1999 (4) TMI 207 - AT - Customs

Issues Involved:
1. Classification of the imported Air Drier (Molecular Sieve Battery) under the Customs Tariff.
2. Applicability of Exemption Notification No. 59/87-Cus., dated 1-3-1987.
3. Determination of whether the Molecular Sieve Battery functions as a dryer or a filtering apparatus.

Detailed Analysis:

1. Classification of the Imported Air Drier (Molecular Sieve Battery) under the Customs Tariff:
The primary issue in this case was the correct classification of the imported Molecular Sieve Battery (MSB) under the Customs Tariff. The importers sought classification under sub-heading No. 8419.39, which pertains to machinery for the treatment of materials by a process involving a change of temperature, such as drying. The Assistant Collector of Customs and the Collector of Customs (Appeals) classified the goods under sub-heading No. 8421.39, which covers filtering or purifying machinery and apparatus for gases.

2. Applicability of Exemption Notification No. 59/87-Cus., dated 1-3-1987:
The importers claimed the benefit of Exemption Notification No. 59/87-Cus., which would apply if the goods were classified under sub-heading No. 8419.39. This notification was not applicable if the goods were classified under sub-heading No. 8421.39, as determined by the lower authorities.

3. Determination of Whether the Molecular Sieve Battery Functions as a Dryer or a Filtering Apparatus:
The core of the dispute was whether the MSB functioned as a dryer or a filtering apparatus. The importers argued that the MSB removes moisture from the air, thus functioning as a dryer. They relied on a previous Tribunal decision in the case of Collector of Customs (Appeals) v. Wasan & Company. However, the lower authorities and the Tribunal found that the MSB operates through adsorption, which involves the surface retention of molecules, rather than a process involving a change of temperature. The technical specifications and expert definitions supported the view that the MSB functions to filter and purify compressed process air by removing moisture, carbon dioxide, and acetylene.

Tribunal's Findings:

Classification Under Heading No. 84.19:
The Tribunal examined Heading No. 84.19, which covers machinery for the treatment of materials by a process involving a change of temperature. The Tribunal concluded that the MSB does not subject the compressed process air to a heating process to cause a transformation resulting from temperature change. Therefore, classification under sub-heading No. 8419.39 was ruled out.

Classification Under Heading No. 84.21:
The Tribunal confirmed the classification of the MSB under Heading No. 84.21, sub-heading No. 8421.39, which covers filtering or purifying machinery and apparatus for gases. The MSB was designed to make the compressed process air free of moisture, carbon dioxide, and acetylene through adsorption, fitting the description of filtering or purifying apparatus.

Relevance of Cited Decisions:
The Tribunal found that the decisions cited by the appellants, such as those in the cases of Collector of Customs, Bombay v. Wasan & Company and Food Specialities Ltd. v. Collector of Customs, Bombay, were not applicable to the facts of this case. The cited cases involved machinery primarily functioning as dryers, whereas the MSB in question was determined to be a filtering apparatus.

Conclusion:
The Tribunal upheld the classification of the imported Molecular Sieve Battery under sub-heading No. 8421.39 of the Customs Tariff and rejected the appeal. The MSB was found to be a filtering/purifying apparatus rather than a dryer, and the benefit of Exemption Notification No. 59/87-Cus. was not applicable. The appeal was dismissed accordingly.

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