1997 (1) TMI 174 - AT - Customs

Summary

Issues: Classification of imported valves under Customs Tariff Heading (CTH) 8481.80 or CTH 98.06, and eligibility for benefit under Notification 69/87-Cus.

The judgment pertains to an appeal against the Collector of Customs (Appeals) order regarding the classification and duty assessment of imported Oil Stop Valves under CTH 8481.80. The appellants sought re-assessment under Heading 98.06 with the benefit of Notification 69/87-Cus., which was rejected by the authorities, leading to the appeal. The appellants argued that the valves, designed specifically for compressors and only cutting the flow of oil when the compressor stops, should not be classified under CTH 8481.80 but under Chapter Heading 98.06. They contended that the valves do not regulate the flow of fluids, gases, or liquids as required by CTH 8481.80, and should be classified under Chapter Heading 98.06 instead.

The Revenue, on the other hand, argued that the valves, even if designed for a particular machine, should be classified as valves under CTH 8481.80. They emphasized that technical opinions did not support the exclusion of the valves from CTH 8481.80 to be classified under 84.14. The HSN Notes under Chapter Heading 84.81 were cited, indicating that valves specialized for specific machines remain classified under CTH 84.81, irrespective of their design. Certain valves like Safety valves, Control cocks, and Pressure reducing valves are explicitly mentioned to fall under Heading 84.81. The HSN Notes also specify that Suction or pressure valves for compressors should be classified under 84.14.

The Tribunal analyzed the contentions and HSN Notes in detail. It noted that the appellants themselves admitted that the valves only cut the flow of oil and do not regulate it. The technical opinion provided did not establish the valves as suction or discharge valves exempt from CTH 84.81. Considering the HSN Notes, the Tribunal held that the valves, not meeting the criteria specified for exclusion under Heading 84.81, were correctly classified under CTH 8481.80. As CTH 8481.80 was excluded from CTH 98.06 by Notification 132/87, the claim for assessment under CTH 98.06 was rejected. Consequently, the Tribunal upheld the impugned order and dismissed the appeal, affirming the classification of the valves under CTH 8481.80 and denying the benefit under Notification 69/87-Cus.