TaxTMI 
TaxTMI 
2025 (12) TMI 1566
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....edule of the Customs Tariff Act, 1975 or otherwise. 2. Submission made by the applicant 2.1 GE Oil & Gas India Private Limited (hereinafter referred to as "the Applicant"), is a private limited company and is registered in India under the Companies Act, 2013. 2.2 The Applicant is a part of Baker Hughes Group and is controlled by Baker Hughes Company, a US corporation listed on NASDAQ. In this regard, it is pertinent to note that the Applicant has undergone substantive changes in its business organizational structure since 2017. 2.3 The Applicant develops and deploys the most advanced technologies to assist energy and industrial firms seeking for more efficient, reliable, and cleaner solutions. It is, inter-alia, engaged in the business of import and sale of inter-alia flowmeters along with their parts and components in India. 2.4 The subject goods proposed to be imported by the Applicant are products of "Panametrics" business line. The subject goods are utilized for measuring the rate at which gas flows through both open and close pipes. The subject goods are suitable to be used in industries such as oil and gas. It is pertinent to mention that in such industries, pr....
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....th a useful but relatively inaccurate readout. A different application of ultrasonic to flow measurement can be found in flumes and weirs where the level of the flowing fluid, measured by ultrasonic reflection is to calculate the flow rate" 2.6 On analysis of the aforementioned definition, it is noted that flowmeters which employ the principle of ultrasonic flow measurement are called as ultrasonic flowmeters and are of various types including contra propagating type, axial-transmission contra propagating type and deflection (drift) type flowmeters. 2.7 In the instant case, the subject goods employ the principle of ultrasonic flow measurement and is particularly "contra propagating type of ultrasonic flowmeter" because it operates on a measurement method which is based on the "transit time difference". The principles of "transit time flow measurement" are identical to the principles employed in contra propagating type of ultrasonic flowmeter. The nomenclature of both the principles can be interchangeably used. 2.8 Thus, in the view of the above, it is evident that the subject goods operate on the principles of ultrasonic flow measurement i.e., on sound frequencies....
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....ion representing some measurement of process variable such as temperature, flow, or pressure to master device i.e., secondary equipment which are typically installed at the customer's /installation site, if needed. It is the master device i.e., secondary equipment which performs the controlling function and subject goods on which the advance ruling is sought, only measures flow rate. On the other hand, secondary equipment can send commands to the slave device i.e., subject goods for enabling remote diagnostics, monitoring, and efficient troubleshooting of field devices etc. 2.13 Hence, the measurement of rate of flow by the subject goods is pre-cursor to the controlling function. The purpose of installing the protocols in the subject goods is only to make available the measured value in the required signal format as inputs to an ADPM based third party system which thereafter can send signals to secondary equipment for specified actions. The subject goods merely relay measurement data for data recording and analysis of values. The functioning of the subject goods is entirely independent and provides an output of measurement values only. Therefore, effectively, protocols such ....
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....nced clamp-on gas ultrasonic transducers per channel, a preamplifier, and a clamping fixture for mounting the transducers on the pipe. It is not imported with taps, valves, control device or any starting/stopping/operating device. Measurement parameters The product measures standard and actual volumetric flow, and flow velocity. The rate of flow is expressed in SI Unit/Metric Unit/Imperial Unit. Display screen DigitalFlow GC868 consists of two independent software-configurable backlit LCD for displaying flow in numerical or graphic format. It also displays logged measurement data. Communication protocols Communication protocol used in DigitalFlow GC868: either Modbus RS232 or Foundation Fieldbus (as per the requirement of the customer). DigitalFlow GC868 can transmit the stored data and displayed readings to a remote ANSI terminal or a personal computer by connecting the meter's RS232 interface to the serial port of the PC. B. DigitalFlow GF868 i. For the ease of reference, the image of DigitalFlow GF868 as assembled at the installation site is provided below: ii. The technical specifications in the light of the function performed by Digit....
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....t software-configurable backlit LCD for displaying flow in numerical or graphic format. It also displays logged data and other diagnostics. Communication protocols Communication protocol used in DigitalFlow GC868: either Modbus RS232 or Foundation Fieldbus (as per the requirement of the customer). Customers can also use a modified GF868 that provides a MODBUS to communicate to an internal network. C. PanaFlow gas meter system (Panametrics ultrasonic flow meters for gas) i. For the ease of reference, the image of PanaFlow gas meter system in the 'as imported condition' is provided below: ii. The said product is available in two models: (a) one-path/one channel PanaFlow Z1G (b) two-path/two channel PanaFlow Z2G iii. The technical specifications in the light of the function performed by PanaFlow gas meter system are elaborated in the table below: Particulars Description Applications The Panaflow gas meter system is a complete ultrasonic flow metering system. It is specifically designed for the measuring the rate of flow of acoustically conductive gases which have high levels of impurities such as biogas, natural....
