TaxTMI 
TaxTMI 
2025 (6) TMI 1976
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....-Customs dated 01.03.2002. 2. The learned Counsel submits that the appellant M/s. GE India Industrial Private Ltd. is engaged in the manufacture of various electronic and electrical equipment and has been importing Relays i.e. numerical relays of various specifications since September 2004 and they are supplied to various customers in India, such as Chhattisgarh State Power Transmission Company Ltd., KSA Energy Control Automation Private Limited, Crompton Greaves, Neyveli Lignite Corporation Limited, etc., which are used in various distribution automation systems for protection of the electrical equipment. It is stated that the impugned Show-Cause Notice No. 5348 dated 11.06.2012 (June 2007 to November 2009) after investigations proposed to reclassify the impugned goods viz., F-650, SELCO TLine, GE ALPS, GE URL and SIPROTEC 4 7SA522 families of relays under CTI 8537 10 00 as multi-functional electrical apparatus as against CTI 8536 49 00; that the impugned goods were equipment having contact rating of more than 7 amperes for rejecting the Appellant's claim of exemption under Notification Notification No. 21/2002-Cus. dated 01.03.2002; demanded duty of 1,66,16,664/- under t....
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....pellant. The opinion of IIT, Mumbai rendered vide letter dated 22.06.2007 stated that the product 'Machine Terminal' was a numerical relay, which did not contain circuit breakers and switches. Thereafter, the Appellant was issued with the show-cause notice dated 11.09.2007 proposing to re-classify the goods under CTH 8537 by denying the benefit of exemption under the Notification No. 21/2002Cus. dated 01.03.2002. The Appellant submitted a detailed Reply dated 13.11.2007 along with the technical write-ups and evidences in support of the submission that the imported goods were rightly classifiable under CTI 8536 49 00 as Relays and that they were eligible for the benefit of exemption under the Notification No.21/2002-Cus. dated 01.03.2002. Thereafter, the learned Assistant Commissioner after examining the documents submitted by the Appellant vide Order-in-Original dated 10.12.2007 held that the goods imported were technically relays by character, which were classifiable under CTH 8536 and eligible for the benefit of exemption under the Notification No.21/2002-Cus. dated 01.03.2002 and the same had attained finality. Since the goods imported by M/s. GE India Industrial Pvt. Ltd. and M....
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.... utilising additional features that have been developed for effective isolation and identification of faults in electrical systems. Reliance is placed on product catalogues and the Test Reports of the Central Power Research Institute (CPRI). 2.3 Further learned counsel relying on the Section Notes and the Chapter Notes submitted that Section XVI of the First Schedule to the Customs Tariff Act, 1975 covers inter alia 'Machinery and mechanical appliances; electrical equipment; parts thereof'. Chapters 84 and 85 fall under the scope of Section XVI. Note 3 to Section XVI inter alia states that unless context otherwise requires, multi-functional machines are to be classified in the following manner: "Machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as being that function which performs the principal function". Note 5 to Section XVI states that the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the Headings of Chapter 84 or 85. The classification of multi-function machines according to the principal function is also reiterated in the HSN Explanatory ....
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....3-383, • Associated Millers v. Collector of Customs,1990 (50) ELT 633 (Tri. - Del), affirmed by the Hon'ble Supreme Court in 1991 (53) ELT A32; • Amazon Wholesale v. CAAR, 2023 (12) TMI 757 - Delhi High Court; • Xerox India Ltd. v. CC, 2010 (260) E.L.T. 161 (SC) • Logic India Trading Co. v. Commissioner of Customs, 2016 (337) E.L.T. 65 (Tri.-Bang.) 2.5 Additional reliance is placed on the following circulars issued by the Central Board of Excise & Customs (CBEC), wherein the classification of a multi-functional machine has been clarified to be under a certain heading of Section XVI as per its principal function in terms of Note 3 to Section XVI and these circulars are binding on the Department. Reliance in this regard is placed on CCE v. Ratan Melting & Wire Industries, 2008 (231) E.L.T. 22 (SC). a. Circular No. 45/1998-Cus. dated 30.06.1998 b. Circular No. 51/2004-Cus. dated 01.10.2004 c. Circular No. 17/2007-Cus. dated 19.04.2007 d. Circular No. 20/2013-Cus. dated 14.05.2013 e. Circular No. 36/2013-Cus. dated 05.09.2013 2.6 Further the learned Counsel submits that the issu....
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....rol or distribution of electricity. Further, the HSN Explanatory under CTH 8537 states that the goods under heading 8537 consist of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc. or mounted in a cabinet, desk, etc. The impugned goods are numerical relays that have evolved due to technological advancements to possess additional features such as metering, monitoring, control, etc., that can be programmed with logic. Mere presence of a microprocessor in the impugned goods does not mean that the same are numerical controllers or programmable controllers that are used for specific functions. 2.8 With regard to exemption, it is submitted that the impugned order held that the question of eligibility of benefit under the said Notification did not arise vis-à-vis contact rating as it had already been found that the impugned goods were not relays of CTH 8536 but multi-functional apparatus of CTH 8537. It is submitted that Sl. No. 244 of Notification No. 21/02-Cus. (during the relevant period) provided exemption from duty to all goods specified in List 26 and classified under Chapters 84, ....
