1997(11)LCX0037

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)

ASEA BROWN BOVERI LTD.

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Final Order No. C/2355/97-B2, dated 18-11-1997 in Appeal No. C/2672/90-B2

Advocated By : S/Shri Willingdon Christian and Mayur Shroff, Advocates, for the Appellant.

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

[Order per : Lajja Ram, Member (T)]. - In this appeal filed by M/s. Asea Brown Boveri Ltd. (ABB), earlier known as Hindustan Brown Boveri Ltd., the matter relates to the classification of the SF-6 gas filling and evacuation equipment. On import the goods were classified under sub-heading No. 8422.30 of the Customs Tariff. After the goods were cleared out of customs charge, the importers filed a refund claim on the ground that the goods were correctly classifiable under sub-heading No. 8414.80 of the Tariff. The Asstt. Collector Customs, Bombay rejected the refund claim as untenable. He observed that the items would be covered under sub-heading No. 8479.89 of the Tariff. On appeal the Collector of Customs (Appeals) observed that the machine imported was capable of functioning independently by itself and had its own identity. He held that it was a machine with individual function and was correctly classified under sub-heading No. 8479.89 of the Tariff.

2. The matter was posted for hearing on 8-9-1997 when Shri Willingdon Christian, Advocate and Shri Mayur Shroff, Advocate appeared for the appellants. Shri S.N. Ojha, JDR represented the respondent/Revenue.

3. Shri Willingdon Christian, Advocate stated that the goods imported were mainly gas compressor and were rightly classifiable under sub-heading No. 8414.80 of the Tariff and that Heading No. 84.79 was a residuary heading. He referred to Section Notes 3 and 4 under Section XVI and Chapter Note 2 under Chapter 84 of the Tariff and submitted that as the primary function of the gas and evacuation equipment was gas compressor, they were correctly classifiable under sub-heading No. 8414.80 of the Tariff. He pleaded that the goods were not service trolley.

4. Shri S.N. Ojha, JDR replied that the equipment imported was a gas filling and evacuation equipment and had independent functioning. There were no separate machines but an independent and integrated equipment for individual functioning. It was not a gas compressor. He submitted that the goods had been rightly classified under sub-Heading No. 8479.89 of the Tariff as a machine with individual function. As it was not a machine for manufacture of any commodity the goods had been rightly classified by the Collector of Customs (Appeals), Bombay.

5. We have carefully considered the matter. In the Bill of Entry the goods imported were described as SF-6 gas filling and evacuation equipment. SF-6 is for Sulfur Hexa Fluoride for uses in the gaseous insulator for electrical equipment and radar wave guides. In the invoice it was mentioned that one complete unit of SF-6 gas evacuation and filling equipment Type-III-019 had been imported. The invoice shows the logo `DILO’. In the product literature with the same logo `DILO’, the goods had been referred to as a service equipment/Truck, a maintenance device, for maintenance and for keeping up the operational safety of the SF-6 gas insulated switch gear plant. Depending upon the size of the plant and the said demands it was provided in the product literature that different service units/constructional groups could be used.

6. The issue our consideration is whether the equipment as briefly discussed above was classifiable under sub-heading No. 8414.80 as contended by ABB, or under sub-heading No. 8479.89 as decided by the Revenue.

7. Under Heading No. 84.14 air or vacuum pumps, air or other gas compressors and fans; ventilating or re-cycling hoods incorporating a fan whether or not fitted with filters, were covered, sub-heading No. 8414.80 covered `other’, other than the goods described under sub-heading Nos. 8414.10, 8414.20, 8414.30, 8414.40, 8414.51, 8414.59 and 8414.60. For better appreciation Heading No. 84.14 is extracted below :

It is seen that under sub-heading No. 8414.80 gas compressors will be classifiable. Are the goods in question a gas compressor? The compressor is a power driven machine that compresses gases (Webster’s 9th New Collegiate Dictionary, Private Library Edition); a machine used for increasing the pressure of a gas or vapour (McGraw Hill Dictionary of Scientific and Technical Terms II Edition). There are several types of compressors, for example reciprocating piston, Centrifugal, axial and rotary compressors. Piston compressors are used for producing higher processes whereas centrifugal compressors are used for low to minimum pressure. They are used for compressing gases into gas cylinders, in chemical processes, for refrigerators, for compressing air or other gases in reservoirs to be used to force feed machines or apparatus such as compressed air engines, pneumatic picks, wenches, brakes, pneumatic conveyor tubes, submarine, ballast tanks etc.

