Customs, Excise and Gold Tribunal - Calcutta
Modern Malleable Ltd. vs Commissioner Of Central Excise on 28 November, 2007
Equivalent citations: 2008(125)ECC274, 2008(151)ECR274(TRI.-KOLKATA), 2008(225)ELT460(TRI-KOLKATA)
ORDER D.N. Panda, Member (J)
1.1 The Appellant being aggrieved by the order dated 10.1.2000 passed by the Tribunal in Appeal case No. 1608/92-B and E-219/93 carried its grievance to the Hon'ble Supreme Court in Civil Appeal No. 4213-4214/2000 and consequent upon direction of the Hon'ble Supreme Court by order dt. 29.9.05 this matter is again before Tribunal to rehear on the issues meant for decision by that order.
1.2 The dispute by the Appellant all along was relating to classification of various goods declared by it in the classification list filed before the Department seeking effect thereof from 20.3.90. Revenue not being satisfied with the Classification adopted by the Appellant issued Show Cause Notice (SCN) dated 13.7.1990 seeking reason as to:
(1) Why the classification of products declared in the Form-I No. 1/MMCW/U-1/89-90 effective from 20.3.90 should not be considered for approval according to their constituent material and in the process why the products declared under 7308.00 should not be classified under 7326.90 subject to the condition that the constituent materials are predominantly of Iron & Steel and not identified as individual products;
(2) Why the products declared under heading 3548.00 should not be classified under 7616.90 as articles of Aluminium; and (3) Why Bus bar etc. should not be classified under 7608.20 as Aluminium Tubes attracting duty thereon as per constituent material and the nature of products manufactured in terms of Notes in Section XV, XVI of Central Excise Tariff Act, 1985.
1.3 While seeking reason on the above proposition, Department made known the Appellant that it declared in the Form-I in question different type of strain Hardware fittings, Earthwire suspn. Hardware fittings, Tension Hardware fittings, stock bridge vibration Dampters, transmission line structure/tower, Pole line Hardware consisting of bolts, nuts, washers etc. under heading 73.08 as articles of Iron & Steel structures attracting duty @ 15% Adv. It was also stated that the Appellant declared in the said Form-I under sub-heading 8548.00 the products namely conductor Accessories, Misc. fittings i.e. P.G. clamps, Repair sleeves etc. and Grip forms Moformed grip of various forms i.e. retaining Roads, P.A. Rods etc. and also insulators connectors & fittings & components of above items without giving the names of constituent materials, which appeared to be willful suppression of facts. It was also informed that on visit to the factory by Anti-Evasion unit of Howrah North Division on 4.4.90, the representative of the company admitted in writing that all the products manufactured are predominantly made of either Iron, Steel or Aluminium. It was further informed that Repair sleeves, Midspan compressing Joint, P.A. Rods and P.G. Clamps were manufactured predominantly from Aluminium Tubes and all these products were cleared individually. SCN further informed the Appellant that suspension & Hardware fittings, conduction accessories and Insulator fittings, Pole line Hardware were predominantly manufactured from Iron Steel and were cleared in sets in semi knocked down condition on all the above reasons and basis. The appellant was granted opportunity of hearing.
1.4 On hearing of the matter on the allegations in the SCN, the Assistant Collector passed an order dated 28.12.90 classifying the goods, levying duty as under:
(a) All Hardware fittings, conductor accessories except Tubular Bus bar of Aluminium, connectors & fittings, Grip forms moformed Grip and components, made whole or predominantly of Iron or steel under subheading 7326.90 shall attract Central Excise duty @ 15% Adv. (B) + 5% spl. of basic.
(b) All Hardware fittings, conductor accessories except Tubular Bus bar of Aluminium, connector & fittings Grip forms moformed grip and components, made whole or predominantly of Aluminium under subheading 7616.90 shall be liable to duty @ 30% Adv. (B) + 5% spl on basic.
(c) Tubular Bus bar of Aluminium under subheading 7608.20 attracts duty @ 35% Adv. (B) + 5% spl on basic.
1.5 While passing order of adjudication, the learned Adjudicating Authority observed that the term 'Predominent' is applicable for the products fitted with other item manufactured or purchased of more than one metal giving them the essential character of the complete goods.
