1997 (6) TMI 166 - AT - Customs

Summary

Issues:
1. Classification of Mu-metal Housings imported by the appellants under Heading 85.04.90 as parts of a transformer.

Analysis:
The appeal was directed against the order of the Collector of Customs (Appeals) regarding the classification of Mu-metal Housings imported by the appellants. The appellants claimed assessment under Heading 85.04.90 as parts of a transformer, but the Asstt. Collector rejected this claim due to lack of evidence. The Collector (Appeals) upheld this decision, leading to the current appeal.

The appellants argued that Mu-Metal Housing is a vital component of a low-level audio transformer, used to encase the basic transformer to prevent A.C. Hum field interference. They highlighted the properties of Mu-Metal, a metallic alloy with high permeability and low hysteresis loss, making it excellent for magnetic shielding. On the other hand, the revenue contended that the housing is merely a casing and not an integral part of the transformer, citing literature that refers to the transformer being encased in Mu-Metal Housing.

During the hearing, excerpts from a book "Public Address System" were presented, emphasizing the importance of Mu-metal in shielding transformers from unwanted signals. The literature described Mu-metal as a metallic alloy suitable for magnetic shielding due to its properties. It was argued that the Mu-Metal Housing plays an active role in the transformer's functioning by cutting out unwanted signals, thus acting as more than just a housing.

The appellants' leaflet further supported their claim, stating that audio transformers are housed in Mu-Metal cases with specific features, indicating they are parts of the transformers. Additionally, evidence was presented that customs authorities had previously assessed Mu-metal housing as transformer parts under Heading 85.04.90. Considering these factors, the Tribunal concluded that the appellants had successfully demonstrated that the Mu-Metal Housings should be classified as parts of a transformer. Therefore, the impugned order was set aside, and the appeal was allowed.