Mahindra Engg. & Chem. Products Ltd. vs Collector of Cus., Bombay>1998(08)LCX0115

1998(08)LCX0115

IN THE CEGAT, COURT NO. II, NEW DELHI

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

MAHINDRA ENGG. & CHEM. PRODUCTS LTD.

Versus

COLLR. OF CUS., BOMBAY

Final Order No. 652/98-B2, dated 25-8-1998 in Appeal No. C/610/94-B2

Advocated By : Shri S.P. Sharma, Advocate, for the Appellant.

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

[Order per : A.C.C. Unni, Member (J)]. - This is an appeal filed by M/s. Mohindra Engg. & Chemical Products Ltd. against Order-in-Appeal dated 16-12-1993 passed by Collector of Customs (Appeals), Bombay. The dispute relates to the classification of `Oscillating Disc Rheometer’ imported by the appellants. The appellants claimed that the item was correctly classifiable under Chapter Heading 9027.80 read with Notification Nos. 105/89 and 158/89 read with Notification 46/88. The Department on the other hand classified the item under Chapter Heading 9024.80 which attracted a higher rate of duty. The appellants’ claim for refund to the tune of Rs. 4,86,297/- on account of the difference in the rates of duty was rejected by the authorities below. Hence the present Appeal.

2. The Asstt. Collector denied their claim for classification under Heading 90.27 holding that curing is a change in the physical properties of material by vulcanisation and the function of Rheometer was the measuring of torque which is proportional to the degree of vulcanisation and that torque is a mechanical property. According to the Assistant Collector, measurement of mechanical property will come under sub-heading 9024.80 and not under Heading No. 90.27. The Asstt. Collector also denied the benefit of Notification No. 105/89-Cus. stating that Rheometer did not satisfy the condition of measuring electrical phenomena which varied according to the factor to be ascertained. Collector (Appeals) observed that the main contention of the appellant was that `Oscillating Disc Rheometer’ was an instrument for checking viscosity and other like functions during the final stage of vulcanisation and curing and that the said function clearly came within Heading No. 90.27. The appellants had argued that basic technical characteristics of Mooney Viscometer, another item imported by them, and Oscillating Disc Rheometer were the same, namely, checking viscosity and other like functions. The only difference between “Rheometer’ and `Mooney Viscometer’ was that whereas Rheometer was capable of following the development of cure throughout the entire curing cycle, this could not be done by Mooney Viscometer. Further, it was the appellants’ contention that the main function of Rheometer was not to measure torque only as observed by the Asstt. Collector, but to check Viscocity and other functions during the final stage of vulcanisation and curing. After examining the technical literature furnished by the manufacturers, Collector (Appeals) held that the Asstt. Collector’s order classifying Oscillating Disc Rheometer under sub-heading 9024.80 was correct. The appeal filed against the said order was accordingly rejected.

3. Shri S.P. Sharma, ld. Advocate who appeared for the appellants before us submitted that the authorities below had based their decisions on the premise that the basic function of Rheometer is to measure torque and that torque was a mechanical property. As such, any instrument measuring mechanical property would be covered under Heading 90.24 and not under Heading 90.27 which covered instruments and apparatus for physical or chemical analysis. He drew attention to the two Headings namely 90.24 and 90.27. Whereas Heading 90.24 covered machines and appliances for testing the hardness, strength or other mechanical properties of materials such as metals, wood etc., Heading No. 90.27 covered instruments and apparatus for physical or chemical analysis and instruments and apparatus for measuring or checking viscosity, porosity, etc. He referred to the product catalogue describing the characteristics and application of RHEOMETER ODR 2000 imported by the appellants which read as follows :

“The ODR 2000 produces a rheograph from which one can monitor processing and vulcanisation characteristics as well as the physical properties of the material being tested”.

The Catalogue further describes the use of Rheometer as under :

“The Rheometer ODR 2000 measures the cure characteristics of compounded rubber in accordance with international testing standards. A sample sealed in a temperature controlled die cavity surrounds a biconical rotor. The rotor oscillates at 1.66 Hz (100 cpm), the output data correlates with the degree of vulcanization as a function of cure time. The output can be displayed, graphically recorded, or transmitted to a computer for analysis”.

He submitted that it will be seen that Rheometer ODR 2000 did not test the hardness, strength etc. or any other mechanical properties of materials as contemplated in Heading No. 90.24. On the other hand, the instrument in question answered the description of instruments/apparatus for physical/ chemical analysis for measuring/checking viscosity, porosity, expansion, surface tension, etc. justifying its classification under Heading 90.27. He, therefore, submitted that the impugned order may be set aside and the item may be held to be classifiable under Heading 90.27 with the consequential benefits of the exemption notification.