2. Being aggrieved by the order in original dt. 28.12.90 the appellant went in Appeal to the learned Collector Appeals. That Appellant Authority by order dt. 28.6.91 decided the matter against the Appellant holding as under:
I have gone through the records of the case, the grounds of appeal and the submissions made at the time of hearing. In this connection it appears that the appellants have not disputed the facts that some of the items of their products were made of wholly or predominantly of other metals viz. Iron & Steel and Aluminium. According to Section XV to CETA, 1985 the articles are to be classified as per constituent base metals. In the instant case I find that some of the articles are made/wholly or predominantly. In such case it would be appropriate to take recourse to the constituent base metals as basis for classification of the goods under Chapter headings in which the articles of the base metal are covered. In this consideration the classification held by the Asstt. Collector is correct in law. The appeal, therefore, fails to succeed on merit and is rejected upholding order of the lower authority.
3.1 Being further aggrieved by the order dated 28.6.91 passed by the learned first Appellate Authority, the Appellant came in Appeal to Tribunal and such appeal was registered as E/Appeal No. 1608/92-B and E-219/93. The appeal so registered was disposed by order dated 10.1.2000 and order of lower Authority was confirmed. The goods involved in the dispute as observed by the Tribunal in para 5 of its order were:
conductor Accessories and Miscellaneous Fittings - Ferrous and Non-Ferrous - P.G. Clamps, Repair Sleeves, Compressor Joints, Suspension Clamps, Snail Clamps, Tubular Busbars, Busbar Joints and Sleeves, Busbar Compress, Spacers, Spacer Dampers, Loop Dead-end, Come-along, T. Connectors, Tapes; Insulator Connectors and Fittings - Ball Hook, Horn Holder, Ball Link, Y Clevis Eye, Y Ball Clevis, Clevis Link, Anchor Shackle, Twisted Shackle, Yoke Plates, Socket Eye, Horn Holder Socket Eye, Socket Clevis, Horn Holder Socket Clevis, Arching Horn Sag Adjustment Plates; Grip Forms; Moformed Grip of various forms - Retaining Rods, P.A. Rods, AGS Rods, Conductor Dead-end, Distribution Tie, Side Tie, Line Splice, Spool Tie, L. T. Guy Grip Dead-end, Lashing Rods, Tangent Support, Insulator Link Assembly, Twin Grip Tie. These are all items used as accessories/fittings in electrical transmission lines.
3.2 Principal grievance of the Appellant before Tribunal was whether transmission lines were machinery or apparatus. It was observed by the Tribunal that "Transmission lines basically consist of electricity conducting cable and tower for supporting and keeping the cables in position etc. These transmission cables cannot be called machinery or apparatus at all. That being the position of transmission lines, accessories and fittings used in the transmission lines would not qualify to be considered as electrical parts of machinery or apparatus. As against this, sub-heading 73.26-76.60 covers article of iron and steel and articles of aluminium. There is no dispute that the items in question are articles and are made out of iron and steel or aluminium. Therefore, they were rightly classifiable under this heading depending upon the metal of which they are made. Further, Note 1(f) of Section XV, which section relates to classification of "base metals and articles of base metals" states that Section XV "does not cover the articles of Section XVI (Machinery, mechanical appliances and electrical goods). Section XVI relates to classification of machinery, mechanical appliances, electrical goods and their parts. Since the goods in question are not parts of machinery or apparatus as already held, their correct classification in terms of Note 1(f) to Section XV is under Section XV. The order under challenge before Tribunal was confirming the classification of the goods under the relevant Chapter 73 & 76 falling under Section XV."
