2006 (6) TMI 397 - AT - Customs

Summary

Issues:
Classification of imported goods under Custom Tariff - Heading 86.07 vs. Heading 90.32

Analysis:

1. The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) regarding the classification of goods imported by the respondents under Custom Tariff. The Revenue contended that the goods should be classified under Heading 90.32 of the Custom Tariff.

2. The Respondent imported a Locomotive Control System for 3300 HP with Locomotive Build and claimed classification under Chapter Heading 86.07 of the Customs Tariff as parts of Railway or Tramway Locomotives. The Revenue, however, reclassified the goods under Heading 90.32 as Automatic regulating or controlling instruments and apparatus. The Commissioner (Appeals) ruled in favor of the importer, leading to the Revenue filing this appeal.

3. The Revenue argued that the goods in question, a control system for Diesel/Electric locomotive, continuously monitor and regulate locomotive performance, making automatic adjustments. Therefore, they should be classified under Heading 90.32 as automatic regulating or controlling instruments and apparatus.

4. On the other hand, the respondents contended that the goods are not components or apparatus but consist of Sensors, Relays, Panels, Modules, Circuit Breakers, and Switches, among others. These items are meant to be fitted in the locomotive to regulate its operation by receiving signals from various parts and converting them into electrical quantities. The output from the microprocessor is then sent to different parts of the locomotive for necessary adjustments. Hence, they argued that the goods should not be classified as automatic regulating or controlling instruments and apparatus.

5. The respondents also relied on the HSN Explanatory Notes to support their classification argument.

6. The Tribunal examined the product literature provided by the respondents and referred to the HSN Explanatory Notes of both Heading 90.32 and 86.07.

7. After reviewing the relevant information, the Tribunal found that the goods in question, tailored for use in locomotives and comprising various components like Sensors, Panels, Modules, Circuit Breakers, Relays, and Switches, do not qualify as instruments or apparatus for automatic regulating and controlling. Therefore, the Tribunal upheld the classification of the goods as parts of a locomotive under Heading 86.07, dismissing the appeal filed by the Revenue.