Appellate Tribunal rules in favor of Company in customs classification dispute, directs refund of differential duty

The Appellate Tribunal CEGAT New Delhi allowed the appeal filed by the Appellant (Company) in a customs classification dispute. The Tribunal determined that the 'Differential Relays' imported by the Company were correctly classified under heading No. 85.18/27(3) of the Customs Tariff Schedule for use in protecting Generators in Circuits of 400 Volts and above. As a result, the Tribunal directed the Customs authorities at Bombay to refund the differential duty to the Appellants within two months from the date of the order.

---

---

Issues: Classification of imported goods under Customs Tariff Schedule.

In this case before the Appellate Tribunal CEGAT New Delhi, the Revision Application was filed by the Appellant (Company) under Section 131 of the Customs Act, 1962, which was transferred to the Tribunal under Section 131B. The goods in question were 'Ratio Differential Relay-spare parts for 10MW Brown Boveri Turbo Set', imported and cleared through the Port of Bombay. The Customs authorities initially classified the goods under heading No. 85.18/27(1) of the Customs Tariff Schedule, imposing a basic duty of 60% ad valorem and auxiliary duty of 15% ad valorem. The Appellants claimed a refund contending that the goods should be classified under heading No. 85.18/27(3) of the Customs Tariff Schedule. The claim was rejected by the Assistant Collector and the appeal before the Appellate Collector was also dismissed due to lack of proper evidence showing the application of the goods in circuits of 400 Volts or above.

The Appellants argued that the lower authorities did not consider the documentary evidence provided, including certificates from a Chartered Engineer and the manufacturer's representatives, indicating the application of the differential relays in circuits above 400 Volts. They also highlighted that differential relays are used in Transformers and Generators of ratings above 400 Volts. Referring to a publication, the Appellants asserted that the correct classification should be under heading No. 85.18/27(3) as 'Electrical apparatus for making and breaking electrical circuits, for the protection of electrical circuits' designed for use in Circuits of 400 Volts or above.

The Respondent did not challenge the evidence presented by the Appellants. After careful consideration of the submissions and evidence, the Tribunal concluded that the 'Differential Relays' in question were designed for use in protecting Generators in Circuits of 400 Volts and above. Consequently, the Tribunal allowed the appeal, directing the Customs authorities at Bombay to refund the differential duty to the Appellants within two months from the date of the order.

---