4. With the above observations the Tribunal came to the conclusion that classification confirmed by the Learned first Appellate Authority upholding the order of adjudication was proper. Against such dismissal, the Appellant approached Hon'ble Supreme Court, in Civil Appeal No. 4213-4214/2000. Disposing the Appeal, the Hon'ble Apex Court held that by reasons of the provisions of Section Note 1(f) of Section XV, the Tribunal must address itself to the question whether the transmission lines could be apparatus at all. It was also held that there is no invariable test to determine the question of classification. It would depend upon the nature of the tariff heading. The constituents or the elements of a transmission cable would not be of any relevance in deciding whether a transmission cable is an apparatus or not and if the Tribunal comes to the conclusion, despite the material being produced before it, that the transmission lines are not electrical apparatus, then of course, there is no question of the appellant's goods being classified under tariff heading 85.48. However, if the Tribunal comes to the conclusion that transmission lines may be apparatus, then the further question would arise whether the products manufactured by the appellant could be described to be electrical parts. It was further held that if the Tribunal feels that it is not possible for it to classify the several products produced by the Appellant and which are the subject matter of show cause notice by reason of their very number it will be open to the Tribunal to lay down the principle and lead the determination and implementation of such decision to the adjudicating officer.
5.1 Consequent upon direction of the Hon'ble Supreme Court in the aforesaid Civil Appeal, the Appellant appeared before this forum on different dates and filed few technical literature as well as argued on its stand submitting written note precisely stating its arguments as under:
(1) That the parts and accessories were earlier classified by the Central Excise Authority under Tariff Heading 85.48 of Central Excise Tariff Act, 1985 as electrical parts of machinery or apparatus not specified or included elsewhere. But relying on C.B.E.C. Circular dated 5.7.1989 such a long standing approved classification was changed by the self same authority.
(2) That the change of classification made by the authority related to the heading dealing with base metal content of the component/parts which inter alia meant that if the component is made of steel metal then it should be covered by Chapter 73 of the Tariff list to be known as articles of iron and steel. Similarly if the component is made of aluminium (non-ferrous) it was sought to be classified under Chapter 76 of the Central Excise Tariff, but not as component of parts of H.T. Electric Transmission Lines which were earlier classified under Tariff Heading 85.48 of Central Excise Tariff Act, 1985.
(3) According to the technical and commercial understanding based on ISI specification and the customers' specification/requirement and as per understanding in the power sector the parts made from ferrous or non ferrous metal ought to be covered under the category of electrical parts/components. With regard to the components/electrical parts manufactured/supplied by the Appellant those were purely technical in nature since those were electrical parts and such parts are machineries or apparatus for technical purposes.
(4) The goods manufactured by the Appellant were tailor-made components and sub-assemblies required for various Electricity Boards and power generating organizations for transmission of high tension power. This aspect is also in accordance wit the C.B.E.C.'s Circular dated 5.7.1989.
(5) The goods manufactured were being tailor-made and purely technical in nature those were subject to test certificate and test report issued by various institutions and Revenue cannot apply its own criteria brushing aside market parlance.
(6) The goods manufactured by the Appellant for supply to power sector were not general hardware items and not available in the hardware market. Those are totally distinguished and altogether goods to serve the purpose of power sector.
(7) The overhead transmission lines are a part and parcel of power transmission system and the goods in question manufactured by the Appellant were electrical parts of overhead transmission lines and calls for classification under heading No. 85.48.
(8) The goods manufactured being according to ISI specification and meant for power transmission lines those cannot be erroneously classified under chapter 73 of Central Excise Tariff Act, 1985. The Appellant should be given benefit of the judgment of the Hon'ble Supreme Court in the case of G.S. Auto International Ltd. v. CCE-Chandigarh . In view of the similarity in nature of the goods when the parts and accessories of motor vehicle made of ferrous/non-ferrous metal were not covered under the heading 73.18 to 87.05, but appropriately under the heading 87.08, the appellant cannot be denied of classification of its goods under heading 85.48.
(9) The Tribunal having considered that the goods meant for use in manufacture of wooden furniture being classifiable under the heading 83.02.90 in the case of Earl Bihari Pvt. Ltd. v. CCE-Mumbai 2000 (41) ELT 971(CEGAT) instead of heading 7326.90, the Appellant deserves consideration for its goods in the light of the ratio laid down in that case.
(10) Following the Apex Court's decision in the case of H.P.L. Chemicals Ltd. v. CCE-Chandigarh holding that burden of proof lies on the department to prove that the classification intended by them was proper, such burden not having been discharged by the department the Appellant should not be put to adversity.
(11) The technical literature submitted by the Appellant shows that the transmission lines are nothing but machineries or apparatus for the object of transmission of energy. The Appellant's products were electrical parts in view of the equipment directly coming in contact with electricity on a transmission line and those are apparatus of transmission lines.
