Customs, Excise and Gold Tribunal - Delhi
Larsen And Toubro Ltd. vs Collector Of Customs on 17 July, 1991
Equivalent citations: 1992(37)ECC46, 1991ECR233(TRI.-DELHI), 1992(57)ELT443(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. This is an appeal against the order passed by the Collector of Customs (Appeals), Bombay. Briefly stated the facts of the case are that on the basis of the description of the goods in the suppliers invoice, the appellants declared the imported goods in the bill of entry as "Pressure, Vaccum and Level Gauge/Indicators". On the basis of the examination of the goods prior to the clearance, they were assessed as 'tube and pipe fitting' under Heading 74.07/08 of the C.T.A., 1975. The appellants filed a refund claim on the grounds that goods being in the nature of instruments for checking or controlling the flow, and other variables of liquids were assessable under Heading 90.24(1) of the C.T.A., 75. In support of their claim the appellants filed the manufacturers' catalogue. However, the Assistant Collector rejected the claim for reassessment of the goods on the grounds that it was not possible to co-relate the catalogue with the imported goods since the catalogue did not list any specific part numbers of the goods covered by it. The appeal filed against the Assistant Collector's order was also rejected by the Collector (Appeals) who held that the goods were pipe fittings of 'bronze' classifiable under Heading 74.07/08 of C.T.A., 75 and not "Vaccum and Level Gauges/Indicators" falling under Heading 90.24(1) of the C.T.A., 75.
2. On behalf of the appellants we heard Shri A.K. Varshneya, Executive of the firm. He referred to the invoice pertaining to the disputed goods and pointed out that under the general heading 'Pressure, Vaccum and Level Gauges/Indicators' the goods were described by the suppliers as "VISI-FLO-PLAIN-1" bearing part No. 1430. He referred to the catalogue in respect of 'VISI-FLO, Sight Flow Indicators' issued by the manufacturers M/s. Dover Corporation of U.S.A. and drew our attention to the general description of 'VISI-FLO' according to which they are used as indicators of flow and colour of liquids in the pipelines. He drew our attention to the write up under the heading 'how to order' according to which number 14 refers to the standard temperature range, thermoplastic indicator whereas number 15 refers to high temperature carbon graphite indicator. In regard to the metal of the 'Visi-Flo' the customers can choose between Bronze, stainless steel or Ductile iron, which are to be denoted by the digits 3, 7 and 8 respectively. After having selected the temperature range and metal any of the specified types such as plain, propeller, flapper etc. has to be specified by mentioning the number from 0 to 5 which correspond to the particular type of indicators. Finally any of the listed sizes which vary from 1/4 "to 4" has to be specified. Shri Varshneya explained the number 1430 in respect of the imported 'VISI-FLO-1' indicators denoted that they were of thermoplastic resin and of standard temperature range upto 225° F having stainless steel body and of plain type. He added that the lower authorities had not made any efforts to examine the manufacturers catalogue or the ordering instructions incorporated in it, according to which the imported goods were flow indicators which are essential requirements in all chemical, fertilizer and petro-chemical plants since they indicate at a glance the clarity, flow and colour of liquids. Shri Varshneya contended that the goods in question not being ordinary pipe-fitting, were not classifiable under Heading 74.07/08 of C.T.A. 75 as held by lower authority. He argued that the goods being in the nature of instruments and gauges were correctly classifiable under Heading.90.24(1) of C.T.A., 75.
3. On behalf of the Department Shri K.K. Bhatia, the learned Jt. CDR placed reliance mainly on the order passed by the Collector (Appeals) and contended that the disputed items had to be deemed as pipe-fittings since they were designed for fitment to pipes in chemical plants.
4. We have examined the records of the case and considered the submissions made by both sides. It is seen that the point that arises for consideration in this case is whether the imported 'VISI-FLO' brand sight flow indicators were classifiable under Heading 74.07/08 of C.T.A. 75 as pipe fittings or under Heading 90.24(1) of C.T.A. 75 as instruments or apparatus for measuring or checking or automatically controlling the flow, depth, pressure or other variables of liquids.
5. In order to facilitate reference, we consider it desirable to reproduce below the competing heading of the Customs Tariff Act, 1975 :
Heading No. Sub-heading No. & description of article 74.07/08 Tubes and pipes and blanks thereof 'of copper' hollow bars of copper; tube and pipe fittings (for example, points, elbows, sockets and flanges), of copper;
(1) Not elsewhere specified.
(2) Tubes and pipes and blanks thereof, and hollow bars of nominal bore exceeding 19 millimetres.
90.24 Instruments and apparatus for measuring, checking or automatically controlling the flow, depth, pressure or other variables of liquids or gases or for automatically controlling temperature (for example, pressure gauges, thermostats, level gauges, flowmeters, heatmeters, automatic oven draught regulators), not being articles falling within Heading No. 90.14:
(1) Not elsewhere specified.
(2) Thermostats and humidistats.
6. The lower authorities held that the disputed goods were 'pipe fittings' classifiable under Heading 74.04/08. It is seen that the Chambers Dictionary of Science and Technology defines the term 'pipe-fittings' as :-
"Any piece of the wide variety of pipe connecting-pieces used to make turns, junctions and reductions in piping systems".
7. From the above definition and on a plain reading of the Heading 74.07/08 of C.T.A., 75 it follows that 'pipe fitting' such as joints, elbows, sockets, flanges and other similar items serve mainly as connecting-pieces in piping systems to provide turns, junctions, and reductions. The disputed' VISI-FLO-Sight Flow Indicators' are no doubt used as fitments to pipes but they regulate the flow of liquids in chemical and other industrial plants but they are not used as connecting pieces like common pipe fittings such as joints, elbows, sockets etc. As seen from the catalogue of the manufacturers M/s. Dover Corporation of U.S.A. they are specially designed devices for use in chemical and other industrial plants for indicating at a glance the flow, clarity and colour of liquids in the piping systems. In this regard it is seen that the principle of the 'Flow Indicators' in question as given in the manufacturers catalogue reads as follows :-
"Two important considerations are involved in the basic design of OPW Modular Visi-Flo flow indicators: Modular design which allows the use of any of a variety of indicator assemblies within the same style body, and simplicity of design of the indicator assemblies which minimize the possibility of malfunction and maintenance problems. Where maintenance such as periodic cleaning might be necessary these indicator assemblies are easily removed and replaced as a unit.
Three types of indicator assemblies are available. From among these three types you can choose those which best give you the information you need about the liquid in your lines. A fourth choice is a Visi-Flo body without an indicator assembly for use in lines where color and/or clarity, but not liquid flow, are the primary concerns.
OPW Modular Visi-Flo flow indicators are easy to install, practically maintenance-free and, above all, easy to read whenever you need to know what's happening in your fluid lines."
It is, therefore, evident that the disputed goods were specially designed devices or instruments meant for indicating the flow, clarity and colour of liquids flowing through the pipes in chemical and other industrial plants and not ordinary pipe fittings to serve only as connecting pieces in piping systems.
8. In view of the above discussion we are of the view that the imported 'Sight Flow Indicators' were specifically covered under Heading 90.24(1) of the C.T.A., 75 and their classification under Heading 74.07/08 of the C.T. A., 75 by the lower authorities was erroneous.
9. We, therefore, set aside the order passed by the Collector (Appeals) and allow the appeal with consequential relief to the appellants.