9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (11) TMI 442 - SC - CustomsClassification of proximity sensor / switching device - whether these products are classifiable under Heading 85.36 or 90.31 of the Indian Customs Tariff - Held that - Revenue accepts that the product in question does the function of switching as well. In fact, these are designed to sense and then switch on or switch off the particular machine to which the product is installed. Therefore, we are satisfied that primarily switching device and sensor is only a means to achieve the same. That was explained by the assessee through its Managing Director Mr. Thampy Mathew and Mr. S. Manjunath, the Assistant General Manager. Herein, it was categorically stated (which is not disputed as well) that without switching on and switching off, the product is of no use at all. - Revenue has issued Notification No. 21/2002-Cus., dated 01.03.2002. It is a general Exemption Notification prescribing effective rates of duty for goods of various chapters / headings. Entry 244 thereof relates to the goods specified in List 26 and a uniform duty of 15 per cent is prescribed therein. - Decided against Revenue.
Issues:
Classification of products under Heading 85.36 or 90.31 of the Indian Customs Tariff. Analysis: The case involved a dispute over the classification of proximity sensors, float switches, and digital input switches under Heading 85.36 or 90.31 of the Indian Customs Tariff. Heading 85.36 pertains to "Electrical apparatus for switching or protecting electrical circuits," while Heading 90.31 covers "Measuring or checking instruments, appliances and machines." The assessee claimed classification under Heading 85.36, while the Revenue argued for classification under Heading 90.31. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) considered the function of the proximity sensor, which is to detect the presence of a metal object and change the output status to control the machine it is connected to. The sensor activates or deactivates the machine or initiates a sequence of operations, primarily switching the machine on or off. CESTAT referred to the HSN Explanatory Note on "apparatus for switching electrical circuits," which includes switches used in various applications, such as proximity switches. The Revenue acknowledged that the product functions as a switching device, designed to switch the connected machine on or off. The product's Managing Director and Assistant General Manager confirmed that the sensor's primary purpose is switching, without which the product would be useless. The Supreme Court concurred with CESTAT's findings, emphasizing that the sensor's switching function is essential for its operation. Furthermore, the Supreme Court highlighted the insignificance of the classification under Chapter 85 or Chapter 90 due to a general Exemption Notification (No. 21/2002-Cus., dated 01.03.2002) prescribing a uniform duty rate of 15% for goods from Chapter 84, 85, and 90. Therefore, the duty payable remains the same regardless of the classification under either chapter. Consequently, the Supreme Court dismissed the appeal, finding no merit in the petitioner's arguments. In conclusion, the judgment clarified the classification of the products under the Indian Customs Tariff, emphasizing the essential function of the proximity sensors as switching devices under Heading 85.36. The decision also highlighted the uniform duty rate applicable under different chapters, rendering the classification dispute immaterial in terms of duty payment.
|
