Customs, Excise and Gold Tribunal - Delhi
Sirpur Paper Mills Ltd. vs Collector Of Customs on 4 August, 1983
Equivalent citations: 1983(14)ELT2359(TRI-DEL)
ORDER A.J.F. D'Souza, Member (T)
1. The Revision Application dated 12-2-1980 against Order-in-Appeal No. C3/1897/79, dated 6-10-1979 passed by the Appellate Collector of Customs, Madras, has been transferred by the Government of India to the Tribunal for disposal under the provisions of Sec. 131B (2) of the Customs Act, 1962.
2. On case (said to contain 3 Nos. Complete Control Valve) (no details) was assessed to duty under Heading 84.61 (1) at 60%+15% under B/E No. D-317 dated 7-2-1979 and a claim for refund of duty was filed on 9-4-1979 on the ground that the goods were assessable under Heading 84.61(2) at 40% + 5%. In support of the claim, a drawing was produced but it was stated that no 'catalogue was available. The Assistant Collector held that from the drawing nothing could be concluded to re-assess the goods under sub-item (2) and the write-up produced also does not specifically state how the goods could be re-classified. He, therefore, rejected the claim as inadmissible. At the appellate stage it was contended that the valves are isolating valves and should have been assessed under Heading 84.61(2) and a catalogue in German merely marking the position of the valve and a certificate from their own employee, were produced. Holding that these documents do not show that the goods are isolating valves and that the invoice description shows that they are only Control Valves, the Appellate Collector rejected the appeal.
3. In the present appeal it is stated that three pieces Control Valves being spares for the Soot Blower system of the heat recovery Boiler of the Appellants' Caustic Recovery Plant, were imported from West Germany. Being spares of special size and quality and identifiable and not being capable of any other application, they should have been classified under Heading 84.01/02, wherein Soot Removers are specified. These parts cannot be used as pipe fittings which is confirmed by the German manufacturers in a letter dated 2-7-1979. If, however, Heading 84.01/02 is held to be inappropriate, the only alternative is Heading 84.61(2) as these valves are definitely isolating valves. The rejection by the Assistant Collector was due to non-application of mind and not due to insufficient details furnished since the Custom House should know what a Soot Remover Equipment is, how it functions and what part the Control Valve plays in it, specially when a detailed drawing is made available. The Appellate Collector denied natural justice to the appellants by expecting the German manufacturers to produce an English catalogue and not asking for a translation if the Engineers in the Custom House were unable to understand the illustrations in the catalogue. If the Chartered Engineer's Certificate was to be rejected, its veracity should have been verified independently by a reference, for instance, to the Chief Inspector of Boilers. A very elementary consideration of the basic principles on which the Soot Blower works will show that the Control Valve must necessarily be of the isolating type. The function of an Isolating Valve is to isolate one pneumatic equipment or machine from another pneumatic equipment or machine, when difference in the pressure develops in the unwanted direction or when the difference in pressure exceeds a designed level. The Valve in the Soot Blower does this exact function. The Appellate Collector has merely brushed aside the evidence without justification.
4. Shri A.C. Jain dropped the ground for assessment of the valves as part of Soot Blower under Heading 84.01/02. He stated that Control Valve is a generic term and the suppliers had certified that these valves are Control Valves of isolating type specially manufactured and delivered for a Soot Blower Plant delivered by them. Shri Jain stated that the plant was an obsolete one and these valves had to be specially manufactured. He had provided an English translation of the Mode of Working from the Babcock catalogue which showed the position and functioning of the Control Valves. In the letter dated 8-6-1983 the Suppliers have also certified that these are Control Valves of isolating type. They are, therefore, squarely within the ambit of sub-item (2) of Heading 84.61 and there was no justification for the Department to assess the goods as valves not elsewhere specified under a sub-item (1) of this heading.
5. For the Department, Shri Chatterjee contended that there was no proof that these were isolating valves. The invoice shows they are Control Valves. According to Lyons Encyclopaedia of Valves, Control Valve regulates electrically, hydraulically or electro-hydraulically the flow of liquids etc. and an isolating valve is a hand-operated valve located between the packing lubricating assembly and the packing box assembly in a Control Valve, one of the uses of which is to shut off fluid pressure from the lubricating assembly. The imported goods do not fall within this description. Heading 84.61(2) covers a number of different types of valves, including isolating valves, non-return valves, safety valves, pressure reducing valves, exhaust relief valves, thermostatically controlled valves, solenoid operated valves etc., and according to the Explanatory Notes, all valves are to be classified under heading 84.61. Since this particular type of valve has not been specified in sub-item (2) it is correctly assessable under sub-item (1).
6. In rebuttal, Shri Jain referred to the description of Soot Removers (soot blowers) in Section XVI of the Explanatory Notes to the Brussels Nomenclature, which shows that they consist of a tube (fixed or retractable) with a number of jets controlled by a valve and coupled to the steam or compressed air conduit. This valve, as certified by the manufacturers and by the Chartered Engineer, is an isolating type of valve.
7. We have carefully considered the arguments advanced by the appellants as well as by the Department. The ordinary meaning of a valve is a device that regulates the flow or passage or allows it in one direction only. The certificate of the manufacturers classifying these valves as isolating type of valves, has to be given due weight. The Department is laying stress on the fact that isolating valves are described as hand-operated but they have not been able to positively exclude these valves from sub-item (2) of Heading 84.61. It cannot also be ignored that if these valves, which are undoubtedly required for the Soot Removers, were to be assessed as a part of that machinery under Heading 84.01/02, they would have been entitled to the same rate of duty as that prescribed under Heading 84.61(2). It is only because valves in themselves constitute an article covered by Heading 84.61, that the valves in question even though parts of the Soot Blower classifiable under Heading 84.01/ 02, are not entitled to the latter classification, in view of the general Notes (V) Parts (Section Note 2) vide item (4) of the second para (p. 1156) of the Explanatory Notes to Section XVI. At the same time there is insufficient justification for denying classification of these as isolating valves. In the circumstances, the Tribunal finds merit in the appeal and allows it. The order of the Appellate Collector is, therefore, set aside.