1995(06)LCX0054

IN THE CEGAT, SPECIAL BENCH ‘B2’, NEW DELHI

S/Shri G.A. Brahma Deva, Member (J) and G.R. Sharma, Member (T)

GLAXO LABORATORIES (INDIA) LTD.

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Misc. Order No. C/102/95-B2 and Final Order No. C/204/95-B2, dated 20-6-1995 in C/Misc/560//95-B2 in Appeal No. C/1769/85-B2

Cases Quoted

SRF Industrial Fabrics v. Collector — 1994 (73) ELT 146                                                 [Para 11]

Hyderabad Plywood Ltd. v. Collector — 1991 (55) ELT 62                                             [Para 11]

Advocated By : Shri Rajiv Tyagi, Advocate, for the Appellants.

 Shri A.K. Singhal, JDR, for the Respondent.

[Order per : G.R. Sharma, Member (T)]. - The captioned appeal is directed against the order passed by the Collector (Appeals). The Collector (Appeals) in his order had held as under :

“From the description in the literature as given in the catalogue of the imported product, it appears that the imported product by itself is not a chromatograph, on the contrary it is purely a micro-processor, which performs two way communication for control and operation from a central computer. It stores upto nine methods in memory while a 10th is running and contains sophisticated programming that recognizes the nature of each module plugged in, presenting only the pertinent questions during set-up. Therefore, from the description in the catalogue it is obvious that the imported product is a data system, and is a powerful micro-processor and is thus more an accessory to the central computer and not to the chromatograph itself. It view of this, its original assessment done at the Air Cargo Complex to Cus. Duty under Heading 84.51/55 was correct, and since the Asstt. Collector had confirmed that modality of assessment, his order was correct, and I find no reason to interfere with the same order. The appeal is therefore, rejected.”

2. Briefly stated the facts of the case are that the appellants imported chromatographic and sought clearance of the goods under Chapter Heading 84.51/55 of the Customs Tariff Act, 1975. Later on, the appellants claimed that the imported item Sigma 2000 was an accessory of chromatograph and contended that since chromatograph by itself was assessable to customs duty under Chapter Heading 90.25(1) of the Customs Tariff, the imported goods should also be classified under the same heading as chromatograph. The appellants also contended that chromatographics 2 was an integral part of Gas Chromatograph inasmuch as without this the gas chromatographics 2 cannot work at all, inasmuch as the imported chromatographics 2 repeats the results of the analysis of drug intermediates done by gas chromatographs. However, the customs was of the view that chromatographics 2 was a powerful micro-processor and therefore, was rightly classifiable under Heading 84.51/55 of the Customs Tariff Act, 1975. A show cause notice was accordingly issued to the appellants. The Assistant Collector rejected the contentions of the appellants and held that the classification of Chromatographics 2 under Heading 84.51/55 was correct. The Collector (Appeals) also agreed with the findings of Assistant Collector.

3. The appellants also submitted Miscellaneous Application No. C/Misc/560/1995. Through this miscellaneous application the appellants filed technical literature manual instructions and trade certificate to assist proper classification of the product. After hearing both sides, the misc. application was admitted.