(12) Entire list of goods being directly coming in contact with electricity and electrical conductor those are of electrical parts and apparatus. The electrical parts, accessories and component coming directly in contact with electrical conductors are no way different from electrical parts.
(13) The test certificate from N.T.H., Calcutta, I.I.T. Kharagpur, Jadavpur University, Calcutta show that the goods have property to respond to the electrical system and electrical parts entitled to be classified under the heading 85.48 claimed by the Appellant.
5.2 A technical write up was also filed by the Appellant which reads as under:
Technical write-up on Parts/Components directly required /exclusively meant for HT Electrical Power distribution system .
Having regard to Classification desired under Chapter Heading 85.48 it is quite relevant to note that (1) the items manufactured are Electrical parts (2) the parts are machineries or apparatus for electrical purposes and that (3) the towers or pylons are not electrical parts and as such they are covered under Chapter 73 of CET. The following submissions dealing with Technical aspects would also be quite relevant.
Electricity is available to mankind by a combination of 3 process:
1. Generation of electricity
2. Transmission of electricity
3. Distribution of electricity A). Transmission lines as machinery or apparatus for electricity Generation of electricity is done through generators. Generators are known to be nothing but machineries or apparatus for electricity generation.
Simply transmission of electricity is done through transmission lines. Their purpose is identical to generators, the difference being generators generate the electricity whereas transmission lines transmit the electricity. In view of this, Transmission lines are nothing but machineries or apparatus for electricity. This is just like generators are for generation of electricity, the transmission lines are for transmission of electricity.
B) Appellant's products are electrical parts Having established that transmission lines being machineries and apparatus of electricity, any equipment directly in contact with electricity on a transmission line is nothing but a part or apparatus of transmission lines.
The Appellant's products basically are classifiable into two types:
(1) Products which are attached to the power carrying electrical conductors and are installed without joining.
(2) Products which are same as above, but are installed with joining.
In either case, the products would always remain in direct contact to the electrical conductor which is carrying the electricity.
In view of the same, since the products are always in electrical contact, they can be always designated as "electrical parts".
(C) Tower not electrical part Tower or pylons are mechanical structures and are never in direct contact with electricity. Hence they cannot be designated as electrical parts.
Moreover, the towers are also insulated to electricity by insulators which are installed in between the towers and the Appellant's manufactured products. So electricity does not pass on to the towers, which remain electricity insulated. So, any classification for towers which is under a mechanical heading should be justified. They cannot be classified under electrical heading since they are not in electrical contact or carry any electricity with them. These are embedded to earth.
Also the following additional points may be noted:.
a) Appellant's products directly carry the current in them and as such they are the electrical parts. It is required to guarantee electrical resistance and the power loss of the products to the customers, which are nothing but electrical properties.
b) The parts are not part of towers because they are always directly in contact with electrical conductors and hence are electrical parts. Some photographs of equipment are enclosed which would show the parts directly attached to power carrying electrical conductors.
In support of above contentions, enclosed here with some test certificates from NTH, Calcutta; IIT, Kharagpur; Jadavpur University, Calcutta for electrical tests of the products. Some Test Certificates for High Voltage Tests on the products certified from Deptt. of High Voltage Engineering, Indian Institute of Science, Bangalore and Central Power Research Institute, Bhopal which also relate to electrical properties are also enclosed. Also enclosed extract of the order placed by MPSEB on the Appellant indicating supply of materials together with their characteristics.
Encl:-Photographs
-Copies of test certificates.
5.3 To support its arguments, the ld. Counsel for the Appellant relied on the decision in (1) Jawahar Metal Industries Ltd. v. CCE-Meerut , (2) Kerala Electric Lamp Works v. CCE-Cochin (3) CCE v. Weldekar Laminates Pvt. Ltd. (Re: Rule 57A Central Excise Rules), (4) Consolidated Petrotech Industries Ltd. v. CC . He also relied on the meaning of the term "apparatus" given in the Webster's New Dictionary And Thesaurus (Concise Edition) which reads as under:
Apparatus things prepared or provided for a specific use; any complex machine, device, or system. [L ad, to, paratus (parare), prepared.] He also cited dictionary meaning of the above terms from different dictionaries as under:
Apparatus - It is a collection or set of materials, instruments, appliances or machinery designed for a particular use (Mav. Web. Dic.). A compound instrument designed to carry out a specific function. (McGraw Hill Dic. Of Sc. & Tech. Terms).
