2018 (1) TMI 825 - AT - Central Excise

Classification of goods - Automatic Taps - Urinals and WC Flushing Systems - classified under CETH 854390 or under CETH 90328910? - Held that - It is evident from the head note under 8481 that this heading covers various types of Taps, Locks, valves etc - The Automatic Tap manufactured by the appellant, no doubt incorporates an electronic control device, but functions as a Tap to regulate the flow of liquid. Consequently, the essential character of the products remains the tap and hence it is rightly classifiable under CETH 8481. Automatic Flushing System for Urinal and WC - Held that - the appellants manufacture only the electronic device that is fitted to the water supply line so as to flush the device automatically. However, WC/ Urinal is not part of the goods manufactured by the appellant. The goods manufactured are in the nature of instruments/ apparatus for automatically controlling of the flow of the fluid. Hence, these are most appropriately classifiable under CETH 9032, as ordered in the impugned order. Appeal dismissed - decided against appellant.

Summary

Issues: Classification of Automatic Taps, Urinals, and WC Flushing Systems under CETH 8481 or CETH 9032

Classification of Automatic Taps:
The appellant, engaged in manufacturing Automatic Taps, Urinals, and WC Flushing Systems, classified the products under CETH 854390. The Department disagreed, asserting the correct classification under CETH 90328910, liable to duty at 12% instead of the concessional rate of 10%. The Commissioner (Appeals) classified Automatic Taps under CETH 8481, prompting the appellant to appeal for classification under CETH 8481 for all products. The appellant argued for uniform classification under CETH 8481, citing US Customs rulings. The Department justified the Commissioner's classification based on product leaflets.

Analysis:
The Tribunal examined the products, noting that Automatic Taps regulate water flow upon hand proximity, while the Flushing Systems operate automatically after use. The Tribunal found Automatic Taps to function primarily as taps, aligning with CETH 8481's coverage of taps, valves, etc. Hence, the Tribunal upheld the Automatic Taps' classification under CETH 8481.

Classification of Automatic Flushing Systems:
For the Automatic Flushing Systems, the appellant only manufactures the electronic device for automatic flushing, not the WC or Urinal itself. The Tribunal determined these products as apparatus for fluid flow control, fitting CETH 9032's description of automatic regulating instruments. Thus, the Tribunal upheld the Commissioner's classification under CETH 9032 for the Flushing Systems.

Conclusion:
The Tribunal upheld the impugned order, dismissing the appeal. Automatic Taps were classified under CETH 8481 as taps, while the Flushing Systems were classified under CETH 9032 as automatic regulating instruments. The Tribunal's decision was based on the essential character and function of each product, aligning with the respective classification headings.