STERLITE INDUSTRIES (INDIA) LTD. v. COMMNR. OF CUSTOMS, CHENNAI

A _MIS_ STERLITE INDUSTRIES (INDIA) LTD. # _,V._ COMMISSIONER OF CUSTOMS, CHENNAI MARCH 19, 2007 B [S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.] \- _Customs Tariff Act, 1975:_ _Sub-headings 9022. 19 and 9027. 00-"Fully automated sequential X-_ C _ray spectrometer"-'-C/assffication-Held, Tribunal has not examined the functional aspects of the apparatus-Matter remitted to Tribunal to decide the same_ de-novo _after examining the catalogue annexed in the recordsNotijication No. 46196-Cus dated 23. 7.1996._ D Appellant-assessee imported "Fully Automated Sequential X-ray Spectrometer" and filed its "Bill of Entry" for home consumption. It claimed benefit of partial exemption Notification No. 46/96-Cus dated 23. 7.1996 and, assessing the equipment under sub-heading 9027.00, paid the customs duty accordingly. The Revenue assessed the apparatus under Sub-he21ding 9022.19 and accordingly charged the customs duty. E AIIQwing the appeal of the assessee and remitting the matter to the Tribunal, the Court HELD: The apparatus imported by the assessee is multi-functional. It has an inbuilt software and automatic analysis program. It is the software in F the System which makes the system carry out multi-purpose functions. The computer processes the data. The configurations are also s:pecified in the assembly of the Spectrometer. The catalogue/ brochure produced indicates that the Spectrometer in question would be non-functional without the computer. These aspects have not been considered by the authorities below. G The Tribunal would, therefore, decide the matter _de novo_ after examining the catalogue annexed as Annexure-8 in its records. The Tl'ibunal can also consider the alternative submission of the assessee, namely, that the above item can fall also within sub-heading 9027.80. It is made clear that this Court has not expressed any opinion on merits. !Para 7) 188-E; 89'-A-B) H 84 85 STERLITE INDUSTRIES (INDIA) LTD. "· COMMNR. OF CUSTOMS. CHENNAI [KAPADIA. l.] A c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 151 of2002. From the Judgment and Order No. 1113 of2001dated13.07.2001 of the Customs, Excise & Gold (Control) Appellate Tribunal, South Zonal Bench at Chennai in Appeal No. C/R-26/97/MD. S.K. Bagaria, Rupesh Kumar and Tara Chandra Sharma for the Appellant. B P. Viswanatha Shetty, Sunita Rao, S.J. Aristotle, Shanti Bhushan and B. Krishna Prasad for the Respondent. The Judgment of the Court was delivered by KAPADIA, J. I. This civil appeal has been filed by Mis Sterlite Industries (India) Ltd. under section l30E of the Customs Act, 1962 against Order No. 1113 of 2001 passed by CEGA T ("the Tribunal") on 13. 7 .200 l . 2. The short' question which arises for determination in this civil appeal is whether Fully Automated Sequential X-ray Spectrometer is an apparatus D based on the use of X-ray under sub-heading 9022.19 as claimed by the Department or whether the said apparatus is classifiable as Spectrometer under sub-heading 9027.30 being an apparatus for physical or chemical analysis. 3. To decide the above question, we quote hereinbelow the following Heading of Chapter 90 of the Customs Tariff Act, 1975 which reads as under: E · "CHAPTER90 OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING, CHECKING, PRECISION, MEDICAL OR SURGICAL INSTRUMENT AND APPARATUS; PARTS AND ACCESSORIES THEREOF - F |Tariff|Descriptionofgoods|Rateofduty|| |---|---|---|---| |Item||Std. Prefnl.|| |9022|Apparatus based on the use||| ||ofX-rays orofalpha, beta or||| ||gamma radiations, whether or||G| ||not for medical, surgical, dental||| ||or veterinary uses, including||| ||radiography or radiotherapy||| ||apparatus, X-ray tubes and||| ||other X-ray generators, high||H| H ||86|SUPREME COURT REPORTS||(2007] 4 S.C.R.|| |---|---|---|---|---|---| ||||||,.,| |A||tension generators, control|||| |||panels and desks, screens,|||| |||examination or treatment|||| |||tables, chairs and the like.|||| |||-Apparatus basedonthe|||| |B||useofX-rays, whether or<br>not for medical, surgical,|||| |||dental or veterinary|||| |||uses, including radiography|||| |||or radiotheraphy apparatus:|||| |c|9022.12|-Computedtomography|300/o||| |||apparatus|||| ||9022.13|-Other,for dental uses|300/o||| |D|9022.14|-Other,for medical,'>urgical<br>or veterinary uses|300/o||| ||9022.19|-Forother uses|500/o||| |||-Apparatus based on the use|||| |||ofalpha, beta or gamma radiation,|||| |E||whether or not for medical,|||| |||surgical, dental or veterinary|||| |||uses, including radiography|||| |||or radiotherapy apparatus:|||| ||_902221_|-Formedical, surgical, dental|300/o||| |F||or veterinary uses|||~| ||_902229_|-Forother uses|500/o||| ||9022.30|-X-raytubes|500/o||| |G|||||| ||9022.90|-Other,including parts and|500/o||| |||accessories|||| ||Xxx|Xxx|Xxx||| |H|_CXfl.7_|Instruments and apparatus for|||| - ' STERLITE INDUSTRIES (INDIA) LTD. _v._ COMMNR. OF CUSTOMS, CHENNAI [KAPADIA,!.] 87 ,; " _r,..__ "' . -;' ,.. |STERLITE INDUSTRIES (INDIA) LTD.|STERLITE INDUSTRIES (INDIA) LTD._v._COMMNR. OF CUSTOMS, CHENNAI [KAPADIA,!.]|COMMNR. OF CUSTOMS, CHENNAI [KAPADIA,!.][KAPADIA,!.]|COMMNR. OF CUSTOMS, CHENNAI [KAPADIA,!.][KAPADIA,!.]