TaxTMI 
TaxTMI 
1998 (11) TMI 285
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....hing but current to pneumatic converters type ITOPO-I. It has been noted that the basic function of the above item is to convert electronic analogue signals to pneumatic signals. It converts 4-20 mA dc current to 3.15 Psig and provided high output capacity to power any positioning or actuating device. The converter is usually located in the control loop between the controller and the positioner or actuator when a dc Milliamp input is applied to the voice coil, a directly proportional or inversely proportional pneumatic output signals is developed. It is stated in the order-in-original that the item is used in many applications when an electronic signal is supplied but a pneumatic device is to control such as positioners diapharmer actuated valves or actuaters. It is further stated that it can also be used where feedback to pneumatic controls from electronic analysers and transmitters is needed. 2. The detailed catalogue for converter from M/s. Bailey gives the complete functional description as follows : "The above function of converter is accomplished by analysing the input to stationery coil of an electro magnetic system. Flux lines exposed at the gap applying a proportiona....
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....ing device nor a controlling device. Therefore, it does not fall as a starting, stopping or operating devices either. He has also rejected the claim of the importer that the classification of the item under Chapter 90.32 should be based on the function of the equipment. He has observed that in this case although an Electrical signal is used, the equipment is meant to control pneumatic devices. He has also held that from the catalogue, nowhere it is established that it is a controlling device. The basic features of the item imported is that of a Transducer. He has referred to the definition of a transducer given in the new Penguin dictionary of electronics by E.C. Young is as follows : "Transducer:- Any device that convert electrical parameter for example, sound, pressure, or light, into electrical signals or vice-versa. The function of the item here is to convert electrical signals to pneumatic signals and thus it falls in the category of a "Transducer". 6. Noting the said definitions, the Assistant Collector has observed that the transducers do not have any specific classification under the customs tariff. They have to be classified according to their function that they....
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....r machines and apparatus besides parts. He submits that the item does not come within sub-heading 8543.80 which deals with other machines and apparatus, as the item is only a part of electronic item. Referring to page 1402 of Explanatory note of HSN, the Learned Advocate argued that for classifying the item under this heading the item should have an individual function. It is his contention that the item does not have an individual function. He submits that the Explanatory notes of Chapter 8479 is also to be read along with this note for classifying the product, where it has been held that the item would fall under Heading 8543 only, if it is not more specifically covered by any other heading in any other Chapter. He submits that the item is specifically covered under Chapter Heading 90.32 which reads "Automatic regulating or controlling instruments and apparatus". He also referred to Note 6 of the Chapter 90 which deals with the item falling under Heading 90.32 to support his claim. He submits that the item is inseparable from other portion of the machinery, hence the classification adopted by the department under Chapter Heading 8543 is not at all appropriate. He also submitted t....
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....ing this item, it should be an electrical machine or apparatus having individual function not having been specified elsewhere. 14. The Assistant Collector has noted in his order that the item is used in many application, where an electric signal is supplied but a Pneumatic device is to be controlled, such as, positioner diapharmer actuated valves or actuators. It is noted that the item can be used where feed back to pneumatic controls from electric analysers and transmitters is needed. This finding is supported by the product literature which has been extracted supra. Thus, it is seen that the item does surely have a specific defined function and such function can indeed be considered as 'individual function', as the use of the item appears to be a general one and not totally designed specifically for any set of a machinery as a specific and inseparable part, although it has to function in conjunction with other parts and is placed or located in the control loop between controller and the positioner or actuator, when a dc Milliamp input is applied to the voice coil, and when so done, a directly proportional or inversely proportional pneumatic output signals is developed. ....
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....ctions, not specified or included elsewhere in that chapter'. The item in question is not a mechanical appliance and hence this heading gets clearly ruled out. 17. We notice that the item is an 'Electrical apparatus' having an individual function, and it is not elsewhere specified in the Chapter 85, and hence its classification under sub-heading 8543.80 as "other machines and apparatus" is fully justified. There is no other ground urged by the appellant for consideration. Hence, the findings and conclusions arrived at by both the authorities are fully justified and that there is infirmity in the order and hence the appeal is rejected. Sd/- [S.L. Peeran] Member (J)  18. [Order per : Shiben K. Dhar, Member (T)]. - With respect to ld. Member (J) I am writing a separate order as under : 19. The catalogue placed in the appeal papers indicates that : "The IP Converter converts a standard current input signal to a standard pneumatic signal by generating a mechanical force proportional to the input current and then converting the mechanical force into a pneumatic output signal. This is accompl....
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....nbsp; 9032.20 Manostats 40% Other instruments and apparatus : 9032.81 Hydraulic or Pneumatic 60% 9032.89 Others 60% 9032.90 Parts and accessories 100% 23. It will be seen that old Tariff Item 90.24 refers to instruments and apparatus for measuring, checking, or automatic controlling the flow, depth, pressure or other otherwise variable liquid or gases or automatic control temperature. New corresponding Entry 90.32 refers to automatic regulating or controlling instruments and apparatus and includes thereunder "other instruments & apparatus". Basically in considering the classification of transducers as automatic regulating controlling instrument there is no difference between old tariff and new tariff. The rulings rendered by Tribunal therefore even in the context of old tariff are equally applicable to the new tariff after 1986. 24. From the records it is seen that this IP Converter which is a trans-ducer is a device which converts electric current signal into numerical pres....
