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of <h1>Classification of Measuring Devices: Importance of Advance Rulings for Trade Predictability</h1> <h3>IN RE : ENDRESS + HAUSER (INDIA) PVT. LTD.</h3> IN RE : ENDRESS + HAUSER (INDIA) PVT. LTD. - 2022 (381) E.L.T. 416 (A. A. R. - Cus. - Mum.) Issues Involved:1. Classification of measuring devices (flowmeters and level measurement instruments).2. Applicability of Heading 90.26 vs. Heading 90.32.3. Consideration of past import classifications and pending appeals.4. Allegations of mala fide intentions by the applicant.Detailed Analysis:1. Classification of Measuring Devices:The applications filed by M/s. Endress+Hauser (India) Pvt. Ltd. seek to classify various measuring devices, including electromagnetic flowmeters, thermal mass flowmeters, ultrasonic flowmeters, vortex flowmeters, and a capacitance point level measuring device. The devices are used for measuring the flow, level, pressure, and temperature of liquids and gases across various industries.2. Applicability of Heading 90.26 vs. Heading 90.32:The primary issue revolves around whether these devices should be classified under Heading 90.26, which covers 'Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases,' or under Heading 90.32, which pertains to 'Automatic regulating or controlling instruments and apparatus.'Analysis of Heading 90.26:- The flowmeters and level measuring devices measure parameters such as flow rate, temperature, and level, and provide the measured values in digital or analog formats for further processing.- The HSN Explanatory Notes for Heading 90.26 include instruments for measuring flow using principles such as magnetic fields, ultrasound, heat, and differential pressure, which align with the operating principles of the devices in question.- The devices do not possess the capability to independently control or regulate the flow of liquids or gases, as they lack control devices and starting, stopping, or operating devices required for classification under Heading 90.32.Analysis of Heading 90.32:- Heading 90.32 applies to instruments that automatically control variables by measuring and maintaining them at desired values.- The devices in question do not incorporate the necessary components for automatic control, such as a control device or an operating device.- The devices are primarily measuring instruments and do not perform any controlling functions independently.3. Consideration of Past Import Classifications and Pending Appeals:- The applicant had previously imported similar measuring instruments and classified them under Heading 90.26, but the original authority reclassified them under Heading 90.32.- The Commissioner (Appeals) upheld this reclassification, but the applicant has filed an appeal, which is pending before the CESTAT.- The current applications do not involve the same products as the pending appeal, and the classification should be determined based on the specific characteristics and functions of the devices in question.4. Allegations of Mala Fide Intentions:- The Jurisdictional Commissionerate alleged that the applicant intended to evade duties by importing the goods under a different heading from a different port.- The applicant clarified that the decision to import through the Sri city SEZ was based on logistical and operational efficiency, and they sought advance rulings to ensure predictability in their operations.- The authority found these allegations unsubstantiated and emphasized the importance of advance rulings in promoting certainty and predictability in international trade.Conclusion:The instruments/devices under consideration are classified under Heading 90.26, with specific sub-headings for flowmeters (9026 10 10) and level measuring instruments (9026 10 20). The devices are measuring instruments and do not perform any controlling functions, thus not falling under Heading 90.32. The authority dismissed the allegations of mala fide intentions, recognizing the applicant's transparency and the role of advance rulings in facilitating trade.
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