2025 (4) TMI 527 - AT - Customs

Classification of goods imported by the appellant - Carbon and Sulphur Analyzer CS-800 - to be classified under CTH 90271000 by treating it as Gas or Smoke analysis apparatus or not - HELD THAT - Clearly CTH 9027 is the heading which covers Instruments and apparatus for physical or chemical analysis (for example polarimeters refractometers spectrometers gas or smoke analysis apparatus); Instruments and apparatus for measuring or checking viscosity porosity expansion surface tension or the like; instruments and apparatus for measuring or checking quantities of heat sound or light (including exposure meters); microtomes . A plain reading of the coverage as per HSN would indicate that the kind of gas or smoke analysis apparatus which is specifically covered under CTH 90271000 are the one where the apparatus is used to analyze combustible gases or combustion by-products (burnt gases) and especially in coke ovens gas producers blast furnaces etc. for determining their content of carbon dioxide carbon monoxide oxygen hydrogen nitrogen or hydrocarbons - The technology it is using requires creation of fume or gas only with intent to ultimately test the presence of carbon or sulphur element in the metal and not the presence of carbon dioxide or sulphur dioxide gas in the metal. Therefore this particular equipment is not classifiable under CTH 90271000. It is also noted that different types of analysers have been imported through different ports and they have been classified under many headings including CTH 90279090 90278090. From perusal of the same it is also noticed that those equipments which are specifically meant for analysing gases like SOX/NOX i.e. sulphur dioxide and nitrous oxide etc. are getting classified under CTH 90271000 whereas other kinds of analysers are getting classified under CTH 90278090. As far as the argument that appellants themselves have started classifying the product under CTH 90271000 and therefore now they cannot go back and claim that it is not classifiable is concerned it is found that there is no estoppel on the appellant to challenge the classification even if they have started paying the duty under different heading during subsequent period. As far as the issue of payment under protest is concerned it has got no relevance for the present appeal as during the material period they had contested the classification and the said classification is being examined and not for the future classification practice adopted by them. Conclusion - The apparatus s primary function was to measure element content in solid samples not to analyze gases. The appellant was not estopped from challenging the classification even if they had previously classified the apparatus under CTH 90271000. The order of the Commissioner (Appeals) is not tenable and therefore liable to be set aside - Appeal allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue in this case was the correct classification of the 'Carbon and Sulphur Analyzer CS-800' imported by the appellant. The central question was whether the apparatus should be classified under CTH 90271000 as a 'Gas or Smoke analysis apparatus' or under a different classification, potentially a residuary heading within CTH 9027.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The classification of goods under the Customs Tariff is governed by the Harmonized System of Nomenclature (HSN). CTH 9027 covers instruments and apparatus for physical or chemical analysis, including gas or smoke analysis apparatus. CTH 90271000 specifically pertains to 'Gas or smoke analysis apparatus'. The HSN explanatory notes describe these as apparatus used to analyze combustible gases or combustion by-products in various industrial settings.

In the case of Dunlop India Ltd & Madras Rubber Factory Ltd Vs Union of India and others, the Supreme Court held that when a specific heading is available, reliance on a residuary heading is not tenable.

Court's Interpretation and Reasoning

The Tribunal examined whether the apparatus in question was primarily a gas analyzer as classified by the Commissioner (Appeals). The apparatus was used to determine the content of carbon and sulphur in metal samples, not to analyze gases like carbon dioxide or sulphur dioxide. The Tribunal noted that the apparatus created fumes or gases as a by-product of testing but was not intended to measure the content of these gases.

Key Evidence and Findings

The Tribunal considered the nature of the apparatus and its intended use. The apparatus was designed to measure the presence of carbon and sulphur in solid metal samples, not to analyze combustible gases or combustion by-products. The Tribunal also noted that similar apparatuses had been classified under different headings, such as CTH 90279090 and 90278090, depending on their specific use and the gases they analyzed.

Application of Law to Facts

The Tribunal applied the HSN explanatory notes to determine that the apparatus did not fall under CTH 90271000. The apparatus was not used to analyze gases in the manner described under that heading. Instead, it was used to determine the element content in metal samples, which did not align with the description of gas or smoke analysis apparatus.

Treatment of Competing Arguments

The appellant argued that the apparatus should not be classified under CTH 90271000 because it did not analyze gases as described in the HSN notes. The respondent relied on the Dunlop India Ltd case to argue that the specific heading should apply. The Tribunal found the appellant's argument more persuasive, noting that the apparatus's primary function was not gas analysis.

Conclusions

The Tribunal concluded that the apparatus should not be classified under CTH 90271000. The apparatus's primary function was to measure carbon and sulphur content in metal samples, not to analyze combustible gases or combustion by-products.

SIGNIFICANT HOLDINGS

The Tribunal held that the apparatus did not fall under CTH 90271000. The Tribunal emphasized that the apparatus's primary function was to measure element content in solid samples, not to analyze gases. The Tribunal also noted that the appellant was not estopped from challenging the classification, even if they had previously classified the apparatus under CTH 90271000.

Core Principles Established

The Tribunal established that the classification of goods should align with their primary function and use. Apparatuses that do not primarily analyze gases should not be classified under headings specific to gas analysis.

Final Determinations on Each Issue

The Tribunal set aside the order of the Commissioner (Appeals) and allowed the appeal, determining that the apparatus should not be classified under CTH 90271000.