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.... in nature. D. TransPort PT878GC i. For the ease of reference, the image of TransPort PT878GC in the 'as imported condition' is illustrated below: ii. TransPort PT878GC is available in two models: (a) PT878GC-01: This model covers pipe sizes from 3/4 in. to 12 in. (20 to 300 mm) (b) PT878GC-02: This model covers pipe sizes from 4 to 24 in. (100 to 300 mm). iii. The only difference between the aforementioned models is its ability to be mounted on a specified pipe size and no other difference. Further, depending upon the model, only the programming in the instrument is altered and physically, there is no modification to the instrument. Resultantly, the functions performed by these two models along with the technical specifications as elaborated in foregoing paragraphs will be applicable on these two models also. iv. The technical specifications in the light of the function performed by TransPort PT878GC are elaborated in the table below: Particulars Description Applications TransPort PT878GC is a complete ultrasonic flow metering system for measuring the rate of flow of acoustically conductive gases with min....
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....or measurement of rate of flow of gases. Thus, upon application of GRI 1, the subject goods are classifiable under Chapter 90 of the Customs Tariff which covers "Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof" and at the 4-digit level, under CTH 9026. The relevant portion of CTH 9026 of the Customs Tariff has been reproduced herein under for the sake of reference: Heading/Sub- heading/Tariff Item Description of Goods 9026 Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases (for example, flowmeters, level gauges, manometers, heat meters), excluding instruments and apparatus of heading 90.14, 90.15, 90.28, or 90.32 9026 10 - For measuring or checking the flow or level of liquids 9026 10 10 - Flow meters 9026 10 20 -- Level Gauges 9026 10 90 - Other 9026 20 00 For measuring or checking pressure 9026 80 -Other instruments or apparatus : 9026 80 10 --- Heat meters 9026 80 90 --- Other 9026 90 00 -Parts and accessories 3.3 Before examining the classificati....
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....e indicate the rate of flow (in volume or weight per unit of time) and are used for measurement of flow both through open channels (rivers, waterways, etc.) and through closed conduits (piping, etc. (3) Flowmeters which operate by using magnetic fields, ultrasound or heat. This heading exclude's: (a) Hydrometric paddle-wheels for measuring the rate of flow in rivers, canals, etc., which fall in heading 90.15 as hydrological instruments. (b) Apparatus which merely indicate the total amount of liquid delivered over a period, which are classified as supply meters in heading 90.28." 3.5 The scope of HSN Explanatory Notes to CTH 9026 for classification of subject goods as flowmeters has been discussed below: a. This heading excludes instruments and apparatus more specifically covered by other headings of the Nomenclature such as CTH 8481, 9015, 9025 and 9027. b. This heading covers instruments and apparatus for measuring or checking the flow, level, pressure, kinetic energy or other process variables of liquids or gases. c. It generally incorporates an element sensitive to variations in the quantity to be measured whi....
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.... controlling device and a stating/stopping/operating device, in order to be classified under CTH 9032? 5. In continuation of (4), whether the subject goods have the capacity to automatically control or regulate the flow of gases in terms of CTH 9032? 3.7 Upon application of the aforementioned test to the facts of the instant case, it is submitted that the said goods namely (i) DigitalFlow GC868, (ii) DigitalFlow GF868, (iii) PanaFlow and (iv)TransPort PT878GC, are correctly classifiable under CTH 9026 of the Customs Tariff, on the basis of the following reasons given below: 3.7.1 Upon perusal of the technical specifications elaborated above, it is evident that the said products satisfy the criteria laid down in HSN Explanatory Notes to CTH 9026, in the following manner as given below: (a) These products are an ultrasonic flowmeter which performs the function of measuring the rate of flow of gases, like natural gas, compressed air, fuel gases, erosive gases, corrosive gases, toxic gases, etc., in closed conduits (pipelines). (b) These are fitted with a transmitter for producing electrical output (in 4-20mA) at the ....
