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TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 976
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....troller System". 2.1 The department, who investigated the matter came to the conclusion that the goods manufactured and cleared by the assessee were Control Panels incorporating programmable logic controllers, which are different from the automatic data processing machines falling under Heading No. 84.71 and are classifiable under Heading No. 85.37 of CETA, 1985, which covers "Boards, Panels, (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of Heading No. 85.35 or Heading No. 85.36, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, other than switching apparatus of Heading No. 85.17". Accordingly, two show-cause notices dated 29-9-88 and 19-10-88 were issued to the assessee asking them to show-cause as to why, - (i) the goods manufactured and cleared by them should not be classified under Heading No. 85.37 of the CETA, 1985 during the period from 1-3-86 to 30-9-88; (ii) differential duty of Rs. 53,16,956.60 should not be demanded under the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 read with Rule 9(2) o....
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....ot sustainable in law. 3. The case was adjudicated by the Ld. Commissioner of Central Excise, who held that only machines having data processing operation as a main function can be classified under Heading No. 84.71. The programmable logic controllers are used for controlling industrial plant and machinery in a desired manner. The programmable logic controller is a combination of machines, one of its component machine, being 84.71, intended to control plant and machinery in industrial environment. As per note 4 to Section XVI of HSN "where a machine including a combination of machines) consists of individual components (whether separate or interconnected by piping, transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the headings appropriate to that function". In view of this position, the Commissioner found that although the product is programmable logic controller incorporating an automatic data processing machine and performing specific functions other than data processing is classifiable in the heading ....
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.... fluid flow and speed etc. in industrial or commercial process in various automatic industrial plants like cement, thermal power station, steel plant, etc. (2) As per CBEC 37B Order No. 45/3/96-CX., dated 6-8-96, instruments and apparatus which consists essentially of (a) a measuring device (b) a control device and (c) a starting, stopping or operating device are to be classified under Heading No. 90.32. Programmable logic controller manufactured by them consists of - (i) a control device by way of servo meter, LED numeric indicators and indicator; (ii) it performs starting, stopping or operating by means of motor and magnetic contractor; (iii) it further performs the measuring operations by means of pulse generator, contract input, non-contact input, digital switch, sensor, converter. Therefore, it is their contention that the product manufactured by them falls under the Heading No. 90.32 in terms of the 37B order dated 6-8-96. (3) Difference between the programmable logic controllers and programmable processing controllers have been clearly brought out in the CBEC's 37B order dated 9-5-97. On a perusal of this order, it can be eas....
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....td. v. CCE, New Delhi-II - 2002 (141) E.L.T. 72 (Tri.-Del.) wherein it has been held that once the classification list is filed, penalty under Section 173Q is not warranted and the said decision of the Tribunal has been maintained by the Hon'ble Apex Court in the same case reported in 2003 (152) E.L.T. A257 (S.C.). (7) As regards the proposal for confiscation of plant and machinery, the same is not warranted as has been held in H.T. Bhavnani Chemicals (P) Ltd. v. CCE, Baroda - 1997 (92) E.L.T. 502. 5. The Ld. DR on the other hand reiterates the findings given by the Ld. Commissioner. He submits that as per the product literature and the various classification lists filed by the assessee, the goods have been described as programmable logic controllers/programmable controllers and such products are rightly classifiable under Heading No. 85.37 of the CETA, 1985. He submits that as per the appellant's own submission made before the department vide letter dated 12-7-88 addressed to the Superintendent, Central Excise Range-V, Division-III, Mumbai, the product has been described as consisting of; (i) programmable micro­processor/microcontroller based Cen....
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....and functions of the product and had suppressed the information from the department with mala fide intention to evade duty. Accordingly, the invocation of extended period of time by the adjudicating authority is correct in law and, therefore needs to be upheld. 6. We have carefully considered the rival submissions. 7. From the records it is seen that the assessee had submitted as early as in 1985 vide letter dated 11-11-85, the product catalogue of the product to be manufactured by them in collaboration with Yaskawa, Japan. The product description was given as follows :- R-84-H Advanced Programmable Controller for - (i) Factory automation (ii) Process control (iii) Flexible Manufacturing Systems (iv) Material Handling . The literature further states that the R-84-H is provided with software, PID control facility, which can make it suitable for process control such as temperature, pressure and flow rate. Data acquisition and open-loop control can be implemented using Analog input and output modules. 7.1 Further in the annexure-I to the show-cause notice dated 29-9-1988 it has been stated ....
