2007 (3) TMI 258 - SC - Customs

Whether Fully Automated Sequential X-ray Spectrometer is an apparatus based on the use of X-ray under sub-heading 9022.19 as claimed by the Department or whether the said apparatus is classifiable as Spectrometer under sub-heading 9027.30 being an apparatus for physical or chemical analysis? Held that - Going through the literature/brochure concerning Fully Automated Sequential X-ray Spectrometer it is find that the above System which is imported by the assessee is multi-functional with an inbuilt software. It has an inbuilt automatic analysis program. It is the software in the System which makes the system carry out multi-purpose functions. The computer processes the data. The configurations are also specified in the assembly of the Spectrometer. Prima facie it appears that there is an inbuilt computer system in the Spectrometer. That computer appears to be an essential part of direct reading. These aspects have not been considered by the authorities below. The catalogue/brochure produced indicates that the Spectrometer in question would be non-functional without the computer. Modern direct reading Spectrometer incorporates a computer in the System so that they can measure process and analyse the data. The catalogue shows the configurations which indicate prima facie that the computer stands integrated with the Spectrometer. The catalogue indicates the type of apparatus. The catalogue shows inclusion of software programmes and computer. The catalogue shows that the Spectrometer is so designed that it functions in an integrated manner along with the computer and can be operated and controlled only with such computer. None of these aspects had been considered by the authorities below including the Tribunal. Hence we remit the matter to the Tribunal to decide the matter de novo. Appeal allowed in favour of assessee.

Summary

Issues: Classification of Fully Automated Sequential X-ray Spectrometer under Customs Tariff Act, 1975

Analysis:
1. Issue: Determination of classification under sub-heading 9022.19 or 9027.30.
- The civil appeal questioned whether the Fully Automated Sequential X-ray Spectrometer is classified as an apparatus based on X-ray under sub-heading 9022.19 or as a Spectrometer under sub-heading 9027.30 for physical or chemical analysis.
- The Department argued that the Spectrometer was X-ray based and should be classified under 9022.19, citing the HSN classification.
- The assessee contended that the Spectrometer falls under 9027.30 as per the specific description in the Customs Tariff Act, emphasizing Rule 3(a) of the Rules of Interpretation.

2. Analysis:
- The Supreme Court analyzed the literature and brochure of the Spectrometer and noted its multi-functional capabilities, inbuilt software, and automatic analysis program.
- The Court observed that the computer system integrated with the Spectrometer was essential for its functioning, as indicated by the catalogue.
- The Court highlighted that the Spectrometer's design and configuration showed a direct connection with the computer for data processing and analysis, which had not been adequately considered by the lower authorities.
- Consequently, the Court remitted the matter to the Tribunal for a fresh decision after examining the catalogue to determine the classification accurately, mentioning that the computer's role was crucial in the Spectrometer's operation.

3. Conclusion:
- The Supreme Court set aside the Tribunal's order and directed a reevaluation of the classification based on the integrated computer system in the Spectrometer.
- The Court allowed the appeal without costs, emphasizing the need for a thorough examination of the Spectrometer's functionality and design to determine its appropriate classification under the Customs Tariff Act, 1975.