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....isfied. 3.7.4 In addition to above, it has been noted that, the transmitter of the said products, except the product namely TransPort PT878GC, has the ability to transmit the reading of the said products to secondary equipment's through communication protocol such as MODBUS/HART. These secondary equipments are typically installed at the customer's /installation site and performs the controlling function. The subject goods on which the advance ruling is sought, only measures flow rate. The capability of the subject goods to communicate over communication protocols such as MODBUS/HART/Foundation Fieldbus does not mean that the goods are capable of performing any controlling function. It only allows measurement data transmission from the flowmeter to the chosen equipment of the user. The signals produced by the flowmeter is sharing measurement readings in compatible output/language which is understood by the secondary equipment. Hence, the purpose of installing the communication protocol in the subject goods is only to make available the measured value in the required signal format to the secondary equipment for information/further processing, as per the requirement of t....
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....Commissionerate 4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. Ultrasonic Flow Meter intended for gas application bearing model nos. (i) DigitalFlow GC868, (ii) DigitalFlow GF868, (iii) PanaFlow and (iv)TransPort PT878GC, at the jurisdiction of Office of the Commissioner of Customs, Air Cargo Complex, Mumbai. The application was forwarded to the Office of the concerned Commissionerate for their comments on 28.02.2025. 4.2 The concerned Commissionerate vide their letter dated 16.06.2025 submitted as follows: ⮚ Ultrasonic flow meters measure the flow rate of gas through transmitting and receiving ultrasonic waves. They find the velocity of the gas by calculating the time difference (transit time) or frequency shift (Doppler effect) of these waves while traveling with and against the gas flow. Though their basic function is flow measurement, most ultrasonic flow metering systems, especially in industrial applications such as custody transfer or process control, extend beyond mere measurement. They usually include functionality to: Monitor: Measure and report the gas flo....
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....gaonkar, applicant appeared for the hearing and reiterated the submissions made in the application. They contended that these gas flowmeter work on ultrasonic principle and use time transit method. They reiterated and emphasized that these devices can only measure the rate of flow and cannot perform any other function as stipulated in exclusion in terms of CTH 9026. They contended that these devices merit classification under CTH 9026 only and more particularly under CTI 90268090. They further contended that CTH 9028 and 9032 is not applicable considering the specific function of the devices as only limited to measuring the flow of gases. They relied upon the several cases/CAAR Rulings in the matter of M/s. Endress+Hauser (India) Pvt Limited, issued by the CAAR, Mumbai. Nobody appeared on behalf of the Department for hearing. Discussion and findings 6.1 I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing and comments received from the concerned Commissionerate. I proceed to pronounce a ruling on the basis of information available on record as well a....
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....pable of performing any control or regulation functions. Therefore, in their imported condition, the subject goods do not have the inherent capability to autonomously control or regulate the flow of gases, such as by maintaining a desired setpoint, adjusting flow, or compensating for disturbances. Their sole function is to measure and provide accurate flow rate data, which is used by the applicant's customers to manage their operations efficiently and in a safe manner. 6.5 Based on the applicant's submissions and the technical specifications of the subject goods, it is evident that the products namely (i) DigitalFlow GC868, (ii) DigitalFlow GF868, and (iii) PanaFlow, are designed to provide measurement data, specifically, the flow rate of gases, to secondary equipment through communication protocols such as MODBUS, HART, or Foundation Fieldbus. In contrast, the product TransPort PT878GC is limited to measuring the flow rate of gases and does not transmit data to any automatic regulating or controlling apparatus. In the case of the product DigitalFlow GF868, while it also has the capability to measure additional parameters such as net heat....
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....henomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilised against disturbances, by constantly or periodically measuring its actual value; and (B) 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, which are designed to bring this factor to, and maintain it at, a desired value, stabilised against disturbances, by constantly or periodically measuring its actual value. (I) INSTRUMENTS AND APPARATUS FOR AUTOMATICALLY CONTROLLING THE FLOW; LEVEL, PRESSURE OR OTHER VARIABLES OF LIQUIDS OR GASES, OR FOR AUTOMATICALLY CONTROLLING TEMPERATURE Automatic control apparatus for liquids or gases and apparatus for automatically controlling temperature form part of complete automatic control systems and consist essentially of the following devices: (A) A device for measuring the variable to be controlled (pressure or level in a tank, temperature in a room, etc.); ....
