1990 (3) TMI 211 - AT - Central Excise

Summary

Issues: Classification of insulation items under Customs Tariff Act, 1975

Issue 1: Classification of Insulation Items
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of various insulation items imported by the respondents. The items in question included insulation between water-cooled shield and pressure rings, packing for stuffing box, and insulator for electrode seal. The respondents claimed re-assessment under Heading 85.18/27(6) of the Customs Tariff Act, 1975, along with the benefit of a concessional rate of duty under Notification 172/77. The Assistant Collector initially classified items 1 and 3 under different headings, while item 2 was classified as articles made of paper. The lower appellate authority reclassified items 1 and 3 under Heading 85.18/27(1) as electrical apparatus, but the Department appealed this decision, leading to the current judgment.

Analysis:
The Tribunal considered the descriptions provided in the Bill of Entry, the annexure to the Bill of Entry, and the invoices, which all referred to the items as insulators for the purpose of insulation. The drawings submitted also supported the classification as insulators. The Tribunal noted that the insulation items were cut to size and shape as insulators, qualifying them for classification under Heading 85.18/27(1). The drawings specified the size, materials, and components, leaving no doubt that items 1 and 3 were indeed insulators. Thus, the classification by the Collector (Appeals) was upheld for these items, and the departmental appeal was dismissed.

Issue 2: Cross-objections for Item 2
Regarding item 2, the Tribunal examined the drawing related to this item, which specified the size and material as asbestos woven. The Tribunal found that this item also acted as an insulator, warranting classification under Heading 85.18/27(1). Reference was made to precedents where similar items were classified under the same heading based on their function as insulating fittings for electrical equipment. The Tribunal cited cases where synthetic resin bonded paper cylinders and transformer board strips were classified under the same heading due to their insulation properties.

Analysis:
Based on the discussion and precedents cited, the Tribunal concluded that all three items, including item 2, were properly classifiable under Heading 85.18/27(1) of the Customs Tariff Act, 1975. Consequently, the appeal filed by the Department was dismissed, and the cross-objection by the importer was allowed, resulting in consequential relief.

In conclusion, the judgment by the Appellate Tribunal CEGAT, New Delhi clarified the classification of insulation items under the Customs Tariff Act, 1975, emphasizing the importance of examining the purpose, description, and function of the items to determine their appropriate classification under the relevant headings.