1993(12)LCX0045

BEFORE THE CEGAT, SPECIAL BENCH `B2’, NEW DELHI

S/Shri P.C. Jain, Member (T) and S.L. Peeran, Member (J)

COLLECTOR OF CUSTOMS, MADRAS

Versus

WIDIA (I) LTD.

Order No. C/176/93-B2, dated 15-12-1993 in Appeal No. C/1144 /85-B2

Advocated By : Shri B.K. Singh, SDR, for the Appellants.

 Shri A.R. Madhav Rao, Advocate, for the Respondents.

[Order per : P.C. Jain, Member (T)]. - Brief facts of the case are as follows:

1.1 The respondents herein imported variable Speed drive VLT 7.5. It converts the fixed frequency and voltage of the main supply into an infinitely controllable frequency and voltage. The goods were originally assessed under T.H. 84.63(1) as a machine for controlling of varying the speed of rotation of a machine and it was equated to variable speed gear or a system of gears specifically mentioned under Heading 84.63(1) CTA, 1975. Accordingly, it was assessed thereunder. Refund claim filed by the respondents for reclassification of the goods under Tariff Heading 85.01(1) CTA, 1975 was rejected by the original authority on the aforesaid grounds.

1.2 In appeal before the Collector of Customs (Appeals), Madras the respondents herein succeeded and the assessment was ordered to be made under Tariff Heading 85.01(1) CTA, 1975, as contended by the appellants therein. Following is the finding of the Collector(Appeals):-

“It is seen from the catalogue that the impugned goods (i.e. variable speed drive VLT 7.5) are static frequency converters which are electronic units that convert the fixed frequency and voltage of the main supply into an infinitely controllable frequency and voltage; in that way the speed of a three-phase A.C. motor can be infinitely controlled. The goods are not gears or system of gears. The goods are static converters.”

2. In the appeal filed by the Revenue against the aforesaid order of the Collector (Appeals), it has been urged that subject goods are neither mechanical parts nor internal parts of machines but are frequency converters. Therefore, the appellant-Collector has himself ruled out Tariff Heading 84.63 CTA, 1975 under which the original assessment was made. It has, however, been urged that the lower appellate authority’s decision to assess the goods under Tariff Heading 85.01(1) is not correct in view of Explanatory Notes to BTN at page 1396 Vol. 3 which states the scope of static converters, rectifiers and rectifier apparatus under which description, the lower appellate authority has classified the goods. It has been submitted that the aforesaid group of goods under Tariff Heading 85.01(1) consists mainly of the rectifiers and rectifier apparatus used for converting Alternating Current (A.C.) into Direct Current (D.C.) Converter is a general term applicable to a rotary machine or combination of machines whose function is to convert A.C. to D.C. or vice versa, or which is used for A.C. phase conversion or frequency conversion. It is, therefore, inferred by the appellant-Collector from the aforesaid Explanatory Notes that only those static converters used for converting A.C. into D.C. are covered by Heading 85.01 CTA, 1975. The subject goods, namely frequency converters do not convert A.C. into D.C. but are electronic units that convert the fixed frequency and voltage of the main supply into an infinitely controllable frequency and voltage. The goods, therefore, are not used for A.C. to D.C. conversion and hence, submits the appellant-Collector, these do not merit classification under 85.01 CTA, 1975.

2.1 For justification of classification of the goods under Tariff Heading 85.18/27(1) CTA, 1975, the appellant-Collector has urged that the goods help in controlling of motors’ speed and thus help in the effective functioning of the various machines and machine tools with which the goods can be used in conjunction. The goods are, therefore a complete appliance by themselves having an individual function and hence their classification under the said Heading 85.18/27(1) CTA, 1975.

2.2 The aforesaid grounds have been reiterated by the learned SDR for the Revenue with reference to the Manual produced by the respondents. He submits that the goods not only change the frequency but go beyond that and regulate the speed of the motor. In this connection, he relies on the following extracts from the service manual : -

“Dantoss VLT static frequency converters consist of an uncontrolled three phase mains rectifier converts the three phase mains voltage to a D.C. voltage with a fixed value.

This constant d.c. voltage is then made variable by a chopper voltage frequency.

The value of the variable d.c. voltage is registered by a current measuring circuit which controls the inverter so that the valuable d.c. voltage value determines the output voltage and frequency of the inverter. [Emphasis supplied by the Id.SDR]

3. Opposing the contention of the learned SDR, Shri A.R. Madhav Rao, learned advocate for the respondents reiterates the findings of the lower appellate authority. He submits that the extract relied upon by the learned SDR clearly mentions that the goods are static frequency converters. It converts the three phase main voltage to a D.C. Voltage with a fixed value. It then reconverts the constant D.C. voltage into a variable voltage. This conversion is performed by an inverter which is nothing but a type of converter, as is apparent from the definitions of `Converter’ and `Inverter’ in Chambers Science and Technology Dictionary: `Converter’ has been defined therein as -

“A circuit for changing a.c. to d.c. or vice versa. Rating can be a few watts to megawatts.”

Similarly, `Inverter’ has been defined as -

“A a.c. to d.c. converter using e.g. a transistor or thyristor oscillator.”

He, therefore, submits that in their own function and working the goods are nothing but static converters, as held by the lower appellate authority and therefore, the appeal deserves to be dismissed.

4. We have carefully considered the pleas advanced on both sides. We are inclined to agree with the learned SDR, Shri B.K. Singh that the goods cannot be treated as only rectifiers or static converters changing A.C. into D.C. It is seen that fixed D.C. value is further changed to variable speed values of the D.C. This is not the function of inverters, as per the definition relied upon by the respondents. Inverter changes A.C. into D.C. It does not change the D.C. value to variable values of D.C. There is sufficient force in the pleas of the learned SDR that the goods control motor speeds and helps in the effective functioning of the various machines and machine tools with which it works in conjunction. The function of the goods, therefore, is specific irrespective of the goods with which the goods are used; its function remains the same. It is, therefore, a complete appliance by itself having an individual function. In our view, therefore, Tariff Heading 85.18/27(1) CTA, 1975 is more appropriate than Tariff Heading 85.01(1) CTA, 1975. Hence the appeal of the Revenue is allowed with consequential effects thereof.

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Equivalent 1994 (71) ELT 193 (Tribunal)