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2018 (11) TMI 241 - AT - Customs


Issues Involved:

1. Classification of "Helium Leak Testing Machine Twin Chamber with Recovery System".
2. Applicability of exemption under Notification No 24/2005-Cus (S No 31).
3. Consideration of technical features and Chartered Engineer's Certificate.
4. Procedural fairness regarding notice on technical aspects.
5. Relevance of cited case laws.

Detailed Analysis:

1. Classification of "Helium Leak Testing Machine Twin Chamber with Recovery System":

The primary issue was whether the imported "Helium Leak Testing Machine Twin Chamber with Recovery System" should be classified under Custom Tariff Heading (CTH) 9026 as claimed by the appellant or CTH 9031 as determined by the customs authorities. The lower authorities classified the machine under CTH 9031, arguing that it is not a simple measuring instrument but a complex machine used for detecting leaks through a spectrometer. The Tribunal upheld this classification, stating that the machine is not merely an instrument or apparatus but a combination of various devices forming a system, thus falling under the category of machines as per Note 3 and 4 to Section XVI of Chapter 90.

2. Applicability of Exemption under Notification No 24/2005-Cus (S No 31):

The appellant sought exemption under Notification No 24/2005-Cus (S No 31), which was linked to the classification under CTH 9026. Since the Tribunal upheld the classification under CTH 9031, the exemption was deemed not applicable. The Tribunal noted that the machine's primary function is to detect leaks rather than measure or check the flow, level, or pressure of gases, which are the criteria for classification under CTH 9026.

3. Consideration of Technical Features and Chartered Engineer's Certificate:

The appellant argued that the technical features and the Chartered Engineer's Certificate supported classification under CTH 9026. The Tribunal, however, found that the machine, as described in the technical literature and the Chartered Engineer's Certificate, is a complex system used for detecting leaks, not for measuring variables of liquids or gases. The Tribunal emphasized that the machine's principal function is to detect leaks, thus fitting the description under CTH 9031.

4. Procedural Fairness Regarding Notice on Technical Aspects:

The appellant contended that they were not adequately notified about the technical aspects leading to the reclassification. The Tribunal did not find merit in this argument, as the classification was based on the detailed examination of the machine's technical literature and the Chartered Engineer's Certificate, which were available to the appellant.

5. Relevance of Cited Case Laws:

The appellant cited several case laws to support their classification under CTH 9026. The Tribunal distinguished these cases, noting that the circumstances and the nature of the items in those cases were different. For instance, in the case of Commissioner of Customs Bangalore vs SPM India Ltd, the item was a high precision measuring instrument, unlike the current case where the machine's primary function is leak detection. Other cited cases were also found to be distinguishable based on the specific functions and classifications involved.

Conclusion:

The Tribunal upheld the order of the Commissioner (Appeal), confirming the classification of the "Helium Leak Testing Machine Twin Chamber with Recovery System" under CTH 9031 and denying the exemption under Notification No 24/2005-Cus (S No 31). The appeal filed by the appellants was dismissed, and the differential duty demand was sustained. The judgment emphasized the importance of the machine's principal function in determining its classification and found that the cited case laws did not alter the classification decision.

 

 

 

 

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