The goods imported were in the nature of a service equipment, service truck. In the technical literature of the suppliers it is describes as under :

   2. Description

- The service truck 3 - 019 can be supplied in 3 constructional groups. Basis is the constructional group compressor element which optionally can be supplied with pressure tank 600 litres, p_e = 25 bar or 1000 litres, pe = 25 bar. The constructional group compressor element and the pressure tank are connected to each other by means of a frame which is equipped with crane eyelets and fitted with steering and fixing rollers. For the assembly of the constructional group vacuum pump element and of the constructional group diaphragm compressor element the necessary space has been provided for.

- The constructional groups, compressor and diaphragm compressor work absolutely oil-free.

- The vacuum pump delivers to the atmosphere.

- The built-in compressor, the diaphragm compressor and the vacuum pump are supervised by working-hour counter and secured by an electric protecting device. The plant is equipped with a check-up for the direction of rotation.

- The excess operating pressure of diaphragm compressor and compressor is supervised and controlled by pressure reducers, pressure controllers, solenoid valves and contact pressure gauge.

- The SF₆ is stored in gaseous condition.

- All connection lines are equipped with the service-proved DILO tightening principle and ensure absolute tightness.

- The pressure tank is equipped with a safety valve and approved by the technical control board TUV. Other approvals are also possible.

- Prior to dispatch an inspection of the complete plant takes place. An inspection certificate is issued. The delivery includes 2 operating instructions and 1 single-end spanner.

- During development of service truck 3-019, particular attention was paid to ease of operation. Therefore, all the controls are positioned in a well visibly arranged control panel, whereby wrong manipulations are eliminated.

Its standard design consisted of constructional group compressor element with pressure tank 6001 litres or 1000 litres as well as electric control cabinet with all control elements for the three constructional groups :

1. Compressor element (standard)

2. Vacuum pump element and

3. Compressor and diaphragm compressor element.

It had a compressor element but could not be taken as a compressor as commonly understood. It was more than a compressor. The compressor element was only for compressing the SF-6 gas to higher pressure and for charging the gas into reservoir. It had no role for evacuating/sucking the gas from the circuit breaker, for bringing out the impurities from the SF-6 gas, for separation of moisture from that, or filling the gas in the gas in the circuit breaker. It could, therefore, not be classified as compressor.

8. Reference had been made by the appellants to Section Notes 3 and 4 under Section XVI and Chapter Note 2 under Chapter 84 of the Tariff for ease of reference they are extracted below :

2. Subject to the operation of Note 3 to Section XVI, a machine or appliance which answers to a description in one or more of the heading Nos. 84.01 to 84.24 and at the same time to a description in one or other of the heading Nos. 84.25 to 84.80 is to be classified under the appropriate heading of the former group and not the latter.

Heading No. 84.19 does not, however, cover :

(a) Germination plant, incubators or brooders (heading No. 84.36);

(b) Grain dampening machines (heading No. 84.37);

(c) Diffusing apparatus for sugar juice extraction (heading No. 84.38);

(d) Machinery for the heat treatment of textile yarns, fabrics or made up textile articles (heading No. 84.51); or

(e) Machinery or plant, designed for mechanical operation, in which a change of temperature, even if necessary, is subsidiary.

Heading No. 84.22 does not cover :

(a) Sewing machines for closing bags or similar containers (heading No. 84.52); or

(b) Office machinery of heading No. 84.72

Heading No. 84.24 does not cover :

Ink-jet printing machines (heading No. 84.43 or 84.71).

From the description of the goods it is seen that they were not composite machines. There was only one complete unit as SF-6 gas evacuation and filling equipment discharging single individual function with pressure tank filling device and rubber hoses which could not be considered as separate machines. There was no scope for considering the unit as a group of machines fitted together. When machines of different kinds are taken to be fitted together to form a whole, when incorporated one in the other or when mounted one on the other or mounted on common base or frame or in a common housing, they are considered to be the composite machines. According to the explanatory notes to the harmonised commodity description and coding system (HSN) the following are the examples of composite machines (refer page 1133); printing machines with a subsidiary machine for holding the paper (Heading No. 84.43); a card board box making machine combined with a auxiliary machine for printing a name or simple design (Heading No. 84.41); industrial furnaces combined with lifting or handling machinery (Heading No. 84.17 or 85.14); cigarette making machinery combined with subsidiary packaging machinery (Heading No. 84.78).

