, textiles, etc. It is then suitable for use as watertight protection for electric cables or flexible transmission systems; vacuum cleaner tubing; conduits for compressed air, steam, gas, water, petrol, oil or other fluids in engines, machine tools, pumps, transformers, hydraulic or pneumatic appliances, blast furnaces, etc. Similar tubing not rendered watertight is used as conduits for sand, grain, dust, shavings etc., and also, in certain cases, for protecting electric cables, other flexible transmission piping, rubber tubing etc.

(2) Corrugated flexible tubing obtained e.g., by deformation of a smooth-surfaced pipe. This tubing is by its nature water and air tight, and can be used without further processing for the purposes described in Paragraph (1) above.

It is seen that the tubing covered under this heading answer to certain specific uses like either providing a water tight protection or as conduits for gas, steam, water etc. and for transmission of fluctuates in certain items of machinery. The waveguides in question, however, answer to a totally different use and this do not answer to anyone of the uses of the tubings as are set out under 83.07. We are, therefore, not able to agree with the learned SDR that the waveguides imported can be taken to be covered under Tariff Heading 83.07.

9. Coming now to the classification as ordered by the learned lower appellate authority, we find that while the heading is for insulated wires and conductors, as seen from the literature produced before us, we find that the waveguides perform the same function as the co-axial cables. The waveguides facilitate the transmission of the electromagnetic waves by confining them within the space of the waveguide and making it possible for the movement of the waves through it for ultimately being fed into the antenna for transmission. Since functionally as mentioned in the literature above, these are akin to co-axial cables, in our view the correct classification terms of Rule 4 would be under Tariff Heading 85.44. The Co-axial cables fall under Tariff Heading 8544.20. We, therefore, are of the view that the classification of the goods would be under this heading instead of 8544.11 as held by the learned lower authority. We observe interpretative Rule 4 as explained in the HSN Volume I is as under :

Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin.

We observe as explained in the Notes, kinship would depend upon many factors, description, character and purpose. In the present case we have gone by the purpose for which this is used and since co-axial cables served the same purpose as set out in the literature, in our view Rule 4 of the Interpretative Rules can be pressed into service for holding the classification under 8544.20.

10. The appeals of both the revenue and the importers are dismissed and the classification of the goods is ordered to be under 8544.20.

Equivalent 1997 (95) ELT 564 (Tribunal)

Equivalent 1997 (022) RLT 0722 (CEGAT)