Classification of 'spark plug insulator' under Customs Tariff Act upheld; exemption benefits not applicable.

MODI CHAMPION LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY

MODI CHAMPION LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY - 1996 (81) E.L.T. 497 (Tribunal) Issues Involved:
1. Classification of the product 'spark plug insulator' under the Customs Tariff Act.
2. Applicability of Notification No. 153/92-Cus for exemption benefits.

Issue-wise Detailed Analysis:

1. Classification of the Product 'Spark Plug Insulator':

The primary issue in this case is whether the product 'spark plug insulator' should be classified under Chapter Heading 8547.00 or 8546.00 of the Customs Tariff Act. The Assistant Collector classified it under Heading 8547.00, which covers insulating fittings for electrical machines, appliances, or equipment, and rejected the importer's plea for classification under Heading 8546.00, which pertains to electrical insulators used solely for fixing, supporting, or guiding electrical current conductors.

The Assistant Collector's decision was based on the interpretation that Heading 8546.00 covers insulators aiding in the transmission of electrical current conductors by fixing, supporting, or guiding, such as chain suspension insulators and rigid insulators. In contrast, Heading 8547.00 covers insulating fittings used for assembling spark plugs, which are used for ignition in internal combustion engines. The Assistant Collector also referenced the HSN Explanatory Notes, which state that spark plug bodies are included under Heading 8547.00.

The Collector (Appeals) confirmed this classification, noting that the literature provided by the importer described the product as an insulator but did not conclusively indicate that it falls under Heading 8546.00. The Collector emphasized that the product performs insulating functions but is not used solely for fixing, supporting, or guiding electrical current conductors, thus excluding it from Heading 8546.00.

The Tribunal upheld this decision, stating that Heading 8546 applies to insulators used for fixing, supporting, or guiding electrical current conductors and insulating them electrically from each other or from the earth. The Tribunal found that the spark plug insulator does not meet these criteria and is instead a part of the spark plug, which is classified as an electrical equipment under Heading 85.11. Consequently, the insulator, being a fitting wholly of insulating material for electrical equipment, falls under Heading 8547.00.

2. Applicability of Notification No. 153/92-Cus for Exemption Benefits:

The second issue concerns the applicability of Notification No. 153/92-Cus, which provides exemption benefits for items classified under Heading 8546.00. The Collector (Appeals) held that the notification is not applicable because the insulators used in spark plugs are designed to work with electrical circuits of 12 volts, whereas the notification applies to insulators designed for use in electrical circuits of 400 volts and above.

The Tribunal agreed with this reasoning, noting that the battery used in vehicles is generally 12 volts, and the electrical circuit is stepped up through an oscillator. However, this does not mean that the circuit operates at the stepped-up voltage. Therefore, the insulators in question do not qualify for the exemption under Notification No. 153/92-Cus, as they are not designed for use in circuits of 400 volts and above.

Conclusion:

The Tribunal concluded that the product 'spark plug insulator' is correctly classified under Chapter Heading 8547.00 of the Customs Tariff Act, as it is an insulating fitting for electrical equipment. The exemption benefits under Notification No. 153/92-Cus are not applicable, as the insulators are not designed for use in electrical circuits of 400 volts and above. The appeal was dismissed, and the classification and exemption decisions of the lower authorities were upheld.