Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Customs vs Sterlite Industries (India) Ltd. on 10 July, 2007
Equivalent citations: 2007(121)ECC202, 2007ECR202(TRI.-CHENNAI), 2007(217)ELT129(TRI-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. The issue arising for consideration in this ease is whether the apparatus imported by the respondents from Japan and described as RIGAKU AUTOMATED SHQUENTIAL X-RAY SPHCTROMHTER in Bill of Entry No. 36680 dated 26.7.96 is classifiable under SH 9022.19 as claimed by the appellant (Department) or whether it is classifiable under SH 9027.30/9027.80 as claimed by the respondents (assessee). It arises for the second time pursuant to the Hon'ble Supreme Court's judgment dated 19.3.2007 rendered, in Civil Appeal No. 15 1/2002 [Sterlite Industries (I) Ltd. v. Commissioner of Customs, Chennai], wherein this Tribunal was directed to decide on the classification issue de novo. Their Lordships remanded the case after noting that the Tribunal, in its earlier order, had not considered the manufacturer's literature/ brochure/ catalogue on Rigaku/Fully Automated Sequential X-Ray Spectrometer and fact that the Spectrometer incorporated computer with software as integral part thereof. The remand was made with a rider to the effect that any opinion expressed by the Court with reference to the catalogue should not be treated as conclusive. It further appears from the apex court's judgment that the assessee raised alternative claim for classification of the apparatus under SH 9027.80 before the apex court. Without expressing any opinion on this aspect, their Lordships have observed that this tribunal can also consider the said claim of the assessee.
2. The relevant Tariff Heading (with Sub-Headings) are reproduced below:
(a) Heading 90.22 Heading No. Sub-heading No. Description of article (1) (2) (3) Apparatus based on the use of X-rays or of alpha, beta or gamma radiations, whether or not for medical, surgical, denial or veterinary uses, including radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, high tension generators, control panels and desks, screens, examination or treatment tables, chairs and the like
- Apparatus based on the use of X-rays, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus:
9022.12
- Computed tomography apparatus 9022.13
- Other, for dental uses 9022.14
- Other, for medical, surgical or veterinary uses 9022.19
- For other uses
- Apparatus based on the use of alpha, beta or gamma radiations, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus:
9022.21
- For medical, surgical, dental or veterinary uses 9022.29
- For other uses 9022.30
- X-ray tubes 9022.90
-
Other, including parts and accessories
(b) Heading 90.27 Heading No. Sub-heading No. Description of article (1) (2) (3) 90.27 Instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters;
microtones 9027.10
- Gas or smoke analysis apparatus 9027.20
-
Chromatographs and electrophoresis instruments 9027.30
-
Spectrometers, spectrophotometers and spectrographs using optical radiations (UV, visible, IR) 9027.40
-
Exposure meters 9027.50
- Other instruments and apparatus using optical radiations (UV, visible, IR) 9027.80
- Other instruments and apparatus 9027.90
-
Microtomes; Parts and accessories
3. The catalogue/literature says that all the essential components required to satisfy the analytical requirements of a laboratory have been included in the RIX 1000 design of Rigaku/Fully Automated Sequential X-ray Spectrometer. It mentions, inter alia, the following features of the apparatus:
(a) Wide range of analytical applications from bulk through thin film;
(b) Fully automated qualitative analysis;
(c) High sensitive analysis from 9F through 92 U[F & U stand for the 2 elements Fluorine & Uranium respectively ] The applications listed in the catalogue indicates that the apparatus can be used for the analysis of steel & non-ferrous metals; cement, ceremics & refractories; chemicals & petroleum coal; electronic & magnetic materials; Foodstuffs & agricultural produce; paper & pulp; environmental & forensic materials. The catalogue also gives an outline of the technique employed in the apparatus thus:
Irradiating a sample with a beam of X-ray may induce secondary X-rays which are characteristic of the elements in the sample. By measuring the wavelength and intensity of those secondary (fluorescent) X-rays, a qualitative and quantitative analysis may be made of the sample. The elements from "F' through 'U" may be analyzed in solids, powers or liquids.
