1997 (7) TMI 257 - AT - Central Excise

Capacitors - Benefit of Exemption Notification No. 188/87-Cus. not available, as power capacitors are excluded from its ambit

Summary

Issues:
Eligibility of Motor running capacitors for benefit of Notification No. 188/87-Cus.

Detailed Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the eligibility of Motor running capacitors imported by the respondents for the benefit of Notification No. 188/87-Cus. The Revenue contended that the imported goods, being Motor running capacitors, should not be extended the benefit under the notification as they were considered a type of power capacitors based on Indian Standard IS 1985 (Part XL 11) 1977 Electro Technical Vocabulary. The issue was whether Motor running capacitors qualified as power capacitors under the relevant standards.

The Tribunal heard arguments from both sides. The Bureau of Indian Standards classified Motor capacitors under the heading 'Power Capacitors' with the IS Standard being IS 2993: 1975. Although there are different IS specifications for various types of power capacitors, the classification of Motor capacitors under 'Power Capacitors' did not automatically exclude them from being considered power capacitors. The 1985 Publication of the ISI defined Power Capacitors as intended for use in a power network and Motor Running Capacitors as providing leading current to an auxiliary winding of a motor, which are characteristics of power capacitors.

Despite the differences in application and specifications between Motor running capacitors and traditional power capacitors, such as capacity rating and working voltage rating, it was established that Motor running capacitors are essentially a type of power capacitors. The Collector of Customs' reliance on size and dimension differences to distinguish between the two types of capacitors was deemed insufficient. The contention that Power capacitors are only for power factor connection was refuted based on the Electro-technical vocabulary. The Tribunal concluded that Motor running capacitors fell within the definition of Power capacitors and were not entitled to the benefit of Notification 188/87. Consequently, the impugned order was set aside, and the appeals of the Revenue were allowed.