2024 (1) TMI 1172 - AT - Customs

Gas chromatograph equipment for monitoring dissolved gas in mineral oil classified under CTSH 9027 20 00 as chromatographs not gas analyzers

El PE ENGINEERS LLP Versus COMMISSIONER OF CUSTOMS - AHMEDABAD

CESTAT Ahmedabad held that gas chromatograph equipment used for monitoring dissolved gas in mineral oil is classifiable under CTSH 9027 20 00 ... Classification of imported goods - Gas chromatograph used for monitoring dissolved gas in Mineral Oil - classifiable under CTSH 9027 20 00 or not - HELD THAT:- As is evident from the literature produced on behalf of the appellants, the word Gas in Gas Chromatograph refers not to the sample being analysed, but to the carrier gas which carries the vaporised sample (Mobile Phase) from the Inlet to the Column. It would be contrary to the HSN explanatory notes to classify Gas Chromatograph as Gas Analyser under CTSH 9027 10 00 instead of classifying the same as Chromatograph under CTSH 9027 20 00 which is more specific description. The HSN Notes while explaining the scope of “Chromatograph” has referred to all kinds of Chromatographs, whether Gas, Liquid, Ion or thin Layer Chromatographs and have not excluded Gas Chromatographs from Chromatographs. The US Customs Tariff, gives 10-digit sub-classification and as per which Gas Chromatograph appears at Sub-heading 9027. 20.50.50. Foreign manufacturer-supplier’s Invoice also mentions the said Sub-heading 9027.20.50.50. The Appellant’s claim for classification of Gas Chromatograph for monitoring of Dissolved gases in mineral oil, under CTSH 9027 20 00, is also supported by the decision of the HS Committee taken at its 64th Session. The product considered by the HS Committee in the said decision is “Online Dissolved Gas Analysis (DGA) Apparatus” used for monitoring dissolved gases in transformer oil, which consisted of Gas Chromatography System. The Hon’able High Court of Delhi has in the case of MANISHA PHARMA PLASTO PVT. LTD. VERSUS UNION OF INDIA [1999 (5) TMI 33 - HIGH COURT OF DELHI] held that the opinion of the HS Committee has a lot of pervasive value and should ordinarily be taken as binding. The subject goods imported by the Appellants are held to be classifiable as Gas Chromatograph under CTSH 9027 20 00. The impugned order is therefore set aside - Appeal allowed. Issues involved:The classification of goods 'MYRKOS Basic Field Package' as either 'Chromatographs and Electrophoresis Instruments' or 'Gas or Smoke Analysis apparatus' under CTSH 9027 20 00 and CTSH 9027 10 00 respectively.Issue 1 - Classification of goods:The appeal questioned whether the goods imported, a 'Gas chromatograph' for monitoring dissolved gas in Mineral Oil, should be classified under CTSH 9027 20 00 as 'Chromatograph' or under CTSH 9027 10 00 as 'Gas Analysis Apparatus'. The original adjudicating authority upheld the classification under CTSH 9027 20 00, but the Order-in-Appeal classified the goods under CTSH 9027 10 00. The dispute arose from the nature of the goods and their intended use.Details:- The goods were imported as 'Gas chromatograph' for monitoring dissolved gas in Mineral Oil.- The Appellants argued that the product is a 'Gas Chromatograph' for monitoring gases in mineral Oil, supported by technical specifications and product literature.- The Appellants claimed that the goods should be classified under CTSH 9027 20 00, specific for Chromatographs, rather than CTSH 9027 10 00 for Gas Analysis Apparatus.- Various legal references and decisions were cited to support the classification as Gas Chromatograph.Issue 2 - Interpretation of HSN Explanatory Notes:The judgment emphasized the interpretation of the HSN Explanatory Notes under Heading 90.27 to determine the correct classification of the goods. It was crucial to understand the distinction between 'Gas Chromatograph' and 'Gas or Smoke Analysis apparatus' as specified in the classification headings.Details:- The HSN Explanatory Notes clarified that 'Gas or smoke analysis apparatus' under CTSH 9027 10 00 analyze Combustible Gases or Burnt Gases, distinct from the goods in question that monitor gases in Mineral Oil.- The judgment highlighted the error in assuming the goods analyzed Combustible gases when they actually monitored gases in Mineral Oil.- The operational principles of Gas Chromatographs and Gas Analyzers were compared to differentiate between the two classifications.- The judgment stressed that the classification should align with the principal function of the apparatus, as per Note 3 of Chapter 90.Issue 3 - Precedents and Committee Decisions:The judgment referred to previous decisions and the HS Committee's decision to support the classification of the goods as Gas Chromatograph under CTSH 9027 20 00. Precedents and committee decisions played a significant role in determining the appropriate classification based on the nature and function of the goods.Details:- The judgment cited past cases where the opinion of the HS Committee was considered influential and binding in classification decisions.- The decision-making process involved analyzing the principal function of the apparatus, in this case, Gas Chromatography, to determine the correct classification.- Precedents like Manisha Pharma Plasto Pvt. Ltd. and CCE v. Telco Limited were referenced to support the classification of Gas Chromatographs under CTSH 9027 20 00.- The judgment highlighted the importance of following committee decisions and legal precedents in classifying goods accurately.In conclusion, the Appellate Tribunal CESTAT AHMEDABAD ruled in favor of classifying the imported goods as Gas Chromatograph under CTSH 9027 20 00, overturning the previous classification under CTSH 9027 10 00. The judgment emphasized the technical specifications, operational principles, and past decisions to support the reclassification, ensuring alignment with the HSN Explanatory Notes and the principal function of the apparatus.