M-S. H.V. INDUSTRIAL ELECTRONICS PVT. LTD. v. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS

Citation: [2006] SUPP. 3 S.C.R. 729

Court: Supreme Court of India

Bench: ASHOK BHAN, MARKANDEY KATJU

Case summary

M-S. H.V. INDUSTRIAL ELECTRONICS PVT. LTD. v. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS.pdf

Judgment text

MIS. H. V. INDUSTRIAL ELECTRONICS PVT. LTD. v. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS JULY 20, 2006 [ASHOK BHAN AND MARKANDEY KATJU, JJ. ] Central Excise TariffAct, 1985-TariffHeading 85. 43 or 85. 36--"Power Controller" manufactured by assessee---Has individual functions as it does the function of controlling/regulating electric current/power in the circuit- It cannot be treated as an apparatus for making or protecting switching or making connections to or in electrical circuits-Hence, such machine/ apparatus would fall under Heading 85. 43 and not under Heading 85. 36. The question which arose for consideration in the present appeal is whether the machine/apparatus known as "Power Controller" manufactured by assessee is classifiable under Heading 85. 43 of the Central Excise Tariff Act, 1985 or under Heading 85. 36. Dismissing the appeals, the Court HELD: I. Heading 85.

36 covers electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits while Heading 85. 43 covers electrical machines or apparatus having individual functions not specified or included elsewhere in the Chapter. [732-C, DJ 2. The fact that tlie use of 'Power Controller' is to regulate the flow of electricity to the object in question, the same cannot be treated as an apparatus for making or protecting switching or making connections to or in electrical circuits. Its only function is to control the degree of illumination and outflow of heat, i. e. , it functions as a light dimmer and speed controller. The electrical appliances or apparatus under consideration has individual functions as it does the function of controlling/regulating the electric current/power so as to feed the required quantum of current to the other equipments connected to the circuits.

Its function is to provide a source of current variable at the option of the user to the load to which it is connected. Such machine or apparatus would fall under residuary entry 85. 43 and not under 85. 36. (732-D-GJ CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4436 of200 I. From the Order No. C-1/78-81/WZB/2001 dated IO. 1. 200 I ofthe Customs, ' Excise & Gold (Control) Appellate Tribunal, (West Zonal Bench) Mumbai in Appeal No. E/4705/95 SB (WR) (relevant Order pertaining to this Appeal being Order No. C-1180/WZB/200 I. WITH ·~ CA. Nos. 4439, 4337 and 4438 of2001. M. F. Humayunisa and Siddharth Dutta (for R. Nedumaran) for the Appellant. Gopal Subramanium, ASG, Harish Chandra, Asheesh Jain, B. K. Prasad and Manpreet Singh Doabia (for P. Parmeswaran) for the Respondent. The Judgment of the Court was delivered by BHAN, J.

The common question for consideration in these four appeals by the Commissioner of Central Excise & Customs, Aurangabad (for short "the respondent") is to the classification of"power controllers" manufactured by each of the four appellants to these appeals. The appellants inter alia are manufacturers of electrical goods namely, power controllers also known as Light Dimmers and Heat Controllers. Until June, I99 I, the appellants had classified the "power controllers" under Chapter 85, Sub-heading 8543. 00 under the Central Excise Tariff Act (for short "the Tariff Act"). With effect from 25. 07. 1. 991, the appellants started classifying "power controllers" under Sub-heading 8536. 90. The Department did not accept the classification list and issued show cause notices dated 1. 6. I992, 5. I 1. 1992, 3. 5. I993 and 4. IO. I993, respectively to the fourth respondent herein inter alia alleging that the correct classification ~ of the "power controllers" is under Sub-heading 8543.

00 and not under Subheading 8536. 90. Identical show cause notices proposing to deny the proposed classification by the appellant and confirm the classification earlier claimed and approved were issued, the notices also proposed recovery of duty short H. V. INDUSTRIAL ELECTRONICS PVT. LTD. "· COMMR. OFCENTR . COMMR. OFCENTRAL EXCISE & CUSTOMS[BHAN,J. j 733 Rejecting the contention of the assessee that the power controllers would not fall under Heading 85. 36, the Tribunal has recorded the following findings: "Both headings are a rep~oduction of respective headings in the Harmonized System of Nomenclature (HSN) and reference to the Explanatory Notes of that nomenclature in determining the scope of the coverage of these headings is justified. Heading 85. 36 speaks of Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits.

" Therefore, such apparatus which is intended solely or predominantly for any of these purposes, that would be classified under that heading. Electrical apparatus which are intended to perform other functions, and incorporating a switch, relay, fuse, or plug, cannot, solely by the fact of such incorporation, be considered to be apparatus for switching or protecting electrical circuits. Ifthat were to be the case, every apparatus that incorporates a switch or fuse or other item mentioned in the heading would be classifiable under that heading. Thus, transformers, electric lamps or television receivers incorporating a fuse or the fuse to protect against overload, or a switch to tum on the circuit would be classifiable not under headings 85. 04, 85. 39 or 85. 28 respectively but would be classifiable under heading 85. 36. The absurdity of this conclusion shows the unacceptability of the reasoning advanced in its support. It is clear that heading 85.

36 is for goods solely or essentially used for the purpose specified in that heading switching or protecting electric circuit, or making connection or any switch circuits. This article therefore cannot be classifiable under heading . ,.. 85. 36. " The Tribunal further examined the appropriateness of the classification claimed by the assessee under Heading 85. 43. It came to the conclusion that the electrical appliances or apparatus under consideration has individual functions as it does the function of controlling/regulating the electric current/ power so as to feed the required quantum of current to the other equipments connected to the circuits. Its function is to provide a source of current variable at the option of the user to the load to which it is connected. We agree with both the findings referred to above by the Tribunal. For the reasons stated above, we do not find any merit in this appeal and dismiss the same, leaving the parties to bear their own costs. - B. B. B.

Appeals dismissed.