The catalogue further indicates that the apparatus incorporates a computer which automatically processes the spectra [obtained by irradiating the given sample with a beam of X-rays in the Spectrometer] and subsequently identifies the elements present in this sample. For this purpose, standard element conditions are prestored in the computer. The computer calculates the concentration of each element present in the sample on the basis of a 'library' provided. These concentrations are then displayed on the CRT and printed out.
4. After referring to the above features of the equipment, learned Counsel has submitted that the item squarely answers the description "instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractorncters, spectrometers,...)" given under' Heading 90.27. He has also pointed out that spectrometers using optical radiations [UV, visible, IR] are specifically covered under SH 9027.30. However, learned Counsel has conceded that the apparatus imported by the assessee is a spectrometer based on the use of X-rays and not based on the use of UV (ultra-violet), visible or IR (infra-red). In this scenario, learned Counsel has claimed classification of the item under SH 9027.80 [Other instruments and apparatus]. He has argued that, since the spectrometer in question answers the specific description given under Heading 90.27, it can only be classified under an appropriate subheading under this Heading and cannot be classified under Heading 90.22 which provides only a general description. According to him, the lower appellate authority has rightly classified the goods under Heading 90.27 in preference to 90.22 by applying Rule 3(a) of the General Rules for the Interpretation of the CTA Schedule. Learned Counsel has also claimed support from Note 4 to Section XVI and Note 3 to chapter 90 of the CTA Schedule to the assessee's claim for classification of the goods under Heading 90.27.
5. Learned SDR, on the other hand, has relied on HSN Explanatory Notes. She has referred to the following Note under Part-I [APPARATUS BASED ON THE USE OF X-RAYS] of the Explanatory Notes under [leading 90.22.
The Heading also covers:
Special apparatus (X-ray diffraction and X-ray spectrometry equipment) used for the examination of the crystalline structure as well as the chemical composition of materials; the X-rays are diffracted by crystals and then made lo fall on a photographic film or an electronic counter.
She has argued that CTA Heading 90.22 read with the above HSN Note specifically rovers the spectrometer imported by the respondents for analytical purposes. She has also pointed out that X-ray apparatus has been specifically excluded from Heading 90.27 as per HSN Notes under the said Heading. She has underscored the need for applying HSN Explanatory Notes to a case of this nature, by relaying on the Supreme Court's judgments in the cases of CCE, Shillong v. Wood Craft Products Ltd. and C.C. (General), New Delhi v. Gujarat Perstorp Electronics Ltd. .
6. In this rejoinder, learned Counsel hits fairly conceded that, as per HSN Notes, the subject goods can be classified under Heading 90.22 only. However, he argues, HSN Notes arc not to be referred to, where the goods can be classified with reference to trade parlance as well as to Tariff entries read with Section Notes/Chapter Notes.
7.1 We have given careful consideration to the submissions. Admittedly, the spectrometer imported by the respondents is an apparatus based on the use of X-rays. Under Heading 90.22 of the CTA Schedule, apparatus based on the use of X-rays have been sub-divided, based on application. Those meant for computed tomography fall under SH 9022.12; those for dental uses fall under SH 9022.13; those for medical/surgical/ veterinary uses fall under SH 9022. 14 and those for other uses have been put under SH 9022.19. The Revenue (appellant) would like to have the subject goods classified under this last sub-heading inasmuch as the item is used for analytical purposes. From the manufacturer's catalogue/literature, we have clearly understood that the X-ray spectrometer imported by the assessee was meant for analysis in a laboratory. The assessee, engaged in the manufacture of copper electrodes, uses the apparatus for detection and estimation of metals in connection with manufacture of their final product. On these facts it would prima facie appear (hat the apparatus in question is classifiable under Heading 00.22 and SH 9022.19. Regarding Heading 90.27, we note that instruments and apparatus for physical or chemical analysis, like spectrometers, have been included in this Heading. However, sub-heading 9027.30, which specifically covers spectrometers, indicates that the apparatus falling under this sub-heading should be based on the use of UV, visible or IR only. It follows that spectrometers based on the use of other radiations like X-rays would not be covered under this sub heading. Learned Counsel for the respondents has conceded this position also.