4. Shri O.N. Ojha, ld. DR appearing for the respondent Collector referred to the findings of the Collector (Appeals) in the Order-in-Appeal. The appellants had imported two instruments, viz. Mooney Viscometer and Disc Rheometer and had sought clearance of both under Heading No. 90.27. Whereas Mooney Viscometer was allowed to be classified under Heading No. 90.27, Disc Rheometer was classified under Chapter Heading 9024.80. He referred to Catalogue supplied by the manufacturer describing the functions of Mooney Viscometer. Mooney Viscosity test performed by Mooney Viscometer is for purposes of measuring the initial stiffness of rubber, degree of plasticity or softening upon mixing and the amount of heat history that can be absorbed by the system before vulcanisation beings. The Mooney Viscometer had the limitation of its being able to measure Viscosity at very low shear rate. It could also not measure the development of cure throughout the entire curing cycle. It was to overcome the limitation of Mooney Viscometer that Oscillation Disc Rheometer (ODR) was developed. The ODR produces a rheograph from which one could monitor processing, vulcanisation and the physical properties of the material being tested. While processability is the ability to process the compounded rubber in its uncured stage to convert it into a suitable form by milling, extrusion, etc. for curing, viscosity determined the force required to extrude or form the compound into a given shape. This processing indicates the amount of heat history which can be tolerated before the rubber is converted from a moldable stage to vulcanised rubber stage where further processing becomes impossible. During the curing or vulcanisation phase the modulus (sic) of compound increases as chemical crosslinks are formed. The Rheometer shows this as torque increases with time. Cure rate determines the amount of time the product must remain in the mold to attain the required final state. The final stage of curing cycle is the attainment of maximum state of cure, which can be related to stress/strain properties i.e. modulus/hardness. Collector (Appeals) had also referred to HSN Explanatory Notes which explained what type of Viscometers are covered under Heading 90.27 and had further indicated that Viscometers and the like are used to determine Viscosity, i.e. internal friction of a liquid.

5. We have considered the submissions made on both sides. The case of the appellants is that the function of Rheometer is basically to monitor processing and vulcanisation of rubber. Apart from this, it also tests the physical properties of the material tested. Its main function is the checking/measuring of Viscosity, vulcanisation and final stage of curing. According to appellants, measuring of torque was an insignificant part of its functions. The Asstt. Collector had on the other hand misinterpreted the technical literature (catalogue) and come to the conclusion that the item in question is classifiable under Heading 90.24 instead of Heading 90.27. Collector (Appeals) also, according to the Appellants, had gone by the wrong premise that the main function of Rheometer model ODR 2000 is measurement of torque at different intervals.

6. The relevant portions of the two Chapter Headings read as follows :

Heading 90.24 :

“Machines and appliances for testing hardness, strength, compressibility, elasticity or other mechanical properties of materials (for example, metals, wood, textiles, paper, plastics)”.

Heading 90.27 :

“Instruments and apparatus for physical or chemical analysis (for example polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus), instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface, tension or the like; instruments or apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes”. (Emphasis supplied).

7. From a plain reading of the two headings it would appear that the main difference between Heading Nos. 90.24 and 90.27 is that whereas the former covers machines/appliances used for testing the mechanical properties of materials the latter covers instruments and apparatus used for physical or chemical analysis and for measuring/checking viscosity, porosity, expansion, surface tension etc. We observe from the photocopy of the Catalogue relating to Rheometer ODR 2000 filed by the applicants, under the heading “Application to Process Control” it has been stated as under :

“The ODR 2000 produces a rheograph from which you can monitor processing and vulcanisation characteristics as well as physical properties of the material being tested. Typically, a rheograph may be divided into three regions.

Phase I gives an indication of the processing characteristics of the compound. Phase II indicates cure characteristics or rate of cure. Phase III gives the compounder an indication of the physical properties of the final product".

8. We find that the Collector (Appeals) had based his conclusion that the item is classifiable under Chapter Heading 90.24 on the fact that Disc Rheometer “does not measure just viscosity as contended by the appellants but gives an indication of achievement of the required physical properties of compound rubber over a period of curing”. On the other hand, from a reading of the relevant extracts of the Catalogue it is observed that Rheometer ODR 2000 imported by the appellants clearly answers the description of the category of instruments/apparatus used for the physical or chemical analysis of the materials tested (including viscosity) covered under Chapter 90.27 inasmuch as it carries out the physical/chemical analysis of compounded rubber, including viscosity. In this context, we agree with the appellants’ contention that the measurement of torque is only one of the functions of the instrument and its main function is the checking/measuring of viscosity and vulcanisation and the final stage of curing.

9. In the light of the foregoing we hold that the instrument Oscillating Disc Rheometer ODR 2000 imported by the appellants will be correctly classifiable under Customs Tariff Heading No. 9027.80. Inasmuch as the said item is an apparatus whose operation depends on electrical phenomenon which varies according to the factor to be ascertained. We also hold that it is eligible for the benefits of Notification No. 158/89.

10. The impugned order is accordingly set aside and the Appeal allowed with consequential benefits to the appellants.

Equivalent 1999 (105) ELT 150 (Tribunal)