Customs, Excise and Gold Tribunal - Delhi
S And S Power Switchgear Ltd. vs Collector Of Customs on 2 November, 1988
Equivalent citations: 1989(39)ELT445(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. The Assistant Collector of Customs, Madras issued a notice to the appellants under Section 28 of the Customs Act, 1962 in respect of duty amounting to Rs. 20,248.71 paise. The ground for the demand was that power fuse bodies imported by the appellants were correctly classifiable under Item 85.18/27(1) instead of Item 85.18/27(3), under which they were originally assessed. The Assistant Collector held that fuse bodies are correctly assessable to duty under sub-item (1) of Item 85.18/27 and confirmed a part of the demand amounting to Rs. 8,858.51 paise.
2. The Collector of Customs (Appeals) rejected the appeal and upheld the Assistant Collector's order after considering the appellant's grounds in detail. Hence the present appeal.
3. We heard Shri S. Subramanian, Consultant for the appellants, considered the written arguments filed by Shri Nair, the learned SDR and the counter arguments filed by Shri Subramanian on behalf of the appellants.
4. When the fuse bodies were imported they were classified under Heading 85.18/27(3) as components of electrical apparatus for the protection of electrical circuits. Later the Custom House changed its view and thought that the goods should be reclassified under sub-heading (1) as insulating fittings. The appellants' plea is that the fuse-body is used for the protection of electrical circuits and the fuse-bodies imported were specially designed components of the fuse. Further these fuse bodies were made of cordiorit and not of porcelain. The thermal characteristics of cordiorite are high thermal conductivity and low co-efficient of thermal expansion. Cordiorite is different from porcelain.
5. The Collector took the view that the fuse bodies were made completely of insulating material and, therefore, could not be considered as part of fuse but as insulating fitting in general. The Collector appears to have been guided by the explanatory note to Heading 85.26. Since the fuse-body was made of insulating material there was no difference whether it was cordiorite or porcelain. The appellants' plea is that if the fuse-bodies are to be classified as insulation fittings they should be wholly of insulating material and they should be designed for insulating purposes even though they have other functions also. They submit that the fuse bodies even though made wholly of insulating material, have not been specially constructed for insulating purposes. The fuse bodies are primarily constructed asking note of the thermal characteristics of the material cordiorite and, therefore, the item falls outside the scope of Heading 85.26 and is correctly classifiable under Heading 85.18/27(3).
6. They also submitted that their plea against applying the Tariff Advice No. 2/80 to the present consignment which was imported long before the tariff advice was not considered by the Appellate Authority.
7. Shri Nair on behalf of the Revenue opposed the arguments. He argued that the expression "Electrical Apparatus for making and breaking electrical circuits for the protection of electrical circuits or for making connections to or in electrical circuits" appearing in Heading 85.19 of the CCCN. Similarly, the expression "insulating fittings for electrical equipment in the item (85.18/27) is reproduced from Heading 85.26 of the CCCN.
8. As the expression "electrical apparatus for making and breaking electrical circuits, for the protection of electrical circuits or for making connections to or into electrical circuits" appearing in Heading 85.18/27 is reproduced in a separate sub-item (iii), there is no sub-item for the expression "insulating fittings for electrical equipment". Therefore, according to the learned DR insulating fittings for electrical equipment should fall under 85.18/27(1) (not elsewhere specified). He argued that with reference to CCCN the goods are classifiable under 85.26 and invited our attention to page 1464 of the CCCN explanatory notes to argue that insulators fall under Heading 85.26. He drew our particular attention to the following parts of explanatory notes:
"(a) Page 1446 of the CCCN Explanatory Notes:- parts of fuses made wholly of insulating material fall under Heading 85.26 and not under Heading 85.19
(b) Page 1464 of the CCCN Explanatory Notes : All fittings for electrical machinery, appliances or apparatus which are wholly of insulating material and which are designed for insulating purposes, even though at the same time they have other functions, fall under Heading 85.26.
(c) Page 1464 of the CCCN Explanatory Notes: It is not necessary that insulation material should be made of porcelain. It can be made of any material e.g. glass, ceramics, stealite etc...."
9. We have considered the arguments of both sides made in person as well as writing. We have also examined Heading 85.26 of the CCCN according to which there are two conditions to make a particular article classifiable under that heading. The two conditions are that the article is made wholly of insulating material and that it should be designed for insulating purposes even though at the same time it has other functions. The exception attached to the heading is that it does not cover fittings which even though made wholly of insulating material have not been specially constructed for insulating purposes. In the present instance there is no doubt that the fuse bodies are made wholly of insulating material, but there is no finding that they are constructed for insulating purposes. The submissions made by the appellants indicate that these are not so constructed. For this reason the goods are not classifiable under Heading 85.26 and are, therefore, excluded from sub-item (I) to Item As a result, the goods are correctly classifiable under sub-item (III) of the heading.
10. The appeal is thus allowed.