1997(06)LCX0003

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri S.L. Peeran, Member (J) and Shiben K. Dhar, Member (T)

TRUSOUND PVT. LTD.

Versus

COLLECTOR OF CUSTOMS, NEW DELHI

Final Order No. C/1665/97-B2, dated 12-6-1997 in Appeal No. C/370/91-B2

Advocated By : Shri Sanjeev Batra, General Manager (Commercial), for the Appellant.

Shri S.N. Ojha, JDR, for the Respondents.

[Order per : Shiben K. Dhar, Member (T)]. - This appeal is directed against order dated 26-11-1990 of Collector of Customs (Appeals).

2. The appellants imported a consignment of Mu-metal Housings. They claimed assessment under Heading 85.04.90 as parts of transformer. The Asstt. Collector rejected this claim as unsubstantiated since no catalogue etc. had been produced and these had been declared at the time of import as parts of transformer. Collector (Appeals) upheld the order, hence this appeal.

3. Arguing for the appellants, ld. General Manager of the appellant’s company submits that Mu-Metal Housing is a component part of low level audio transformer. It is used to encase the basic transformer to prevent the A.C. Hum field from reaching the transformer inside. It is made of Mu-Metal a metallic alloy with a high permeability and a low hysteresis loss that makes it excellent for magnetic shielding. It is, therefore, a vital part of transformer.

4. Arguing for the revenue, ld. DR submits that it is a mere casing and transformer itself is complete without its case. He states that literature refers to transformer being encased in Mu-Metal Housing and this would indicate that the function of the impugned good is merely housing the transformer. It may be an ancilliary to a transformer but it cannot be called a part of transformer.

5. We have heard both sides. Extract from Book “Public Address System” by Vivian Capel published by Keith Dickson Publishing Ltd., London were produced by the appellant in the Court. We extract below some of the relevant portions :

“Thus second point is that they are extremely susceptible to hum pickup, though they may be screened in a metal container. They must, therefore, be carefully positioned to find a point of minimum hum. This is one advantage of the terminal type over the plug-in variety. It can be located a few feet from the amplifier where there are less likely to be hum fields from the power transformer. The more expensive transformers are encased in a material called mu-metal, which virtually prevents all but the strongest hum fields reaching the transformer inside. These can be positioned almost anywhere without suffering from hum, so if transformers must be used, it is well worth-while to use mu-metal screened ones in spite of their cost”.

The literature also indicates that ‘Mu-metal is metallic alloy with a high permeability and a low hysteresis loss that makes it excellent for magnetic shielding’.

6. It was contended before us that the housing does not serve the purpose merely of encasing the transformer but actually takes part in actual functioning of the transformer in as much as it cuts out the unwanted signals which would otherwise enter the output of a transformer. In that sense it is not merely a housing but something more than the housing because of the quality of alloy used in the mu-metal housing. The literature would indicate that mu-metal is a metallic alloy with high permeability and a low hysteresis loss that makes it excellent for magnetic shielding. To the extent it helps in magnetic shielding which otherwise would affect the output of a transformer, it could be reasonably concluded that it is not merely housing but acts also as a part which compliments the main function of the transformer. The book “Public Address System” also makes it clear that more expensive transformers are encased in a material of mu-metal which virtually prevents all but the strongest hum fields reaching the transformer inside. These can be positioned almost anywhere without suffering from hum, so if transformers must be used, it is well worth-while to use mu-metal screened ones inspite of their cost.

7. The leaflet of the appellants themselves which is placed at page 4 of the supplementary paper book indicates that audio transformers are housed in a compact mu-metal case with screw-in coupling for chassis or panel fixing, they are supplied complete with securing nuts and 50 mm(2") long colour coded leads. It further strengthens the plea that in fact these are parts of the transformers. It is pleaded by the representative of the appellant’s company that the benefit of assessment under Heading 85.04 was in past given to them and in fact is being given even today by the Customs Authorities. In this connection, he presented in the court Bill of Entry dated 9-4-1997 which indicates mu-metal housing is assessed as transformer parts under CTH 8504.90. Considering all these factors, therefore, we are of the view that the appellants have succeeded in making out a case in their favour and the impugned goods can be considered as transformer parts only. In view of this, we set aside the impugned order and allow the appeal.

Equivalent 1997 (95) ELT 53 (Tribunal)

Equivalent 1997 (022) RLT 0480 (CEGAT)