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....tur, 2014 (310) E.L.T. 97 (Tri. - Bang.), affirmed in 2016 (340) ELT A204 (Supreme Court). • R. Venkatachalam v. Commr. of Central Excise, Chennai, 2000 (115) E.L.T. 192 (Tribunal), maintained in 2000 (118) ELT A242 (Supreme Court). • Northern Plastic Ltd. v. CCE, 1998 (101) ELT 549 (SC), • M/s. Samsung India Electronics Pvt. Ltd. v. Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi, 2023 (12) TMI 1155-CESTAT NEW DELHI, maintained in 2024 (7) TMI 1220 - SC ORDER 3. The Learned Authorized Representative for the Revenue submitted that the appellant at the time of import declared the impugned products as 'Feeder Terminal Relays' classifiable under CTH 8536 49 00 by claiming the benefit of the Notification No.21/2002-Cus. dated 01.03.2002. However, on examination based on the catalogues, technical literature and the purchase documents of the goods, it was found that these products are multifunctional equipment performing various functions. Since, CTH 8536 covers only relays, the impugned product with various multiple functions was not to be classified under CTH 8536, hence the dispute. The Notification N....
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.... orders observes that 'the relay is an electrical device that opens and closes under the control of another electrical circuit. It monitors abnormal conditions in the electrical systems, measures the abnormal values, isolates the faulty elements as quickly as possible. It is a protective device which isolates abnormal part from rest of the systems and ensures continuity of healthy part of electrical system. Whereas, the Intelligent Electronic Devices (IEDs) are microprocessor-based device with the capability to exchange data and control signals with another device over a communication link'. Therefore, since the product performs multiple functions, the question of classifying them as relays under CTH 8536 was ruled-out and Revenue classified them under CTH 8537 of the Customs Tariff and denied the benefit of Notification No. 21/2002-Cus. dated 01.03.2002. 4.3 In appeal No. C/27368/2013, the appellant M/s. GE India Industrial Pvt. Ltd., had filed four Bills of Entry describing the products as F-650-Feeder/Bay Protection System. The Commissioner in the impugned Order-in-Original No. 7/2013 dated 29.04.2013 observing that the product catalogue for F-650 described the products....
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....rical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 volts; connectors for optical fibres, optical fibre bundles or cables. 8536.10 - Fuses 8536.20 - Automatic circuit breakers 8536.30 - Other apparatus for protecting electrical circuits - Relays: 8536.41 - - For a voltage not exceeding 60 V 8536.49 - - Other 8536.50 - Other switches This heading covers electrical apparatus for a voltage not exceeding 1,000 volts generally used for dwellings or industrial equipment. However, heading 85.35 covers the apparatus described below for a voltage exceeding 1,000 volts. This heading also covers connectors for optical fibres, optical fibre bundles or cables. The heading includes: (I) APPARAT....
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....s, valves, voltage regulators, rheostats or luminous circuit diagrams. The goods of this heading vary from small switchboards with only a few switches, fuses, etc. (e.g., for lighting installations) to complex control panels for machine-tools, rolling mills, power stations, radio stations, etc., including assemblies of several of the articles cited in the text of this heading. The heading also covers: (1) Numerical control panels with built-in automatic data processing machine, which are generally used to control machine-tools. (2) Programmed switchboards to control apparatus; these permit variations in the choice of operations to be followed. They are normally used in domestic electrical appliances, such as washing machines and dish washers. (3) "Programmable controllers" which are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines. The heading excludes: (a) Telephone switchboards (heading 85.17). (....
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....y control and data acquisition). They have inbuilt advanced micro processors (CPU) programmed by specific software and these microprocessors are used to analyse power system voltages and current by converting analogue values to digital values and controlling various factors for the purpose of detection of faults in an electric power system". 4.6 Similarly, the F650 family is described as "comprehensive protection; control metering and monitoring package. The microprocessor-based architecture is a complete solution for different applications that complies with most relevant international standards". IEDs provide optimum off-the shelf, ready to use solutions equipped and configured with complete protection functionality and default parameters to meet the needs of a wide range of applications within generation, transmission and sub-transmission. The advanced F650 series incorporate advanced automation features including powerful programmable logic communication and SCADA capabilities that far surpass what is found in the average feeder relay. The F650 integrates seamlessly with other GE multiple relays for complete protection system. It is the powerful programming logic....
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....ve description and performance of the products, there is no doubt that they cannot be considered as relays described under CTH 8536 but fall under the category of numerical controls or programmable controllers as described under Chapter heading 8537 which are used by the power stations. It is also to be noted that the expert opinion sought from Indian Institute of Science, Bangalore vide letter dated 15.03.2012 clarified that GE F650 Digital Bay Controller, SELCO T-Line Generator control, production monitoring, GE ALPS, GE UR Family and SIPROTEC 4 7SA522 that are multifunctional apparatus which are suitable for measurement, recording, protection, control, display, communication etc., cannot be treated as relays. The Department of Electrical Engineering vide letter dated 29.03.2010 had also opined that multifunctional apparatus cannot be considered as relays. In view of the above, the products are rightly classifiable under Chapter heading 8537. 4.9 The case laws relied upon by the appellant are to the effect that the classification to be decided based on the principal function, which is irrelevant in the context of the present facts since the technical literature placed on....
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.... No. Chapter Heading Description of goods Standard rate Additional duty condition 244 84,85 or 90 The goods specified in List 26 15% -- ---- List 26 (12) Relays of contact rating upto 7 amperes Based on the above Notification No.21/2002-Cus. dated 01.03.2002, the impugned products being multifunctional product which cannot be considered as a simple relay are rightly classifiable under CTH 8537 and not eligible for the benefit of the Notification No. 21/2002-Cus. dated 01.03.2002 since they do not fall under the category of simplicitor relays that are exempted. 4.10 It is also to be noted that similar products were investigated and classified under CTH 8536 based on the technical literature on the ground that the principal function of the product was of a relay. The Order-in-Original No.245/2009 dated 16.09.2009, the product imported by the appellant M/s. GE India Industrial Pvt. Ltd., was F650-Feeder/Bay Protection System and question before the Original Authority was whether these products with multi-functional capabilities could be treated as relays and t....