2014 (2) TMI 1018 - AT - Customs

Classification of goods - Import of parts of tower - Whether the towers meant for WOEG, imported by the appellant which are used in the erection of WOEG, should be classified under CTH 7308 as towers or the same should be classified under 8503 as components of WOEG - Held that - As per the functions of the towers explained by learned sr. advocate, the goods imported are required for the purpose of placing the windmill at a height and some extent also used to control the windmill face in relation to direction of the wind. It is therefore, apparent that these towers meant for WOEG are designed solely and specifically for the purpose of WOEG and are not meant for any other purpose. As per Section Note 2 to Section XV, only parts of general use can be classified under Chapter 73 but the parts solely and specifically designed for use in a particular type of machinery will have to be classified in that chapter where the main machine is classified. This view is also clarified by the CBEC Circular dated 9.8.1997 wherein it has been held that such towers are essential components of WOEG. Further, it has been correctly argued by learned sr. advocate of the appellant that if for Central Excise purposes, the same goods are considered as components of WOEG then there is no reason as to why for Customs classification purposes the same towers could not be treated as essential components of WOEG - towers imported by the appellant are correctly classifiable under Heading 8503 of the Customs Tariff Act and subsequent benefits were correctly availed by the appellant - Decided in favour of assessee.

Summary

Issues: Classification of "tower sections" for Wind Operated Electricity Generator (WOEG) under Customs Tariff Heading 7308 or 8503.

Analysis:

1. Classification Issue: The appeal pertains to the classification of "tower sections" imported for WOEG under Customs Tariff Heading 7308 or 8503. The appellant argued that the towers imported are specifically designed for WOEG, housing cables for electricity transmission and facilitating windmill direction adjustment. Reference was made to Section Note 1(f) of Section XV of the Customs Act, asserting that parts exclusively for Section XVI articles are not classified under Chapter 73. The appellant also cited CBEC Circular No. 924/2//97-Cus (TRU) and a judgment supporting the view that WOEG towers are essential components.

2. Contentions: The appellant's representatives contended that Central Excise exemption Notification No. 6/2006-C.E. considers towers as essential components of WOEG, thus advocating for similar treatment in Customs classification. On the other hand, the Revenue representative argued that towers fall under CTH 7308, as specifically mentioned, and should be classified accordingly. The original authority's decision to classify the towers under CTH 73082019 was supported by the Revenue.

3. Judicial Analysis: The Tribunal analyzed the functions and design of the towers, emphasizing their exclusive use for WOEG, including windmill elevation and wind direction control. Referring to Section Note 2 to Section XV, it was noted that parts specifically designed for a particular machinery type should be classified where the main machine is categorized. The Tribunal highlighted the CBEC Circular's affirmation that WOEG towers are essential components. Drawing parallel with Central Excise treatment, the Tribunal concluded that the towers are appropriately classifiable under Heading 8503, granting the appellant the associated benefits.

4. Decision: Following thorough deliberation and considering the arguments presented, the Tribunal ruled in favor of the appellant, allowing the appeal and affirming the correct classification of the towers under Heading 8503 of the Customs Tariff Act. The judgment emphasized the specialized nature of the towers for WOEG and their classification as essential components, aligning with Central Excise considerations.