Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Kwality Biscuits Ltd. on 8 April, 1994
Equivalent citations: 1994ECR9(TRI.-DELHI), 1994(71)ELT1035(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Brief facts of the case are as follows:
1.1 The respondents herein filed a bill of entry for clearance of the item described as "A.C. Transistor Invertor Units" under Chapter Heading 8504.40 CTA read with Notification No. 59/87. The said Chapter Heading covers "Static Converters" which are used to convert electrical energy in order to adapt it for further use i.e. it converts power from Alternating Current to Direct Current. The original authority, however, held that the item is having an independent function and therefore, it is correctly classifiable under Heading 85.43 CTA which covers Electrical Machinery and Apparatus having individual functions. The Assistant Collector in coming to the aforesaid conclusion held that the item under import is not a mere Convertor but it is an Adjustable Frequency Motor Controller which is used to control the speed of A.C. Induction Motor.
1.2 The lower appellate authority, however, on appeal from the respondents herein accepted the plea of the respondents. He held that the impugned item is P&W voltage source Invertors, using the flux linkage control system to ensure smooth and quiet motor operation. The certificate given by the Central Power Research Institute, Bangalore also confirms that the goods are Variable Frequency Invertor. It is further held that it cannot be used independently and hence not an electrical machine. Therefore, the lower appellate authority classified the goods under Heading 8504.40 with benefit of Notification 59/87. Hence this appeal before the Tribunal.
2. A write-up on the goods imported by the respondents herein is available at page 51 of the paper supplied by the respondents. It is reproduced below :-
"This unit is used to control the speed of A.C. Motors. The input supply to the unit can be either from 200 V 50 Hz. single phase supply or from 400 V 50 Hz. three phase supply.
The input A.C. supply is converted first into a D.C. supply using a rectifier circuit. This D.C. is then inverted into an A.C. variables frequency output by an electronic circuit. The frequency variation is obtained either through built-in-push button switches (increase-decrease) or by an external 0 to 10 V or a 4-20 mA signal.
The main advantage with the unit is of power saving.
The speed of the motor is directly proportional to the frequency. Thus varying the frequency the motor speed control is achieved."
3. We notice that the item imported is similar to the one dealt with by the Tribunal in its Final Order No. C/176/93-B2, dated 3-12-1993 in the case of Collector of Customs, Madras v. Wadia (I) Ltd. The goods imported therein were Dantoss VLT Static Frequency Convertors and their function was described as follows :-
"Dantoss VLT static frequency converters consist of an uncontrolled three phase mains rectifier which converts the three phase mains voltage to a d.c. voltage with a fixed value.
This constant d.c. voltage is then made variable by a chopper voltage frequency.
The value of the variable d.c. voltage is registered by a current measuring circuit which controls the inverter so that the valuable d.c. voltage value determines the output voltage and frequency of the inverter. [Emphasis supplied by ld. SDR]"
It is thus seen that the goods in Wadia (I) Ltd. are similar to the one imported and under consideration in this case. The Tribunal after considering the arguments of both sides held as follows in para 4 of the aforesaid order dated 3-12-1993 :-
"4. We have carefully considered the pleas advanced on both sides. We are inclined to agree with the learned SDR, Shri B.K. Singh that the goods cannot be treated as only rectifiers of static converters changing A.C. into D.C. It is seen that fixed D.C. value is further changed to variable speed values of the D.C. This is not the function of an invertor, as per the definition relied upon by the respondents. Inverter changes A.C. into D.C. It does not change the D.C. value to variable values of D.C. There is sufficient force in the pleas of the learned SDR that the goods control motor speeds and helps in the effective functioning of the various machines and machine tools with which it works in conjunction. The function of the goods, therefore, is specific irrespective of the goods with which the goods are used; its function remains the same. It is, therefore, a complete appliance by itself having an individual function. In our view, therefore, Tariff Heading 85.18/27(1) CTA, 1975 is more appropriate than the Tariff Heading 85.01(1) CTA, 1975. Hence the appeal of the Revenue is allowed with consequential effects thereof."
Under the present CTA Tariff Heading 85.43 is corresponding to Tariff Heading 85.18/27(1). Accordingly, we hold the classification of the goods under consideration under Tariff Heading 85.43, as prayed for by the appellant-Collector. Hence while setting aside the impugned order, we allow the appeal of the Revenue.