1986 (1) TMI 230 - AT - Central Excise

Summary

Issues:
Appropriate classification of imported formed insulation components for power Transformers under the Customs Tariff Act, 1975.

Analysis:
The case involved determining the correct classification of imported formed insulation components for power Transformers under the Customs Tariff Act, 1975. The goods in question were strips of Transformer board specifically designed for use in transformers with rounded edges to prevent damage to the wire insulation. The Department assessed the goods under heading 85.18/27(1) of the C.T.A., arguing that it covers "insulating fittings for electrical equipment." On the other hand, the appellants contended that heading 85.01(1) covering Transformers should apply since the goods were specially designed components for power transformers. They relied on a previous order-in-revision by the Central Government in their favor. The Department disputed this, stating that the Explanatory Note below heading 85.26 of the C.C.E.N. was not applicable to the case as it had not been incorporated into the C.T.A.

The Tribunal considered evidence presented by both parties, including portions of the foreign supplier's catalogue and drawings submitted by the appellants. The Department highlighted that insulation was the main function of the imported goods based on the foreign Manufacturer's statement in the catalogue. The Tribunal acknowledged that Explanatory Notes to the C.C.E.N. and orders-in-revision by the Central Government held persuasive value but were not binding. However, in this case, the Tribunal found compelling reasons to depart from the Central Government's earlier conclusions based on the foreign manufacturer's catalogue, which was not considered in the previous order.

The Tribunal analyzed extracts from the catalogue, emphasizing that the main function of the Transformer board strips was insulation to prevent contact between high and low-voltage coils inside the transformer, thereby avoiding transformer blow-out. It was established that the strips acted as spacers as part of the insulation process, with insulation being the primary function and not incidental. Consequently, the Tribunal determined that the goods were appropriately classifiable under heading 85.18/27(1) as assessed by the lower authorities, rejecting the appellant's classification under heading 85.01(1).

Therefore, the Tribunal upheld the classification decided by the lower authorities, dismissing the appeal based on the detailed analysis of the goods' design, purpose, and the applicable tariff headings under the Customs Tariff Act, 1975.