He further relied on the meaning of apparatus from the Webster's Encyclopedic Unabridged Dictionary of the English Language which reads as under:
ap.pa.rat.us(ap'a rat'as.-ra'tas).n, pl.-tus, -tus.as.
1. a group or aggregate of instruments, machinery, tools, materials etc., having a particular function or intended for a specific use. 2. any complex instrument or machine for a particular purpose. 3. any system or systematic organization of activities, functions, processes, etc., directed toward a specific goal: the apparatus of government; espionage apparatus. 4. Physiol, a group of structurally different organs working together in the performance of a particular function: the digestive apparatus. [< L < apparatus (ptp. Of apparare) provided, equiv. To ap-AP-1 + par - prepare + -dtus -ATE1] ap.pa.ra.tus crit.l.cus (ap'pa'ra'toos krit'I koos'; Eng. ap'a rat' es krit'ekes, -ra'tes), Latin.supplementary information as variant readings added to a text to provide material for study or criticism.
To explain the term transmission he relied on the terminology from the above dictionary which reads as under:
Trans.mis.sion (trans mish'en, tranz-), n. 1. act or process of transmitting. 2. fact of being transmitted. 3. that which is transmitted. 4. Mach. A transference of force between machines or mechanisms often with changes of torque and speed. b. a compact, enclosed unit of gears or the like for this purpose, as in an automobile. 5. Radio. The broadcasting of electromagnetic waves from the transmitting station to the receiving station. [< L transmission- (s. of transmissio) a sending across, equiv. To transmiss(us) sent across (ptp. Of transmittere) + -ion- -ION. See TRANS-, MISSION] - trans.mis.sive (trans mis'iv, tranz-), adj. - trans-mis'sive.ly, adv. - trans.mis'sive.ness, n.
The meaning of transmission line was relied from the Dictionary of Science and Technology published by Allied Chambers (I) Ltd., which reads as under:
Transmission line (ElecEng) General name for any conductor used to transmit electric or electromagnetic energy, eg power line, telephone line, coaxial feeder, G-string, waveguide etc. Also for the acoustic equivant.
The Learned Counsel further relied on McGraw-Hill Dictionary of Scientific and Technical Terms, apparatus which reads as under:
Apparatus [SC TECH] A compound instrument designed to carry out a specific function.
From the said dictionary the meaning of the term power transmission line and power transmission tower were cited as under:
Power transmission line [ELEC] The facility in an electric power system used to transfer large amounts of power from one location to a distant location: distinguished from a subtransmission or distribution line by higher voltage, greater power capability and greater length. Also known as electric main main (both British usages). {'pauer tranz'mish.en fin} Power transmission tower [ELEC] A rigid steel tower supporting a high-voltage electric power transmission line having a large enough spacing between conductors, and between conductors and ground, to prevent corona discharge. {'patr.er tranz'mish.en, tau.er}
6. Ld.SDR appearing for Revenue supported orders of the Authorities below and submitted that the conductors manufactured by the Appellant shall not be called "apparatus" and most particularly transmission line by no stretch of imagination could be "apparatus" at all when such goods are popularly in energy sector known as "conductor". No one buys "conductor" asking the seller to sell "apparatus". Both buyers and sellers are acquainted with the goods as "conductor". Each and every item of the goods were subject matter of examination when Classification list was submitted for approval. But the Appellant having failed to demonstrate its case for Classification as claimed by it before the Apex court those were bound to be classified as that appears in order of adjudication. Both the appellate orders with elaborate reason rightly dismissed plea of Appellant. Dictionary meaning relied by Appellant is of no help to them when the impugned goods by their very nature are identified as they suggest to be so in market and well known to trade and commerce. The points raised by Appellant in their written note do not bring their case to any new diamension for consideration and to have different view for reclassification at all.