<br>87| |---|---|---|---| ||physical or chemical analysis||A| ||(for example, polarimeters,||| ||refractometers, spectrometers,||| ||gas or smoke analysis apparatus);||| ||instruments and apparatus for||| ||measuring or checking viscosity,<br>porosity, expansion, surface tension|porosity, expansion, surface tension|B| ||or the like; instruments and||| ||apparatus for measuring or||| ||checking quantitiesofheat, sound||| ||or light (including exposure meters);|or light (including exposure meters);|| ||microtomes||c| |9027.10|-Gas or smoke analysis apparatus|25%|| |902720|-Chromatographs and||| ||electrophoresis instruments|25%|| |9027.30|Spectrometers, spectrophotometers<br>and spectrographs using optical||D| ||radiations (UV, visible, IR)|25%|| |9027.40|-Exposure meters|25%|| |9027.50|-Other instruments and apparatus||E| ||using optical radiations (UV, visible,|using optical radiations (UV, visible,|| ||IR)|25%|| |9027.80|-Other instruments and apparatus|25%|| |9027.90|~Microtomes;parts and<br>accessories"|25%|F| 4. The assessee imported Fully Automated Sequential X-ray Spectrometer from M/s Rigaku International Corporation, Japan. The said equipment is used by the assessee in its plant at Tuticorin. The said Spectrometer was imported for analyzing various alloys in the manufacture of Cathodes. The assessee filed its Bill of Entry for home consumption. They claimed assessment G under sub-heading 9027.00. They claimed the benefit of partial exemption Notification No. 46/96-Cus dated 23.7.1996. They paid customs duty (basic at 25% plus 10% additional customs duty). The Department, however, _assessed_ the above apparatus under sub-heading 9022.19, quoted above, read with the above notification and charged customs duty (basic) at 50% ad valorem plus H 88 [2007] 4 S.C.R. SUPREME COURT REPORTS ## A I 0% additional customs duty. 5. Basically, according to the Department, Spectrometer in the present case was X-ray based Spectrometer and, therefore, the same was classifiable in sub-heading 9022.19. According to the Department, X-ray based apparatus stood covered under section XVlII of HSN also and, therefore, the goods B were classifiable under sub-heading 9022.19. ~ 6. According to the assessee, in the present case, the Spectrometer in question is specifically named in ]sub-heading 9027.30. According to the assessee, the Department had erred in placing reliance on HSN when the Customs Tariff Act, 1975 has specifically laid down Rules of interpretation. c According to the assessee, Rule 3(a) of the Rules of Interpretation was applicable which says that the heading which provides a specific description shall be preferred to headings which provide general description. According to the assessee, under Heading 90.27 the above item Spectrometer has been mentioned without any qualification regarding the source material and, D[therefore, the Spectrometer ][is ][based on optical source, the X-ray source was ] immaterial as Spectrometer.per se was classifiable under sub-heading 9027.30. Before us, the assessee submitted, in the alternative, for the first time, that the above Fully Automated Sequential X-ray Spectrometer could fall under sub-heading 9027.80 as Special Apparatus. c E 7. We have gone through the literature/brochure concerning Fully Automated Sequential X-ray Spectrometer: We find from the brochure that tlte above System which is imported by the assessee is multi-functional. It has an inbuilt software. It has an inbuilt automatic analysis program. It is the software in the System which makes the system carry. out multi-pu~pose F[functions. The computer processes the data. The configurations are also ] specified in the assembly of the Spectrometer. _Prima facir;_ it appears that there is an inbuilt computer system in the Spectrometer. That computer appears to be an essential part of direct reading. These aspects have not been considered by the authorities below. The catalogue/brot;hure produced indicates that the Spectrometer in question would be non-functional without G the computer. Modem direct reading Spectrometer incorporates a computer in the System so that they can measure, process and analy::e the data. The catalogue shows the configurations which indicate _prima facie_ that the computer stands integrated with the Spectrometer. The catalogue indicates the type of apparatus. The catalogue shows inclusion of software programmes and computer. The catalogue shows that the Spectrometer i:. so designed that H ~- ... **==> picture [3 x 9] intentionally omitted <==** **----- Start of picture text -----**<br> r<br>**----- End of picture text -----**<br> STERLITE INDUSTRIES (INDIA) LTD. 1·. COMMNR. OF CUSTOMS. CHENNAI [KAPADIA. J.] 89 it functions in an integrated manner along with the computer and can be A operated and controlled only with such computer. None of these aspects had been considered by the authorities below including the Tribunal. Hence, we remit the matter to the Tribunal to decide the matter _de nova_ after examining the catalogue annexed as Annexure-B in its records. Before concluding, we may mention that our above opinion should not be treated as conclusive. The B Tribunal can also consider the alternative submission of the assessee, ·mmely, that the above item can fall also within sub-heading 9027 .80. In this regard "we express no opinion. 8. For the above .reasons, the impugned order dated 13.7.2001 of the Tribunal (CEGAT) is set aside and the matter is remitted to the Tribunal for its fresh decision in accordance with law after examining the catalogue annexed in its record. 9. This appeal is accordingly allowed with no order as to costs. RP. Appeal allowed. D