Tariff classification turns on essential function: automatic control devices for operational variables fall under Heading 9032, not electric control equipment.

Goods must be classified by their essential function. AVS Drive Controller, PM2 Soft Start Energy Saving Motor Controller, HESG-101 and CoGen-C System were designed to control speed, torque, turbine inlet valves and steam inlet valves, so they operate as automatic regulating or controlling devices. On the tariff description and explanatory notes, such apparatus falls under Heading 9032, not Heading 8537, which is reserved for boards, panels and similar equipment for electric control or distribution of electricity. The revenue's classification under Heading 8537 was therefore unsustainable.

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Issues: Whether the goods namely AVS Drive Controller, PM2 Soft Start Energy Saving Motor Controller, HESG-101 and CoGen-C System were classifiable under Heading 9032 or under Heading 8537 of the Central Excise Tariff Act, 1985.

Analysis: Heading 8537 covers boards, panels, consoles, desks, cabinets and other bases equipped for electric control or the distribution of electricity, including certain control assemblies. Heading 9032 covers automatic regulating or controlling instruments and apparatus. The determining factor is the nature and function of the goods. The goods in question were designed to control speed, torque, turbine inlet valves and steam inlet valves, and were therefore automatic controlling devices rather than equipment meant for electric control or for the distribution of electricity. On the tariff description and the relevant explanatory notes, such goods do not fall within Heading 8537.

Conclusion: The goods were correctly classifiable under Heading 9032 and not under Heading 8537; the classification adopted by the revenue was unsustainable.

Ratio Decidendi: Goods are classifiable according to their essential function, and devices that automatically regulate or control operational variables do not fall under the heading reserved for electric control or distribution of electricity.

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