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....ent types of controls classifiable under different headings of central excise tariff i.e. heading 85.37 and heading 90.32 respectively. The following specific differences have been pointed out between two types of controllers. Programmable Logic Controller Programmable Process controller These are for controlling various types of machines These are for controlling various types of processes Operations depends on set of pre-determined operations Operations depend on factor to be controlled Operations based on desired sequence of operations Operation operates basically by continuously monitoring and maintain the variable to be controlled such as pressure, flow, temperature, level etc. with/at pre-determined level No regulatory function Regulatory function by continuously monitoring the desired value with actual value and bringing variable to be controlled to the desirable value Conventionally it is relay based panel for electric control with timer and switches Regulating apparatus for process control for continuous process governing Relay based panel has been upgraded to programmable controller commonly known as programmable logic controller by using micro processor for ....
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....'ble Apex Court cited supra where the Hon'ble Apex Court was dealing with the classification of PXI controllers and in the said case the Hon'ble apex court held as follows : "39. In our view, the above argument of the importer is unsustainable for the following reasons. Firstly, it is nobody's case that a PAC/Programmable Process Controller by itself is an automatic regulating, controlling instrument or apparatus in terms of Chapter 90. On the contrary, in view of Chapter Note 2(b) to Chapter 90 read with Note 3 of the same Chapter, PACs/Programmable Process Controllers are parts and accessories of a system/instrument which are suitable for use solely or mainly with a number of machines, instruments, apparatus of the same Heading, i.e., 9032 like sensors, thermostats etc. In our view, PACs/Programmable Process Controllers imported by the assessee herein are suitable for use principally with Industrial Process Control Equipment like sensors, thermostats etc. which measures temperature, process etc. Therefore, they are correctly classifiable as a part of the said machine, instrument or apparatus. Secondly, a "control system" generally refers to the control of a device, process ....
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....twork. It provides connectivity between the industrial network and the I.O. Module. A network interface module works as a connector and adapter unit in order to provide a two way interconnection between external sensor unit and the ADP. Thus, I.O. Module is a hardware. It is also known as I.O. device or I.O. Point. It may be in the form of I.O. Cards or I.O. Boards. When I.O. Module is used to accept data (input) from sensors, transducers, Programmable Logic Controllers ("PLC"), computers etc. and then distributes the data (output) to other devices in the system, then I.O. Module is called as Distributed I.O. Module. Such system is also called as Distributed Control System ("DCS"), which is a control system used normally in a manufacturing plant or in any other kind of dynamic system. DCS, therefore, is used in a variety of industries to monitor and control distributed equipments. An I.O. Module is important from another angle also. It converts readings from sensors and provides output signals which are used for operating actuators (which make a device move or start working) via Network Interface Module. A Modular Distributed I.O. System which is also known as a Field Point provide....
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....is to be read. Note 3 incorporates Note 4 to Section XVI. Note 4 inter alia provides for a machine consisting of individual components which may be separate as long as they are intended to contribute to a clear defined function. The PACs/Programmable Process Controller, though separate from sensors, is an individual component intended to contribute to a clearly defined function. Note 3 of Chapter 90 has to be read with Note 2(b) of Chapter 90 and if so read then it becomes clear that PAC/Programmable Process Controllers, being parts and accessories and a regulating or controlling apparatus like sensors have got to be classified under CTH 9032.89.10. 42. For the above reasons, we hold that PACs (including embedded Controllers/Programmable Process Controllers), have been rightly classified by the Department under CTH 9032." 7.5 Similarly, in the case of CCE, Bangalore v. Asea Brown Boveri Ltd. - 2005 (182) E.L.T. 401 (Tri-Bang) this Tribunal had held that the distributor control system which is meant for controlling various processes like pressure, temperature, etc. would merit classification under Heading No. 9032.80 as per the Board's Circular No. 49/3/97-CX., dated 9-5....