1988 (3) TMI 237 - AT - Customs

Issues Involved:
1. Classification of insulators used as transformer bushings.
2. Applicability of sub-heading (1) or sub-heading (7) of Heading 85.18/27.
3. Interpretation of "transmission" and "distribution" systems in electrical contexts.
4. Relevance of previous judgments to the current case.

Detailed Analysis:

1. Classification of Insulators Used as Transformer Bushings:
The primary issue in these appeals is the classification of insulators used as transformer bushings. The department argued that these goods should be assessed under sub-heading (1) of Heading 85.18/27, while the importers contended that they should be assessed under sub-head (7) of the same heading. The insulators in question are lead-in insulators fitted to transformers to lead high tension conductors into them. The Appellate Collectors had previously concluded that these insulators lose their identity as insulators and become parts of transformers when assembled.

2. Applicability of Sub-heading (1) or Sub-heading (7) of Heading 85.18/27:
The importers' counsel argued that even though the insulator bushings are fitted to transformers, they are external fittings designed only to lead high power transmission lines into the transformer. The transformer does not need these insulator bushings to transform electrical energy. Therefore, the insulator bushings should be categorized as insulators used in assessment systems of 460 volts and above. They cited previous cases, such as the Emco Transformers and Automatic Electric Ltd., to support their claim that their insulator bushings should be assessed under sub-head (7).

3. Interpretation of "Transmission" and "Distribution" Systems in Electrical Contexts:
The counsels for the importers emphasized that transformers play a role in the transmission of high voltage electricity and should not be considered part of the distribution system. They argued that the insulator bushings should be classified as transmission insulators. The learned SDR countered that the goods must be assessed as they are when imported, and at the time of importation, they were insulator bushings for use in transformers. The SDR pointed out that the distinction between transmission and distribution is not relevant for the purpose of classification.

4. Relevance of Previous Judgments to the Current Case:
The counsels for the importers referred to previous judgments, such as the Emco Transformers and Automatic Electric Ltd., to support their claim. However, the Tribunal found that these judgments did not directly apply to the present case. The Emco Transformers judgment was decided under sub-head (1), and the Voltas Ltd. judgment also did not support the importers' claim. The Automatic Electric Ltd. judgment was not clear about the type of goods involved and did not apply to the present case.

Conclusion:
The Tribunal concluded that the insulator bushings imported by the appellants are fittings for transformers and should be assessed under sub-heading (1) of Heading 85.18/27. The Tribunal emphasized that the insulator bushings are not part of the transmission system but are fittings for transformers to protect them from high voltage electricity. Therefore, assessment under sub-heading (7) of Heading 85.18/27 is not appropriate. The Tribunal ruled in favor of the department's classification under sub-heading (1).

← Previous Next →