1998 (11) TMI 285 - AT - Customs

Summary

Issues Involved:
1. Classification of the imported 'Converters' under the Customs Tariff Act, 1975.
2. Determination of whether the 'Converters' are classifiable under Chapter heading 9032.89 or Chapter sub-heading 8543.80.
3. Examination of the function and nature of the 'Converters' to decide the appropriate classification.

Issue-wise Detailed Analysis:

1. Classification of the Imported 'Converters' under the Customs Tariff Act, 1975:

The appellants imported a consignment of 'Converters' and claimed assessment under Chapter heading 9032.89, seeking exemption from auxiliary and countervailing duty under Notification No. 69/86 read with 112/87. The department, however, classified the item under Chapter sub-heading 8543.80. The Assistant Collector's examination revealed that the item converts electronic analogue signals to pneumatic signals, converting 4-20 mA dc current to 3.15 Psig, and providing high output capacity to power positioning or actuating devices. The item was found to be a transducer, converting electrical signals to pneumatic signals.

2. Determination of Whether the 'Converters' are Classifiable under Chapter Heading 9032.89 or Chapter Sub-heading 8543.80:

The department relied on the Explanatory notes of Chapter 90.32, which specifies three features for classification under this heading: a measuring device, a controlled device, and a starting, stopping, or operating device. The Assistant Collector concluded that the item did not meet these criteria and classified it under Chapter sub-heading 8543.80, which covers electrical machines and apparatus with individual functions not specified elsewhere in Chapter 85. The item was deemed to perform an individual function of converting electrical analogue signals to pneumatic signals.

3. Examination of the Function and Nature of the 'Converters' to Decide the Appropriate Classification:

The appellants argued that the item converts electrical current signals into pneumatic pressure and should be classified under Chapter heading 9032.89 as 'Automatic regulating or controlling instruments and apparatus'. They contended that the item does not have an individual function and is not specified elsewhere in Chapter 85. The department maintained that the item is a transducer and has an individual function, thus justifying its classification under 8543.80.

Separate Judgments Delivered by the Judges:

Judgment by Member (J):

The Member (J) held that the item has a specific function of converting electrical signals to pneumatic signals, making it an electrical apparatus with an individual function. The classification under sub-heading 8543.80 was justified as the item was not specified elsewhere in Chapter 85.

Judgment by Member (T):

The Member (T) disagreed, stating that the item is a transducer and does not have an individual function. The item is part of a control system and cannot function independently. The correct classification was under Chapter heading 9032.89, as it is used in automatic regulating or controlling instruments and apparatus.

Opinion of the Third Member (T):

The Third Member (T) agreed with Member (T), concluding that the item is classifiable under sub-heading 9032.89. The item is part of a control system and does not have an individual function, making it appropriate for classification under Chapter heading 9032.89.

Final Order:

In view of the majority decision, the imported 'Converters' were held to be classifiable under sub-heading 9032.89 of the Customs Tariff, and the appeal was allowed.