7.2 However, he has alternatively claimed classification of the subject goods under SH 9027.80, which is a residual entry reading: "other instruments and apparatus". 'The assessee's claim for classification under SH 9027.30 having been abandoned, the dispute now before us is whether the spectrometer imported by them should be classified under SH 9022.19 or under SH 9027,80. Between these entries, one (SH 9022.19) covers apparatus based on the use of X-rays, meant for uses other than topographic, denial, medical, surgical and veterinary and the other entry (SH 9027.80) is residuary to a wide range of instruments and apparatus including spectrometers. Neither of these entries can be said to be specific in description. Any Section Note or Chapter Note in the (TA Schedule does not seem to be decisive as to which of these entries (9022.19 and 9027.80) will cover the spectrometer imported by the assessee. In the circumstances, we think, the dispute requires to be resolved with reference to relevant HSN Explanatory Notes, there being no dispute regarding alignment between classification of goods under the CTA Schedule and that under the Explanatory Notes to the Harmonized Commodity Description and Coding System (HSN, for short). In this connection, we note that, in the case of Wood Crafts Products (supra), it was held by the Supreme Court that any dispute relating to Tariff classification must as far as possible be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff itself. In the case of Gujarat Perstorp Electronics (supra.), the apex court referred to HSN Notes also for resolving a classification dispute, after noting that the view taken by the Court in Wood Crafts Products (supra) on the applicability of HSN Explanatory Notes had been reiterated in subsequent cases reported in 1997 (91) ELT 13 (SC) and 2002 (142) ELT 181 (SC). The apex courts ruling in the cited cases is to the effect that, where the classification of goods under the Tariff is aligned with the internationally accepted nomenclature found in the HSN, any dispute relating to classification must as far as possible be resolved with reference to such nomenclature unless there is an express different intention indicated by the Tariff itself. In the instant case, the classification under the Customs Tariff Act being aligned with that under the HSN, the dispute requires to be resolved with reference to HSN Explanatory Notes.
7.3 As rightly pointed out by learned SDR, Heading 90.22 also covers special apparatus like X-ray spectrometry equipment used for the examination of crystalline structure and chemical composition of materials, as per an Explanatory Note (reproduced in an earlier part of this order) in Par) - I [APPARATUS BASED ON THE USE OF X-RAYS] of the Explanatory Notes to Heading 00.22. Admittedly, the apparatus imported by She assessee is a. spectrometer based on the use of X-rays i.e. X-ray spectrometry equipment. This fact is evident from the manufacturer's catalogue/literature also. It is also clear from the catalogue that the X-ray spectrometer is used in the examination of crystalline structure and chemical composition of materials. One of the Moles to HSN Heading 90.27 is that this Heading excludes X-ray apparatus. This Note also indicates in parentheses that X-ray apparatus is covered by Heading 90.22. The entries under Tariff Heading 90.27 have to be understood in She light of these, HSN Notes. Accordingly, it has to he held that any instrument/apparatus for physical or chemical analysis, based on the use of X-rays cannot be classified under Heading 90.27. Such equipment/apparatus is appropriately classifiable under Heading 90.22 and, where it is used for a purpose other than tomographic, dental, medical, surgical and veterinary, it should be classified under the residual sub-heading 9022.19 as claimed by the appellant.
8. Learned Counsel has submitted that incorporation of computer in the X-ray spectrometer was noted by the apex court and the same also requires to be considered. We have considered this aspect also. We have found that neither Heading 00:22 nor Heading 90.27 in the Tariff insists that the equipment/apparatus covered thereunder should incorporate computer, nor is it the case of the respondents that automatic data processing in the X-ray spectrometer, when in use, determines the classification of the apparatus.
9. In the result, we hold that the X-ray spectrometer imported by the respondents and cleared under Bill of Entry No. 36680 dated 26.7.96 is appropriately classifiable under Heading 90.22 and SH 9022.19 as claimed by the appellant and not under Heading 90.27 as claimed by the respondents. Accordingly, the impugned order is set aside and this appeal is allowed.
(Pronounced in open court on 10.07.2007)