Capital goods treatment for furnace components supported waiver of pre-deposit where the controller aided temperature control.

A programmable logic controller used in a reheating furnace was treated as prima facie eligible as capital goods because it functioned as a component of the furnace and was required for temperature control. Rule 57Q(1) extended capital goods treatment to components, spares and accessories of machinery listed in serial number 2, so the controller did not need separate specification by name or function. On that basis, the claim was considered strongly arguable and waiver of pre-deposit of duty and penalty was granted.

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Issues: Whether the programmable logic controller used in the reheating furnace was prima facie eligible as capital goods as a component part of machinery covered by Rule 57Q, and whether pre-deposit of the demanded duty and penalty should be waived.

Analysis: The applicant had asserted that the programmable logic controller was a component of the furnace and was required for temperature control. That contention had not been rebutted. Clause (v) of the table below Rule 57Q(1) treated components, spares and accessories of goods specified in serial numbers 1 to 4 as capital goods. Since the furnace was covered at serial number 2, the component was not required to be separately specified by name or function.

Conclusion: A strong prima facie case was made out and waiver of deposit of the duty and penalty was granted.

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