2002 (3) TMI 800 - AT - Central Excise

Summary

Issues: Classification of goods - servo controlled voltage stabilizer under Heading 90.32 or Heading 85.04.

Analysis:
1. The primary issue in this appeal was the correct classification of goods manufactured by the appellant, specifically servo controlled voltage stabilizers. The appellant claimed classification under Heading 90.32 of the tariff, while the notice issued proposed classification under Heading 85.04. The Assistant Commissioner classified the goods under Heading 85.04, considering them essentially as electrical transformers. On appeal, the Commissioner (Appeals) upheld this classification, leading to the current appeal.

2. Heading 85.04 pertains to "electrical transformers, static converters, and inductors," while Heading 90.32 covers "automatic regulating or controlling instruments and apparatus." The Assistant Commissioner's reasoning for classifying the goods under Heading 85.04 was based on the perception that the stabilizers functioned similarly to transformers. However, the Tribunal noted that the Commissioner's reliance on Chapter 90 covering specific instruments and apparatus was a misconception. It emphasized that chapter headings are for reference only and not for legal classification purposes.

3. Both headings under consideration were direct reproductions from the Harmonized System of Nomenclature. Therefore, the Tribunal deemed it appropriate to refer to the Explanatory Notes to interpret the scope of these headings. The Explanatory Notes for Heading 90.32 explicitly included automatic regulators of electrical quantities, which supported the appellant's classification argument.

4. The Tribunal highlighted the importance of evidence in determining the correct classification. While the appellant's representative was absent during the proceedings, an affidavit previously submitted was deemed unreliable due to the affiant's vested interest. The Tribunal suggested consulting independent experts for a more objective classification assessment. Despite this, the affidavit and relevant explanatory notes presented a prima facie case for classifying the goods under the heading claimed by the appellant.

5. Consequently, the Tribunal allowed the appeal, overturning the previous order, and remanded the matter to the Assistant Commissioner for a fresh classification determination. The Assistant Commissioner was instructed to consider any new evidence presented by the appellant within two months. The Tribunal clarified that both parties were free to produce evidence regarding classification and that the Assistant Commissioner was not bound by the Tribunal's initial observations.

6. The departmental representative referenced a prior Tribunal decision in PMP Auto Industries Ltd. v. CCE, which was deemed irrelevant to the current issue as it concerned the classification of voltage regulators under different headings.