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.... is used between electronic controller and the pneumatic positioner inasmuch as it passes pneumatic energy to the actuator after converting the electronic current received from electronic controller. 29. In other words, it has no "individual function" as such. Its classification therefore under Chapter 85.43 as machinery with individual function is ruled out and the correct classification would only be under C.T.H. 90.32. 30. In view of the reasons mentioned hereinbefore I set aside the impugned order and allow the appeal. Sd/-  [Shiben K. Dhar] Member (T) DIFFERENCE OF OPINION 31.In view of the difference of opinion between the  Members, following question arises for determination and for reference to Third Member by Hon'ble President. Whether the impugned goods "Converters" under Chapter sub-heading 8543.80 of the Customs Tariff as held by the Member (Judicial) and appeal to be rejected. or to hold the same classifiable under Chapter sub-heading 9032.89 of Customs Tariff Act and allow the appeal, as held by Member (Technical). Sd/-      ....
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....ical apparatus and as they were not elsewhere specified in Chapter 85, their classification under sub-heading No. 8543.80 as "other machines and apparatus" was fully justified. He agreed with the findings and conclusions of the Asstt. Collector of Customs, which had been confirmed by the Collector of Customs (Appeals), New Delhi. 36. The ld. Member (T) on the other hand had observed that the 'Converters' were in the nature of transducers and could not be considered as electrical machines for the purpose of classification under Heading No. 85.43. He also observed that the goods imported had no individual function. He proposed classification under Heading No. 90.32 of the Customs Tariff. 37. I have heard Shri Dinesh Chander, Advocate, who appeared for the appellants. He submitted that the goods imported were current to pneumatic converters and are usually referred to as I/P (ITOPOIV) Converters. These are part of the basic electrical/pneumatic control scheme and are used by the National Thermal Power Corporation Ltd. The appellants had sought classification under sub-heading No. 9032.89 of the Customs Tariff, while the Revenue had classified them under sub-heading No.....
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....he input to a stationary coil of an electromagnetic system. The flux lines exposed at the gap apply a proportional force to a small permanent magnet mounted on the flapper beam. The flapper, supported on a taut tensioning band, tends to rotate towards the nozzle increasing the nozzle back pressure. The air flowing out of the nozzle provides a restoring force, balancing the force at the magnet. The nozzle is supplied with air through an orifice from the output of a pneumatic booster which is also the pneumatic output of the unit. This arrangement provides a very linear relationship between the electric input and the pneumatic output signal. 41. It is seen from the diagram at Page 69 (relating to the basic electrical/pneumatic control scheme), read with Notes at Page 68 of the Paper book that I/P Converter plays an important role in the control of pressure and temperature of the gas or liquid in the pipeline. It, along with the pressure transmitter and pneumatic positioner, is placed in the field section. In the control room section are (1) electronic controller (2) setter and (3) auto manual station. Pressure transmitter senses the liquid or gas pressure and converts the pre....
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....d by them was classifiable under sub-heading No. 9032.89 of the Customs Tariff which covers automatic regulators of electrical quantities and instruments or apparatus for automatically controlling non-electrical quantities, the operation of which depends on an electrical phenomenon varying according to the factor to be controlled. According to them by the converter imported by them, pressure (pneumatic output - non-electrical) is controlled/regulated by an incoming electrical signal. 48. The ld. Member (T) has observed that the Converters were not electrical machines and did not have individual functions. From the product literature, it is seen that the conclusions drawn by the Member (T) are correct. 49. Section XVIII and Chapter 90 of the Customs Tariff covered, among others, measuring, checking, precision instruments and apparatus. Heading No. 90.32 covered automatic regulating or controlling instruments and apparatus. sub-heading No. 9032.10 covered thermostats; sub-heading No. 9032.20 covered Manostats. Other instruments and apparatus if hydraulic or pneumatic were classifiable under sub-heading No. 9032.81, sub-heading No. 9032.89 was residuary entry. As per C....
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....sub-heading No. 8543.30. Sub-heading No. 8543.80 was the residuary entry covering other machines and apparatus. 53. As explained in the HSN Explanatory Notes at Page 1402 Heading No. 85.43 covered all electrical appliances and apparatus which were not covered more specifically by a Heading of any other Chapter of the Tariff. Thus, Heading 85.43 was really in the nature of residuary Heading and the goods were to be considered for classification therein only when their classification under any other specific Heading in Tariff was ruled out. According to the Explanatory Notes at Page 1402, the electrical goods covered more specifically by other chapters were electrical machinery of Chapter 84 and certain instruments and apparatus of Chapter 90. Thus Chapter 90 will have precedence over Chapter 85. In the HSN Explanatory Notes, while dealing with the scope and structure of Chapter 85 it is provided that in the Chapter Heading 85.43 (along with Heading Nos. 85.05, 85.11 to 85.18 and 85.25 to 85.31), certain machines and appliances which depend for their operation on the properties or effects of electricity such as its electro-magnetic effects, heating properties etc., were cover....
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....trical signals, of known wave-form and magnitude, at an assignable frequency (high or low frequency, for example). These include, inter alia impulse generators, pattern generators, wobbulators (sweep generators). (3) Mine detectors based on the change of magnetic flux produced in the apparatus when brought near to a metal object. Similar detectors are used, for example, for detecting foreign metallic bodies in casks of tobacco, food products, timber, etc., and for locating buried pipes. (4) Mixing units, used in sound recording for combining the output from two or more microphones; they are sometimes combined with an amplifier. But mixing units specialised for cinematography are excluded (Heading 90. 10). (5)Noise reduction units for use with sound recording apparatus. (6) Defrosters and demisters with electric resistors for aircraft, ships, trains or other vehicles (except cycles or motor vehicles - Heading 85. 12). (7)Synchronisers for use when several generators are feeding into a common circuit. (8)Electrical mine detonators, consisting of a hand generator (dynamo) and a capacitor. (9)High or intermediate frequency amplifiers (including measu....