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....ue, and then automatically actuating a control mechanism (such as a valve, pump, or switch) to bring the variable to the desired level and maintain it there, stabilizing it against any external disturbances. Such apparatus typically consists of three integrated components: (a) a measuring device, (b) a control device that compares values, and (c) an operating device that executes corrective actions. These components may be combined into a single unit or operate together as a functional unit to perform the regulating or controlling function automatically. 6.8 In the present case, the products namely, (i) DigitalFlow GC868, (ii) DigitalFlow GF868, and (iii) PanaFlow, are ultrasonic flow meters that measure the rate of gas flow using transit-time ultrasonic technology, convert the measured data into digital form, and transmit this data to third-party systems such as ADPM platforms via communication protocols like MODBUS, HART, or Foundation Fieldbus. However, these devices do not themselves perform any control functions such as comparing the measured value with a desired setpoint or actuating control devices like valves or....
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....les of this Chapter are to be classified according to the following rules: (a) Parts and accessories which are goods included in any of the headings of this Chapter or of Chapter 84, 85 or 91 (other than heading 84.87, 85.48 or 90.33) are in all cases to be classified in their respective headings; (b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 90.10, 90.13 or 90.31) are to be classified with the machines, instruments or apparatus of that kind; (c) All other parts and accessories are to be classified in heading 90.33". 6.12 From the technical specification and functional details of these products, there is no doubt that these are flowmeter which are used to measure the flow rate of the gases. The Heading 9026 covers "Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases (for example, flowmeters, level gauges, manometers, heat meters), excluding instruments and apparatus of he....
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....ressure (fixed aperture) flowmeters ... ... ... (2) Variable area (variable aperture) flowmeters ... .... (3) Flowmeters which operate by using magnetic fields, ultrasound or heat. This heading excludes: (a) Hydrometric paddle-wheels for measuring the rate of flow in rivers, canals, etc., which fall in heading 90.15 as hydrological instruments. (b) Apparatus which merely indicate the total amount of liquid delivered over a period, which are classified as supply meters in heading 90.28." 6.13 The Heading 9026 covers instruments and apparatus for measuring or checking the flow, level, pressure, or other variables of liquids or gases (for example, flowmeters, level gauges, manometers, heat meters), while specifically excluding instruments and apparatus classified under headings 9014, 9015, 9028, or 9032. According to the Explanatory Notes to heading 9032, instruments classified under that heading typically consist of three integrated components: (a) a measuring device, (b) a control device that compares the measured value with a desired value, and (c) an operating device that initiates corrective action. In ....
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....the Customs Tariff Act, 1975, as a part of the automatic controlling or regulating apparatus. 6.14.2 Further, as discussed above, the product TransPort PT878GC is an ultrasonic flowmeter designed solely to measure the flow rate of gases within a pipe using ultrasonic sound waves. It functions as a standalone measuring instrument and does not possess the capability to transmit data to or interface with any automatic regulating or controlling system. As it is limited to the measurement function and not part of any automatic control apparatus, it is appropriately classifiable as a flowmeter under Heading 9026, which specifically covers instruments for measuring the flow of liquids or gases, including ultrasonic devices. Since there is no dedicated subheading at the eight-digit level for gas flowmeters under Heading 9026, and the product does not fall under the scope of Heading 9032 (which covers automatic regulating or controlling instruments), the correct classification is under the residual subheading CTI 9026 80 90 (Other) of the First Schedule to the Customs Tariff Act, 1975, in accordance with General Interpretative Rule 1 and the relevant Explanatory Notes to Heading 9026.....
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....as Rubber Factory Ltd. v. Union of India & Others [1983 (13) ELT 1566 (SC)] and Vareli Weaves Pvt. Ltd. v. Union of India [1996 (83) E.L.T. 255 (S.C.)], which reaffirm this position. Although, it is accepted that these flow meters may function as components within an automatic control system, their classification as parts or accessories under heading 9032 is governed by Notes 1 and 2 to Chapter 90. Specifically, Note 2(a) to Chapter 90 provides that measuring instruments specifically covered under another heading shall be classified in that heading, even if they are part of a more complex system. As ultrasonic flow meters are specifically included under CTH 9026, they are classifiable under this heading, even when used as parts of systems covered under CTH 9032. In view of the above, I do not agree with the contention of the concerned Commissionerate that these flow meters fall under CTH 9032. Although they are essential components that provide primary measurement inputs for automatic regulating systems, they remain classifiable under CTH 9026 by virtue of their specific function and explicit inclusion in that heading, in accordance with Note 2(a) to Chapter 90. 8. In view....