4. Shri Rajiv Tyagi, the learned Advocate appearing for the appellants submitted that the technical literature of chromatographics 2 shows that it is a package which provides a very powerful and flexible system for the data capture and analysis of signals from gas and liquid chromatographs. The ld. Counsel  submitted  that  it  clearly  shows  that  chromatographics  2  works  in conjunction  with  chromatographs.  Further,  the  learned  counsel  submitted that chromatographics 2 combines hardware and software to offer the chromatographer a complete data production system, plus a wide range of graphics and computational aids. It was also contended that the interface unit accepts the single or dual channel analogue data from the liquid or gas chromatograph and converts it to the digital equivalent. Software in the unit detects various input transition points and impresses this information on the digital output. The digital information can be stored in the interface unit or transmitted to the data station as required. It was also argued by the ld. Counsel that the interface unit accepts analogue data from gas or liquid chromatograph, converts it to digital equivalent, stores the data in the unit and transmits it to the data station as required; that the unit has too high impedance, differential analogue inputs. It was further argued by the ld. Counsel that the analogue signal is then digitised under the control of the microprocessor and stored in the main memory in the interface unit; that approximately 30,000 data points can be stored in this manner; peak detection software within the interface analyses the chromatographic signal and transmits it to chromatorgraphs information to the data station together with the raw data stored in the interface memory will remain there until passed to the data station or until the main supply is removed from the unit. This information storage, in conjuction with the CIT 2 program, enables two interface units to be used in a system if so required; that the technical bulletin prepared by Labindia Instruments Pvt. Ltd. provided “The signal produced by G.C. Detector in not informative directly. It has to be connected to an integrator which produces graphic as well as alphanumeric report which is required by a user. In short, a Gas Chromatograph without an integrator is of no use”. Arguing on the use of chromatographics 2, the ld. counsel submitted that chromatographic data system software provides an answer to every chromatographer’s dream. The ability to store  raw data from a chromatographic analysis, to replot a chromatogram on the screen or on the graphics printer and re-assign a baseline resolves all those problems which occur when you wish to review or compare past results from an analysis. The ld. Counsel also submitted that the intelligent interface contains a 20 bit analogue to digital converter and is capable of supporting two synchronous channels from either gas or liquid chromatographs by means of the built-in microprocessor. The ld. Counsel submitted, chromatographs tool is the most sophisticated accessories which offers the full capabilities expected of a chromatograph and that this sort of post-run data manipulation and reintegration increase the efficiency of the chromatographer; that the term ‘accessory’ has been defined in the Import Policy itself which means an attachment, a part or sub-assembly which contributes to the effectiveness of the main equipment without changing its basic function; that chromatographics 2 increases the efficiency of the chromatograph. The ld. Counsel also submitted that the technical literature and catalogue clearly show, that chromatographics 2 can only be utilized in combination with Sigma 2000 or 2100 gas chromatograph and not with any other general purpose computer. The ld. counsel therefore, submitted that chromatographics 2 may be assessed under Heading 90.25(1) of the Customs Tariff Act, 1975.

5. Shri A.K. Singhal, the learned JDR appearing for the respondents submitted that the catalogue shows that chromatographs have their own built-in micro-processor; that chromatographics 2 has the ability to store raw data from a chromatographic analysis; to replot a chromatogram on the screen or on the graphics printer and re-assign a baseline resolves all those problems which occur when you wish to review or compare past results from an analysis which shows that a chromatographics-2 is a data processing machine; that the certificate issued by Labindia also shows that it is a data processing machine; that the appellants had admitted in their appeal, chromatographics 2 is a data system; that on examination of the catalogue, the Collector (Appeals) has rendered a finding that the imported product is a data system and is a powerful micro-processor; that in view of the fact that the gas chromatograph has an input in-built micro-processor, therefore, there is no need of providing another micro-processor as an accessory. The ld. DR submitted that the imported chromatographics 2 is neither an accessory nor an integral part of a chromatograph and therefore, cannot be termed as an accessory inasmuch as it is a powerful micro-processor for data processing and can be used with any other machine for purpose of processing data; that utility of this micro-processor depends on the software and that the software can be adjusted. He reiterated the findings of the lower authorities. The learned DR submitted that the lower authorities have rightly assessed the goods under the then Heading 84.51/55 of the CTA, 1975.

6. Heard the submissions of both sides and considered them. From the bill of entry, we find that the chromatographics-2 has been declared under Serial No. 2 and in the classification column, the classification has been claimed under Heading 84.51/55 by the appellants or by their agents. From this entry, therefore, it is very clear that the appellants had the understanding that chromatographics 2 was classifiable under Heading 84.51/55. There is no explanation forthcoming as to what led the appellants to claim the assessment under Heading 90.25(1) of the CTA, 1975 subsequently and claim refund of duty. We also observe that the Collector (Appeals) after going through the catalogue came to the conclusion that chromatographics-2 is a data system and is a powerful micro-processor and was not an accessory to chromatographs. We also note that the appellants in their appeal dated 26th August, 1985 have submitted that chromatographics 2 is a data system. The ld. counsel for the appellants laboured hard by reading from the technical literature and the certificate given by Labindia to show that chromatographics-2 was an accessory and an integral part of a chromatograph. However, a close look at the catalogue shows that there is already a built-in micro-processor in the chromatograph. No evidence has been brought before us to show as to how another imcro-processor or data system was an integral part or could be treated as an accessory of the chromatograph. It was argued by the ld. Counsel that an accessory as defined in the Import Policy means an attachment and since chromatograph is attached to chromatographics-2 therefore, it is an accessory. We however, find that every attachment to another machine cannot be treated as an accessory more so when the machine happens to be a data processor. Only such attachment which contributes to the effectiveness of the main equipment can be termed as accessory. In the instant case, as we have already observed that there is already a built-in micro-processor in the chromatograph as to how another data processor could be called an accessory has not been explained.