7.1 Heard both sides extensively and gone through various documents produced before us by both sides as well as citations relied upon by them. The moot question that arises in this appeal for consideration is whether transmission line could be apparatus and if that be so, further question that arises for consideration is whether the products manufactured by the Appellant could be described to be electrical parts.
7.2 In the field of energy "conductors" are used for transmission of power from one end to the other stringing overhead lines by virtue of their basic property as carrier of energy. Examination of technical literature submitted by the appellant, shows that conductors are usually manufactured twisting 7 wires, 19 wires, 37 wires or 61 wires etc. made of copper or aluminium or alloy and the wires are of different diameters like 2 mm, 2.5 mm, 3.15 mm or 4.26 mm etc. depending on requirement of buyers like Electricity Boards, NTPC etc. Steel cores are also used to enhance utility thereof and following types of conductors are normally manufactured and traded in the market.:
Nature of Conductor Abbreviation Steel cored Aluminium Conductor -
ACSR/SCA Steel cored Aluminium Alloy Conductor -
AACSR All Aluminium Conductor -
AAC All Aluminium Alloy Conductor -
AAAC Galvanised Steel Stranded Conductor -
GW Copper Stranded Conductor -
COPPER 7.3 Technical literature at page 15 of paper book filed by the Appellant also shows that conductors are recognized in market by different code words depending on the make, strength, diameter, stranding and the composition of aluminium, steel, copper and alloys etc. To name a few, those are: mole, swan, sparrow, fox, rabbit etc. Such goods are bought and sold as conductors known to buyers and sellers as such and used for building transmission system. Transmission of power enables distribution thereof. Thus the goods being primary as such builds the system and indispensable.
7.4 Meaning of the expression "transmission line" in the Dictionary of Science & Technology published by Allied Chambers (I) Ltd. relied upon by the Appellant, shows that transmission line is general name for any conductor used to transmit electric or electro-magnetic energy, for example power line, telephone line, coaxial feeder G-String, web guide etc. This follows that while conductors are used for flow of energy for distribution thereof, regulation, control and conversion thereof is done by other peripherals or instruments called "apparatus". These apparatus being secondary goods serve specific purpose while conductors being principal goods serve general purpose of power transmission.
7.5 It is an established rule of Classification that once the goods satisfy the basic characteristics then its shape etc. would be immaterial as held in Paharpur Cooling Towers Pvt. Ltd. v. Collector . For a particular good to qualify as "apparatus" it should necessarily to serve a specific purpose and should have a specific function. Flow, regulation and control of power are normally done by switches control panels etc. and those are functions at the secondary stage of power transmission while transmission is primary and possible even without these apparatus through the transmission line. Voltage is regulated through converters serving specific purpose for which these are all called "apparatus". Hon'ble Supreme Court in the case of CC v. C - Net Communications (I) (P) Ltd. held that the word 'apparatus' would certainly mean the compound instrument or chain of series of instrument designed to carry out specific function or for a particular use (in para 17). It follows that "apparatus" are normally instruments or equipments enhancing, reducing or controlling certain function of a principal system and does specific function or serve specific purpose. Conductors do not belong to such category being principal goods building the system itself. However Conductors belong to the parentage of electrical goods falling under Chapter 85 of Section XVI without being classifiable by its content and "matter" it contains, under Section XV of Central Excise Tariff Act, 1985. Most particularly Section Note 1(f) of Section XV of the said Act. excludes articles of Section XVI which are machinery, mechanical appliance and electrical goods. Thus technical or dictionary meaning is of no assistance when the usage and market parlance are a better guide to understand the nature and characteristics of conductors for the purpose of classification [See: CCE v. Krishna Carbon Paper Co. ].
7.6 While the word "apparatus" has been used in the headings: 85.17, 85.35, 85.36 and 85.43 of the Central Excise Tariff Act, 1985 throwing light that they have the characteristic of an accessory to serve a specific purpose, the word "conductor" has been recognized by Central Excise Tariff Act in heading 85.44 of Chapter XVI as well as in Notification No. 69/86-CE dt. 10.12.86 as amended by Notification No. 13/86-CE dt. 1.3.86, 231/86-CE dt. 3.4.86, 395/86-CE dt. 22.8.86, 106/88-CE dt. 1.3.88. This clearly conveys legislative intent that conductors shall not fall under entry 85.48 but under entry 85.44 of CETA, 1985. The headings 85.17, 85.35, 85.36, 85.43 and 85.44 at the relevant point of time read as under:
Hdg.
