Customs, Excise and Gold Tribunal - Delhi
Hari Fertilizers vs Collector Of Customs on 13 November, 1987
Equivalent citations: 1989(42)ELT225(TRI-DEL)
ORDER M. Santhanam, Member (J)
1. The appellants imported a consignment containing 3 items of valves and presented a Bill of Entry for clearance of the consignment claiming assessment under Heading 84.61(2) as "Isolating Valve". The appellants explained with the help of drawings and technical write-up the usage of the particular valves to the Assessing Officer. The Assistant Collector assessed the items under Heading 84.61(1) as Pipe Line Valves. The appellants preferred an appeal and the same was rejected.
2. Sh. J.N. Banerjee, Consultant for the appellants wanted to file the clarification issued by the Importers regarding the nature of the goods. Since it was secured after the proceedings, the same was not admitted in evidence. The Ld. Consultant drew our attention to the functions of the valve. For easy reference, we reproduce (iii) of the grounds of appeal :-
"These valves are used in Gas Generator. In the Generator at first coke is heated to a desired temperature which gives rise to some flue gas inside the generator combustion chamber. This flue gas is first removed through 2 chimneys where DN 800 and DN 1000 pipe valves are fitted. Once the chamber is cleared of the flue gases these valves are closed and then steam and air is injected into the chamber resulting in production of semi-water gas which is then removed from the generator chamber through another pipe line where DN 600 valve is fitted. This is a repeated cycle of production and each cycle is taking approximately 3 minutes time -1 minute for removal of flue gases and 2 minutes for removal of semi-water gas. This semi-water gas is then taken to subsequent processing for production of ammonia from which fertilizers are produced.
In the above process of semi-water gas generation, the critical part is to isolate the flue and the semi-water gases in the process of cyclic generation. To effect the isolation of these gases, these valves play the most important role. Once the flue gases are generated, they are taken out of the chamber and the gate valves pipes DN 800 and DN 1000 are closed for isolating the chamber from flue gas. Thereafter, the semi-water gas as generated there, are taken out and before the next operation of production of flue gas starts, the chamber is isolated by means of valves DN 600 from the semi-water gas. Hence the effect rendered by these valves is to isolate these two types of gases and prevent them from getting mixed."
The Consultant submitted that Heading 84.61(2) of the C.T.A. included isolating valves alongwith other types of valves specified under the Heading commonly used in industries. The isolating valves are these valves which are used to isolate a particular section or pipe line or any flueing. It does not matter whether it is a gate valve or a globe valve. The mode of operation can be by means of a hydraulic, pneumatic, solenoid or manual for any kind of valves without affecting the function of the valves. The basic information received from the designer and manufacturers M/s. Zimmerman & Jansen of West Germany and M/s. Larsen & Toubro were relied on. He stated that no opportunity was given to the appellants to put forward their contentions.
3. Shri J. Gopinath, SDR drew our attention to the description of the items in the invoice. We find there are two cases i.e. (i) "Complete Gate Valves" and "Complete Hot Gas Valve" "without super structure and hydraulic actuator". There was one case of complete hot gate valve without super structure and hydraulic actuator. He also relied on the decision of the Tribunal in order No. 537/87-B2 dated 20.4.87 (ACC Babcock Ltd. v. C.C. Madras). In that case Lyons' Encyclopaedia of Valves by Jerry L. Lyons, P.E. and Carl L. Askland, Jr. was cited. The isolating valve has been described as 'A hand operated valve' located between the packing lubricator assembly and the packing box assembly in a control valve. It is used to shut off the fluid pressure from the lubricator assembly. The Tribunal held that the isolating valve is used to shut off the liquid pressure from the lubricator assembly and as the valves imported did not have the function of isolating valve, the assessment under Heading 84.61(1) was upheld.
4. In his reply the Consultant submitted that this is a shut off of valve and used for. He wanted the Tribunal to take into consideration the technical advancements before deciding the classification.
5. The point for consideration in the appeal is whether the imported items should be classified under Heading 84.61(1) as contended by the department or under Heading 84.61(2) as contended by the appellants.
6.' We reproduce here the relevant entries :-
Heading 84.61 (2) "Isolating valves, non-return valves, safety valves, pressure reducing valves, exhaust relief valves, thermostatically controlled valves, solenoid operated valves; valves made of corrosion-resisting material such as stainless steel, nickel monel, incoloy, hastelloy and other valves lined with rumber or other corrosion-resisting materials; steam traps."
Heading 84.61(1) refers to valves and similar appliance not elsewhere specified. Heading 84.61(2) among others refers to isolating valves, non-return valves, safety valves, pressure reducing valves, exhaust relief valves etc. From the invoice we find these valves are complete gate valves or complete hot gas valves and are hydraulically controlled. It is seen from the order-in-original that the appellants claimed that all these valves were equivalent to solenoid operated valves and explained that due to risks of explosion in the plant, solenoid valves are not used and instead hydraulic actuated valves like the present type which are more safe and foolproof are used. Since the valves are hydraulic controlled valves, the Assessing authority was justifying in classifying the same under the same Heading 84.61(1).
7. Further from the earlier judgment we notice that an isolating valve is used to shut off the flueing pressure from the lubricator assembly. But in the present instance, we find that once the chamber is cleared of the flueing gases, these valves are closed and steam and drier is injected into the chamber resulting in the production of semi-water gases. It is hence clear that the valves cannot be considered as isolating valves. They do not perform the function of isolating valves. There are separate types of valves and in order to claim the benefit of classification as an isolation valve, one would expect the unit to perform the functions of an isolating valve and not merely the functions of a gate valve. These valves cannot be considered as isolating valves since they are fitted in the pipe line or chimneys and not on the valves themselves which would be the test to decide whether the valve is an isolating valve or not. Hence on a consideration of the functions of the valves in question, we are of the view that the valve is not an isolating valve as claimed by the appellants. The classification under Heading 84.61(1) is correct. The appeal is rejected.