7. Whether chromatographics-2 increases effectiveness of a chromatograph, let us examine what a chromatograph is. The chromatograph (such as gas, liquid, ion or thin layer chromatographs) for the determination of gas or liquid components. The gas or liquid to be analysed is passed through columns of thin layers of absorbent material and then measured by means of a detector. The characteristics of the gases or liquids under analysis are indicated by the time taken for them to pass through the columns or thin layer of absorbing data while different components to be analysed is indicated by the strength of the output signal from the detector. We find that the technical literature on chromatograph shows that they have built-in micro-processor. In the certificate given by Labindia, we find that certificate only shows that chromatographics-2 is used with chromatographs. We also find that chromatographics 2 is used as an integrator. However, this certificate is not a legal authority on the subject and can at best have only an informative value. In the instructions manual of chromatographics-2, it has clearly been spelt out in para 1 that the chromatographics-2 package provides a very powerful and flexible system for the data capture and analysis of signals from gas and liquid chromatograph. Thus, primarily the product is meant for data capture and its analysis. It has further been provided in the instructions manual that software in the unit detects various input data transition point and impresses this information on the digital output. This very clearly shows that this is a powerful micro-processor and is capable of being used for the purpose of analysis of data of a particular type based on the software. This processor can therefore, not be termed as an integral part of chromatograph or an accessory thereof. Even otherwise accessories are classifiable on merits and simply because some definition of accessories has been given in the I.T.C. that definition cannot be blindly followed while considering its classification under the Customs Tariff Act, 1975.

8. Now coming to its classification under Heading 90.25(001), as claimed by the appellants or under Tariff Heading 84.51/55 as held by the Revenue. Tariff description under Heading 90.25(1) of Customs Tariff Act, 1975 reads as under :

On a [closer] look on the description given under this heading, we find that this reading covers instruments and apparatus for various purposes but it does not speak of an instrument or an apparatus which impresses data or analyses signals of gas as a powerful imcro-processor and therefore, chromatographics 2 does not qualify for classification under this tariff heading.

9. The next question that remains to be answered is whether chromatographics 2 merits classification under Heading 84.51/55. For proper appreciation of the description under this tariff heading, the same is re-produced below :

10. On a minute scrutiny of the description, we find that this heading includes automatic data processing machine and units thereof. It is well settled principle of law that wherever there is specific description covering particular product, the product should be classified under that heading.

11. We also observe that in the bill of entry the appellants themselves have claimed the classification of chromatographics-2 under Customs Tariff Heading as 84.51/55 and since the respondents have accepted this claim of the appellants, the appellants cannot be said to be aggrieved. In such a case the appeal cannot be held as maintainable. This view is supported by the decision of the Tribunal in the case of SRF Industrial Fabrics reported in 1994 (73) ELT 146 and Hyderabad Plywood Ltd. reported in 1991 (55) ELT 62.

12. A cursory look at the relevant B/E also shows that assessable value of the chromatograph is Rs. 1,60,543/- whereas the assesssable value of the chromatographics is indicated as 1,58,907/- which is almost equal to the value of the main machine of which the chromatographics 2 has been claimed as an accessory. En passant, it may be said that normally the value of the accessory is substantially lower than the value of the machine which is not so in the present case.

13. Having regard to all facts discussed above, we hold that chromatographics-2 is a data processing machine in the form of a powerful micro-processor. It is not an essential or an integral part of chromatographs nor is an accessory thereof and therefore, the product is correctly classified under Heading 84.51/55 of the Customs Tariff Act, 1975.

14. In view of the above findings, the appeal is rejected and the miscellaneous application is also disposed of.

Equivalent 1995 (79) ELT 450 (Tribunal)