Sub-Hdg.
Description of goods Duty rate (1) (2) (3) (4) 85.17 8517.00 Electrical apparatus for line telephony or line tele-graphy, including such apparatus for carrier-current line-systems 20% 85.35 8535.00 Electrical apparatus for switching or protecting electricals, or for making connections to or in electrical circuits (for example, switches, fuses, lightning arresters, voltage limiters, surge suppressors, plugs, junction boxes), for a voltage exceeding 1,000 volts 20% 85.36 8536.00 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders, junction, boxes), for a voltage not exceeding 1,000 volts.
85.43 8543.00 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this Chapter 15% 85.44 8544.00 Insulated (including enameled or anodized) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 30% Thus the inevitable conclusion that can be drawn is that conductors are not "apparatus".
7.7 From an analysis of the technical literature, meaning of transmission line in technical dictionary as well as market parlance, nature of the goods and the relevant tariff entries as aforesaid under Chapter XVI of CETA, 1985, it would appear to be proper to hold that the conductors are electrical goods but not "apparatus" and also to hold so, we are guided by following principles of interpretation of taxing statutes:
(1) In Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) 1 KB 64 at p. 71, it is stated:
...In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.
[See also State of West Bengal v. Kesoram Industries Ltd. and Ors. ].
(2) It is also well-known that the one and the only proper test in interpreting a section in a taxing statute would be that the question is not at what transaction the section is according to some alleged general purpose aimed, but what transaction its language according to its natural meaning fairly and squarely hits. [See St. Aubyn (LM) and Ors. v. Attorney General (No. 2) (1951) 2 All ER 473, p. 485].
(3) While interpreting valuation or classification contained in the Tariff Act, one cannot lose sight of the legal text contained in the Chapter Note explaining the meaning of the entry and in absence of its applicability thereto the general rules of interpretation [See: CCE v. Wood Polymers Ltd. , O.K. Ply (India) Ltd. v. CC ].
(4) While construing a taxing statute, the existing market practice may also be taken into consideration. [See: UOI v. Sahney Steel and Press Works Ltd. , Indo International Industries v. CST , Dunlop India v. UOI 1983 ELT 1566, 1576 (SC), Asian Paints India Ltd. v. CCE , CC v. Swastik Woolen Pvt. Ltd. .
(5) Furthermore, for the purpose of interpretation of a taxing statute, the fiscal philosophy, a feel of which is necessary to gather the intent and effect of its different clauses should be applied. [See K.P. Verghese v. Income Tax Officer, Ernakulam and Anr. ].
(6) A consideration of public policy may also be relevant in interpreting and applying a taxing Act. [See Maddi Venkatraman and Co. (P) Ltd. v. Commissioner of Income Tax ].
(7) While making the exercise of Classification, the Authority may be guided by the important tests/parameters prescribed by the Hon'ble Apex Court in O.K. Play (I) Ltd. v. CCE as under:
(1) HSN along with Explanatory Notes provides a safe guide for interpretation of an entry.
(2) Equal importance to be given to Rules of Interpretation of the Tariff.
(3) Functional utility, design, shape and predominant usage have also got to be taken into account.
8. In view of our analysis and finding as above, we are of the considered view that various tests of classification as referred to in the foregoing paragraphs, the transmission line cannot be considered as electrical "apparatus". Consequently, the claim of the Appellants for classification of the impugned goods as parts of electrical "apparatus" does not succeed. Hence, the classification approved by the Authorities below in accordance with the material used in the impugned goods is in order and therefore we uphold the impugned order. Thus the Appeals filed by the Appellants fail and the same are dismissed.
10. I fully concur with the conclusions arrived at by my learned brother in the order recorded above and I would like to add that transmission lines carry electricity from one point to another, whereas electrical machinery and apparatus use electrical energy for performing specific functions and carrying out specific work. As such, the distinction between transmission line and electrical machinery/apparatus is very clear. Hence, transmission lines can not be classified as electrical machinery.
(Pronounced in the open court on 28/11/07)