1993 (12) TMI 137 - AT - Customs

Summary

Issues: Classification of imported goods under Tariff Heading 85.01(1) or 85.18/27(1) CTA, 1975

Detailed Analysis:

1. Classification Dispute:
The case revolved around the classification of imported variable speed drive VLT 7.5 under Tariff Heading 85.01(1) or 85.18/27(1) CTA, 1975. The original assessment was under Heading 84.63(1) as a machine for controlling or varying the speed of rotation of a machine. The Collector of Customs (Appeals) ruled in favor of the respondents, classifying the goods under Tariff Heading 85.01(1) as static frequency converters, not gears. The Revenue appealed this decision, arguing that the goods are not mechanical parts but frequency converters, not for A.C. to D.C. conversion, thus should be under Heading 85.18/27(1) CTA, 1975.

2. Revenue's Argument:
The Revenue contended that the goods do not convert A.C. into D.C. but control motor speeds effectively, aiding various machines' functioning. They argued that the goods fall under Heading 85.18/27(1) CTA, 1975, as they are complete appliances with individual functions. The Revenue emphasized that the goods regulate motor speed beyond frequency changes, as evidenced by the service manual extracts provided.

3. Respondents' Defense:
The respondents, represented by their advocate, reiterated that the goods are static frequency converters, converting A.C. to D.C. and vice versa. They relied on definitions of 'Converter' and 'Inverter' to support their stance. The advocate argued that the goods' function aligns with being static converters, as determined by the lower appellate authority, warranting dismissal of the appeal.

4. Tribunal's Decision:
After considering both parties' arguments, the Tribunal sided with the Revenue. They agreed that the goods, by controlling motor speeds and aiding machine functionality, qualify as complete appliances with specific functions. The Tribunal found Heading 85.18/27(1) CTA, 1975 more suitable than 85.01(1) for classification. Consequently, the Revenue's appeal was allowed, leading to consequential effects.

In conclusion, the Tribunal's judgment favored the Revenue's position, classifying the imported goods as complete appliances under Tariff Heading 85.18/27(1) CTA, 1975 due to their specific function of controlling motor speeds effectively.