The service equipment/truck was an integrated equipment with different constructional groups, designed to serve a specific purpose of maintenance and keeping up the operational safeguard of the Sulfur Hexa Fluoride gas insulated switch gear plants. For this purpose it could not be said that its primary function was that of a compressor. The functioning of the constructional group compressor element (Standard) had been given in the product literature as under :

Constructional group compressor element (Standard)

1. Flooding gas chamber with air.

2. Storing SF₆ in service truck.

(a) with over pressure from the bottle or other transport receptacles

(b) with the aid of the compressor up to pe 0 bar of bottle pressure

3. Filling the gas chambers with SF₆

(a) with high pressure from the storage volume

(b) with the aid of the compressor up to Pe 0 bar of storage pressure

(c) with over pressure via the pressure reducer of the storage tank

4. Filling back SF₆ from the gas chamber into the service truck

(a) with over pressure from the gas chamber

(b) with the aid of the compressor up to pe 0 bar of gas chamber pressure

5. Drying SF₆ with the aid of the compressor

These functions were integrated and continuous and not complementary or alternative. These are step by step necessary and essential functions. The whole unit also did not had individual components which were covered by one or the other heading in Chapters 84 or 85 of the Tariff. Thus, the goods imported were not classifiable under sub-heading No. 84.14, sub-heading No. 8414.80 even with reference to the Section/Chapter Notes.

9. The Revenue had classified the goods imported under Heading No. 84.79, sub-heading No. 8479.89. Heading No. 84.79 is extracted below :

The main argument of the appellants is that the machine imported by them was not with individual functions and that it was for carrying out multiple functions. It has been explained in the HSN explanatory notes that for the purpose of Heading No. 84.79 the mechanical devices with or without motors or other driving force whose function could be performed distinctly from and independently of any other machine or appliance were to be regard-ed as having individual functions. The many and varied machines covered by this heading included machines for multiple uses and machines with variety of functions. The heading covered industrial robots, machines for washing scouring or removing dust from bad feathers hydraulic accumulators, machine for the maintenance of pipe lines or other non-flexible pipes (for example small self propelled machines used on oil pipe lines to clean the pipe, coat it with asphalt or other protective covering; machines carried through the pipes by the flow of the fluid itself, used for cleaning the inside of pipe lines;) ultra some apparatus for cleaning metal parts and miscellaneous other articles; consisting when complete (whether mounted in a common housing or as separate units) of a high frequency generator, one or several transducers and a tank for the articles to be cleaned, presented either complete or without the tank. The service equipment/truck for its essential functioning did not depend upon any other machines or appliance. The performance of the equipment was independent of any other machines or appliance and thus it had its own individual function. It was a complete independent self-contained equipment for successive continuing and integrated functions.

10. The appellants had described the equipment imported as a complete unit. The equipment performing functions of evacuation and filling could not be termed as a composite machine, unless it consisted of different machines fitted together to form a whole. For evacuation of the air, filling of the gas and compressing the gas, no separate independent machines were used but the whole system imported as an integrated unit was capable of discharging the requisite and necessary functions towards the end for which it was imported. It was not a question of supporting, subsidiary subordinate or the principal function but of one function that is “for a rational maintenance and for keeping up the operational safety of the SF-6 gas insulated switch gear plants.” The Collector of Customs (Appeals) had in this regard observed as under :

The contention of the appellant is that their machinery does not have individual function. Instead it has multiple function. This contention is not supported by the Explanatory Note as `individual function’ does not connote carrying out of only one function as contended. Individual function implies mechanism device with or without motor or other driving force, whose function can be performed distinctly from and independently of any machines or appliance. It has not been denied that the machine can function independently and that it is not internal part of a particular machine without which it has no identity of its own. Since individual function does not mean only one function and it implies function of the machine independently by itself rather than as component part of another machine, and the machine is capable of functioning independently, it has been correctly classified under 84.79. The appeal has no merit and is rejected.

11. From the above discussion it is clear that there is no merit in the appellants refund claim and that the same had been rightly rejected. Accordingly there is no merit in this appeal and the same is rejected.

_______

Equivalent 1998 (100) ELT 308 (Tribunal)

Equivalent 1998 (024) RLT 0588