1997(10)LCX0082

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri Lajja Ram, Member (T) and A.C.C. Unni, Member (J)

LLOYDS STEEL INDUSTRIES LTD.

Versus

COLLECTOR OF CUSTOMS, MADRAS

Final Order No. C/2132/97-B2, dated 7-10-1997 in Appeal No. C/4090/91-B2

Cases Quoted

Mafatlal Industries Ltd. v. U.O.I. — 1996(12)LCX0012 Eq 1997 (089) ELT 0247 (S.C.) — Followed                       [Para 6]

Assistant Collector v. Anam Electrical Manufacturing Co. — 1997(01)LCX0011 Eq 1997 (090) ELT 0260 (S.C.) — Followed                                                                          [Para 6]

Advocated By : Shri J.S. Agarwal, Advocate, for the Appellant.

Shri A.K. Agarwal, SDR, for the Respondent.

[Order per : Lajja Ram, Member (T)]. - In this appeal filed by M/s. Lloyds Steel Industries Ltd., the issue for our consideration is whether the components for power plant 6.25 MW viz. (1) Alternator with Controls (2) Steam turbine 6250 KW and (3) Lube Oil Condensing System were classifiable as Electric Generating sets and Rotary Convertors under Heading 85.02 of the Customs Tariff or they were to be classifiable under Heading 85.03 as parts suitable for use solely or principally with the machines under Heading 85.02 insofar as the Alternator and Lube oil condensing system were concerned and under Heading 84.06 insofar as the steam turbine was concerned.

2. We have heard Shri J.S. Agarwal, learned Advocate for the appellants and Shri A.K. Agarwal, learned DR for the respondent Revenue. We have gone through the facts on record and have perused the Order-in-Original dated 9-3-1991 passed by the Addl. Collector of Customs, Madras. Under Heading 85.02 Electric Generating sets and Rotary convertors were covered. The parts suitable for use solely or principally with the above Electric generating sets were classifiable under Heading 85.03 of the Tariff. The goods imported were components for power plant. The goods imported however, did not make an electric generating set.

3. The Adjudicating authority had observed that the appellants had imported most of the components of power plant that will make a complete power plant as such. He had further observed that a power plant consists of various items like turbine control panels, lubricating system, generator, steam generating units like boiler, super heaters, etc. As we find that only three components as referred to above, were imported, we do not agree with the view taken by the Adjudicating authority that the goods imported are nothing but a generator with a turbine to drive the generator and the lubrication system to lubricate the turbines and the generator.

4. Shri A.K. Agarwal, learned SDR has referred to Note 4 under Section XVI of the Tariff. Note 4 under Section XVI states that where a machine (including a combination of machines consists of individual components whether separate or inter-connected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. We find that not a complete machine but three components for the power plant had been imported and there is nothing on record to show that these parts in any way were inter-connected. They have been shown in the invoice separately with separate price for each of them.

5. After going through the description of the goods as given by the Adjudicating authority, we consider that the three components imported by the appellants were not classifiable as Electric generator sets. They were required to be classified on their merits. The Alternator and Lube oil condensing system were admittedly parts suitable for use as Electric generating sets and were correctly classifiable under Heading 85.03 of the Tariff. Insofar as the steam turbine is concerned, the steam turbine and other turbines were speficially covered by Heading 84.06, their assessment under Heading 84.06 also appears to be correct.

6. In view of the above discussion, we do not agree with the view taken by the Addl. Collector of Customs, Madras and as a result, the appeal is allowed. The refund, if any, will however, be subject to law relating to unjust enrichment as laid down by the Supreme Court in the case of Mafatlal Industries Ltd. reported in 1996(12)LCX0012 Eq 1997 (089) ELT 0247 (S.C.) read with the Supreme Court decision as reported in 1997(01)LCX0011 Eq 1997 (090) ELT 0260 (S.C.). With the above observations, the appeal is allowed.

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Equivalent 1998 (97) ELT 95 (Tribunal)