1994 (4) TMI 131 - AT - Customs

Summary

Issues: Classification of imported goods under the Customs Tariff Act

1. Classification Dispute:
The case involved a dispute regarding the classification of imported goods described as "A.C. Transistor Invertor Units" under Chapter Heading 8504.40 CTA. The original authority classified the goods under Heading 85.43 CTA as Electrical Machinery and Apparatus, while the lower appellate authority classified them under Heading 8504.40 with the benefit of Notification 59/87, considering them as Variable Frequency Invertors not independently usable.

2. Goods Description and Functionality:
The goods imported were used to control the speed of A.C. Motors by converting input A.C. supply to D.C. and then inverting it back to A.C. with variable frequency output. The main advantage was power saving, and motor speed control was achieved by varying the frequency. The Tribunal noted similarities with a previous case involving Dantoss VLT Static Frequency Convertors, emphasizing the function of changing fixed D.C. value to variable speed values, which was deemed beyond a typical inverter's function.

3. Tribunal's Decision:
After considering arguments and the previous case, the Tribunal concluded that the imported goods were not merely rectifiers or static converters but had a specific function of controlling motor speeds effectively. The Tribunal held that the goods fell under Tariff Heading 85.43, corresponding to Tariff Heading 85.18/27(1), rather than Heading 85.01(1). Consequently, the appeal of the Revenue was allowed, and the classification under Tariff Heading 85.43 was upheld, setting aside the lower appellate authority's decision.

In summary, the judgment resolved the classification dispute by determining that the imported goods were appropriately classified under Tariff Heading 85.43 as Electrical Machinery and Apparatus with individual functions, based on their specific functionality in controlling motor speeds. The decision was supported by the goods' description, previous case analysis, and the distinction between typical inverters and the unique function of the goods in question.