1997(07)LCX0203

IN THE CEGAT, COURT NO. II, NEW DELHI

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

LML LIMITED

Versus

COLLECTOR OF CUSTOMS, CALCUTTA

Final Order No. C/1683/97-B2, dated 16-7-1997 in Appeal No. C/1803/88-B2

Advocated By : Shri R. Santhanam, Advocate, for the Appellant.

Shri H.K. Jain, SDR, for the Respondents.

[Order per : G.R. Sharma, Member (T)]. - The short point for determination before us in the present appeal is (a) whether Induction Heater was classifiable under Chapter Heading 8448.20 or alternatively 8514.40 as claimed by the Assessees or was classifiable under 8516.29 as held by the Departmental authorities; (b) second issue is whether control panel will be entitled to the benefit of Notification No. 162/86, dated 1-3-1986.

2. The facts of the case, in brief, are that the appellants imported induction heater and control panel among other things as replacement for Nylon Yarn Manufacturing Plant. The claim that induction heater imported by them was specially designed for use in the Plant and was, therefore, classifiable under Chapter Heading 8448.20. Alternatively, they submitted that in case, item specifically, under the aforesaid heading is not classifiable, then alternative classification of the imported product is 8514.40. About the control panel, the dispute was rate of duty applicable. The importer claims that since voltage of the control panel was 400 volts and above. Therefore, they were entitled to the concessional rate of duty under Notification No. 162/86, dated 1-3-1986. On the other hand, the department held that since the voltage marked on the plate of the panel was 380 volts and, therefore, the product was not eligible for concession rate of duty under Notification No. 162/86. Before the lower authorities, it was contended that product is a manufacture of European Countries where the voltage normally used is 380 but is liable to withstand fluctuation of + (-) 10%. It was also contended by the Importer that the Board has issued a Tariff Advice where under control panel indicating voltage of 380 volts were to be treated that of 400 volts for the purpose of Tariff. The lower authorities after considering the submissions held that heater was classifiable under 8516.29 and that the benefit of Notification No. 162/86 was not applicable to the control panel where on voltage was marked as 380 volts. Against these findings of the lower authorities the appellants have filed the present appeal.

3. Shri R. Santhanam, learned Advocate appearing for the appellant submits that heater imported by the appellants was a specially designed equipment for heating. He submits that description of the goods under Chapter Heading 8516.29 pertains to equipment heater and other heating apparatus of domestic type of heaters or heating equipments. He submits that heater imported by the appellant was specially designed for use in the Plant and machinery for which they had imported this item. He submits that heater when earlier imported by them was classifiable along with the machine as a spare of the machine classifiable under 8448.20. He submits that there is no doubt that heater imported by them was to be used in the machines and, therefore, it should be treated as a spare part for machine and should be classified under Chapter Heading 8448.20. He submits that alternative heading for classifying the product is 8514.40 inasmuch as it includes heating equipments. He submits that product imported by them is undoubtedly heating equipment and, therefore, merits classification against 8514.40. Insofar as the control panel and concessional rate of duty under Notification No. 162/86 is concerned, the learned counsel reiterated his submissions made before the lower authorities.

4. Shri H.K. Jain, learned SDR appearing for the department submits that insofar as the classification of induction heater is concerned, the most appropriate tariff item is 8516.29. He submits that this entry was specific for heater and since in terms of interpretative Rules for classification specifically lays down that specific entry should be peferred over a general entry and, therefore, the item has rightly been specified under Chapter Heading 8516.29. The learned DR submits that item has been described as a heater and serves the purpose of heating and that no specific literature, catalogue or write up has been submitted by the appellants to prove that it was specially designed for use in the plant or machinery imported by them. It would merit classification under the specific item and not as a spare of the machine for which it is claimed to be as replacement part. On the question of applicability of concessional rate of duty on control panel under Notification No. 162/86, learned DR submits that Tariff Advice was under the old Tariff and was for the purpose of classification. He submits that insofar as the applicability of the notification is concerned, the notification is to be construed strictly. He submits that voltage control panel according to the manufacturer was 380 volts as recorded on the plate of the control panel and, therefore, this noting must be a deciding factor while applying concessional rate of duty under Notification No. 162/86.

5. Heard submissions of both sides. For the purpose of clarity, Tariff Entry 8448.20, 8514.40 and 8516.29 are reproduced below :-

We note that in the bill of entry the description of the product is induction heater. We also note that heater has been described as a specific entry in the Tariff. The contention of the appellants that it was a spare of Nylone Yarn Manufacturing Plant and was specially designed for use in it was not supported by a catalogue, literature or write up of the Manufacturer. We also note that this item has not been imported along with the Plant so as to merit classification as a spare of the Plant. We also note that Interpretative Rules of Tariff clearly stipulate that specific entry should be preferred over a general entry. The specific entry for this particular item appears to be 8516.29. It was contended before us that Chapter Heading 8514.40 also makes a mention of heating equipment. However, from the description given in the bill of entry, the item is specific inasmuch as it has been described as induction heater. We, therefore, are not prepared to accept the contention that it would be classifiable under 8514.40. Having regard to the above discussions, we hold that product is classifiable under Chapter Heading 8516.29.

6. Insofar as the applicability of concessional rate of duty to control panel is concerned, we find that deciding factory is voltage. The conessional rate of duty under Notification No. 162/86 is applicable only if voltage of the control panel is 400 or more. In the instant case, the voltage recorded by the Manufacturer on the plate of the control panel is 380 volts. An argument was advanced before us that voltage was subject to fluctuation of +(-) 10% and, therefore, voltage should be taken as 400 volts. It was also argued that there was a Tariff Advice of the Central Board of Excise and Customs stating that for the purpose of classification voltage may be taken as 400 volts. We note that concessional rate of duty is applicable only in terms of exemption Notification. Exemption is an exception rather than a rule and, therefore, is to be construed strictly under Notification No. 162/86. The concessional rate of duty is applicable only when the voltage of the control panel is 400 volts or more. As indicated above, the Manufacturer’s noting on the panel indicates that voltage is only 380. Construing that concessional rate notification requires a voltage of 400 or more, we hold that control panel imported does not qualify for concessional rate of duty under the aforesaid notification. In the circumstances, the claim of concessional rate of duty by the Importer is also rejected.

7. The appeal is disposed of in the above terms.

Equivalent 1997 (94) ELT 699 (Tribunal)

Equivalent 1997 (022) RLT 0252 (CEGAT)