2002(09)LCX0202

IN THE CEGAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri S.L. Peeran, Member (J) and Jeet Ram Kait, Member (T)

COMMISSIONER OF CUSTOMS, CHENNAI

Versus

KONE ELEVATOR INDIA LTD.

Final Order No. 1025/2002, dated 9-9-2002 in Appeal No. C/477/98/Md

Advocated By :   Shri C. Mani, DR, for the Appellant.

Shri Balasubramanian, Advocate, for the Respondent.

[Order per : S.L. Peeran, Member (J) (Oral)]. - This is a Revenue appeal against the Order-in-Appeal No. C-Cus. 360/98 dated nil by which the Commissioner (Appeals) has examined the question of classification of the item Yaskavan Inverters. The Commissioner after due consideration of the tariff headings including the technical literature and opinion furnished by Professor, Power Systems and Drives, School of Electrical and Electronics Engineering, College of Engineering, Anna University and Professor and Head of Department of Electrical Engineering, IIT have also upheld the assessee’s contention that the item is classifiable under Heading 90.32. The Commissioner (Appeals) has also referred to the Explanatory notes to CTH 90.32 before coming to his conclusion. The findings recorded by the Commissioner (Appeals) are reproduced herein below :

“I have gone through the case records. As per the manual “Varispeed - 616G3 (VS-616G3) is a high-performance/low noise general purpose inverter provided with multi-functions and is an improved version of VS 616 GH. By employing a newly designed digital operator better operation can be realized”. This inverter is a device which converts three-phase AC ‘commercial’ power supply to DC with an inverter section, producing AC variable frequency voltage from this converted DC. This is used to control the speed of the lift motor. One of its advantage is “Stall prevention”. As per the manual “The function of stall prevention during acceleration automatically extends acceleration according to load status (inverter output current), thus preventing the motor from stalling during acceleration”. Further, it is seen that these inverters have a 'programmable mode’ in addition to the Drive mode.

From the above it is evident that the impugned goods-variable speed driver, are inverters which can be programmed, capable of converting AC to DC and vice versa and are capable of automatically controlling certain parameters. (For example stall prevention). The ‘lower authority, while deciding the nature of the goods to be inverters, has not appreciated the fact that they are more than a simple inverter.

A mere inverter would merit classification under CTH 85.04. However, given the configuration and functioning of the impugned goods, when seen in the light of HSN explanatory notes to CTH 90.32 at pages 1659 and 1661 would show that the goods are correctly classifiable under CTH 90.32; as it covers ‘Automatic regulators of electrical quantities designed to bring a quality, electrical or non-electrical, to and maintain it at, a desired value, stablished against any disturbances, by constructively or periodically measuring its actual value.

While examining point B-1 of the October ’95 conference of Commissioners held at Cochin, the lower authority has failed to notice that the impugned goods are identical to the one discussed in the conference i.e. it is a drive for controlling a motor, converts AC to DC and DC to AC, it can be programmed and above all it can automatically control/regulates electrical quantities. Hence, his rejection of the recommendation of the conference is not tenable.

Incidentally I find from the records that Dr. C. Chellamuthu, Professor Power Systems and Drives, School of Electrical and Electronics Engineering, College of Engineering, Anna University in his letter dt. 9-3-98 to the A.C. (Gr. 5B & 6); ACC Meenambakkam had with reference to Varispeed 616G5 has held that ‘the specification mentioned in the literature of the above items are similar to those mentioned in Commissioner’s conference and can be classified under heading 90.32. of the tariff’. In the instant case the Varispeed is of the same 616G series. Similarly the Professor and Head of the Department of Electrical Engineering, IIT, G. Sridhar Rao vide letter dt. 10-3-98 in case of Digital variable speed drives had opined on the same lines. The imported goods, I find are identical equipment as there are also amenable to digital operations.

In view of the above the lower authority’s order is set aside and the appeal is allowed.”

2.  The learned DR referred to the grounds of appeal. It is stated that as per Section note 6(b) to Chapter 90 and Explanatory notes to 9032.00 the Automatic Regulator of Electrical Quantities and Instruments for automatically controlling are designed to bring a quantity and to maintain it at a desired value stabilised against any disturbances measuring its actual value and consist of :

(a) A measuring device

(b) An electrical control device

(c) A starting, stopping or operating device.

Therefore, it is contended that general purpose inverters under import did not contain any of the device for operation and hence the same cannot be considered as automatic controlling instrument and the item merits classification under 8504.40 of the CTA. The learned DR sought for reversal of the impugned order and restoration of the order-in-original.

4. Shri Balasubramanian, learned Counsel for the respondents submits that the impugned order is legal and proper in the light of the detailed catalogue and the expert opinion given by two Professors of Anna University and the IIT. Therefore, all the technical parameters of the item in question has been considered by the lower appellate authority and his order classifying the goods under Heading 90.32 of the CTH is sustainable in law.

5. We have considered the submissions made and on perusal of the records we notice that the Commissioner (Appeals) has gone into the facts in detail and the parameters of the item. He has examined the technical literature and also the opinion given by two experts and the department has not produced any rebuttal evidence to challenge the opinion furnished by the experts. In view of the detailed finding given by the Commissioner (Appeals) that the item falls under CTH 90.32 which is supported by the technical literature and expert opinion, we do not find any reason to interfere with the order passed by the Commissioner (Appeals). We, therefore, uphold the impugned order and reject the Revenue appeal.

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Equivalent 2002 (146) ELT 0369 (Tri. - Chennai)

Equivalent 2002 (053) RLT 0720