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CASE NO.: Appeal (civil)  151 of 2002

PETITIONER: M/s Sterlite Industries (India) Ltd

RESPONDENT: Commissioner of Customs, Chennai

DATE OF JUDGMENT: 19/03/2007

BENCH: S. H. Kapadia & B. Sudershan Reddy

JUDGMENT: J U D G M E N T

KAPADIA, J.

       This civil appeal has been filed by M/s Sterlite Industries  (India) Ltd. under section 130E of the Customs Act, 1962  against Order No. 1113 of 2001 passed by CEGAT ("the  Tribunal") on 13.7.2001.

       The short question which arises for determination in this  civil appeal is whether Fully Automated Sequential X-ray  Spectrometer is an apparatus based on the use of X-ray under  sub-heading 9022.19 as claimed by the Department or  whether the said apparatus is classifiable as Spectrometer  under sub-heading 9027.30 being an apparatus for physical  or chemical analysis.  

       To decide the above question, we quote hereinbelow the  following Heading of Chapter 90 of the Customs Tariff Act,  1975 which reads as under: "CHAPTER 90 OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC,  MEASURING, CHECKING, PRECISION, MEDICAL OR  SURGICAL INSTRUMENT AND APPARATUS; PARTS AND  ACCESSORIES THEREOF \026

Tariff  Item Description of goods   Rate of duty Std.       Prefnl. 9022 Apparatus based on the  use of X-rays or of  alpha, beta or gamma  radiations, whether or  not for medical,  surgical, dental or  veterinary uses,  including radiography  or radiotherapy  apparatus, X-ray tubes  and other X-ray  generators, high tension  generators, control  panels and desks,  screens, examination or  treatment tables, chairs

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and the like.

-Apparatus based on  the use of X-rays,  whether or not for  medical, surgical,  dental or veterinary  uses, including  radiography or  radiotheraphy  apparatus:

9022.12 --Computed  tomography apparatus

30% .. 9022.13 --Other, for dental uses

30% .. 9022.14 --Other, for medical,  surgical or veterinary  uses

30% .. 9022.19 --For other uses -Apparatus based on  the use of alpha, beta  or gamma radiation,  whether or not for  medical, surgical,  dental or veterinary  uses, including  radiography or  radiotherapy apparatus:

50% .. 9022.21 --For medical, surgical,  dental or veterinary  uses

30% .. 9022.29 --For other uses

50% .. 9022.30 -X-ray tubes 50% .. 9022.90 -Other, including parts  and accessories

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50% .. Xxx                  Xxx

 Xxx

9027 Instruments and  apparatus for physical  or chemical analysis  (for example,  polarimeters,  refractometers,  spectrometers, gas or  smoke analysis  apparatus);  instruments and  apparatus for  measuring or checking  viscosity, porosity,  expansion, surface  tension or the like;  instruments and  apparatus for  measuring or checking  quantities of heat,  sound or light  (including exposure  meters); microtomes

9027.10 -Gas or smoke analysis  apparatus

25% .. 9027.20 -Chromatographs and  electrophoresis  instruments

25% .. 9027.30 Spectrometers,  spectrophotometers and  spectrographs using  optical radiations (UV,  visible, IR)

25% .. 9027.40 -Exposure meters

25% .. 9027.50 -Other instruments and  apparatus using optical  radiations (UV, visible,

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IR)

25% .. 9027.80 -Other instruments and  apparatus

25% .. 9027.90 -Microtomes; parts and  accessories"

25% ..

       The assessee imported Fully Automated Sequential X-ray  Spectrometer from M/s Rigaku International Corporation,  Japan. The said equipment is used by the assessee in its plant  at Tuticorin. The said Spectrometer was imported for analyzing  various alloys in the manufacture of Cathodes. The assessee  filed its Bill of Entry for home consumption. They claimed  assessment under sub-heading 9027.00. They claimed the  benefit of partial exemption Notification No. 46/96-Cus dated  23.7.1996. They paid customs duty (basic at 25% plus 10%  additional customs duty). The Department, however, assessed  the above apparatus under sub-heading 9022.19, quoted  above, read with the above notification and charged customs  duty (basic) at 50% ad valorem plus 10% additional customs  duty.

       Basically, according to the Department, Spectrometer in  the present case was X-ray based Spectrometer and, therefore,  the same was classifiable in sub-heading 9022.19. According  to the Department, X-ray based apparatus stood covered  under section XVIII of HSN also and, therefore, the goods were  classifiable under sub-heading 9022.19.

       According to the assessee, in the present case, the  Spectrometer in question is specifically named in sub-heading  9027.30. According to the assessee, the Department had erred  in placing reliance on HSN when the Customs Tariff Act, 1975  has specifically laid down Rules of interpretation. According to  the assessee, Rule 3(a) of the Rules of Interpretation was  applicable which says that the heading which provides a  specific description shall be preferred to headings which  provide general description. According to the assessee, under  Heading 90.27 the above item Spectrometer has been  mentioned without any qualification regarding the source  material and, therefore, the Spectrometer is based on optical  source, the X-ray source was immaterial as Spectrometer per  se was classifiable under sub-heading 9027.30. Before us, the  assessee submitted, in the alternative, for the first time, that  the above Fully Automated Sequential X-ray Spectrometer  could fall under sub-heading 9027.80 as Special Apparatus.

       We have gone through the literature/ brochure  concerning Fully Automated Sequential X-ray Spectrometer.  We find from the brochure that the above System which is  imported by the assessee is multi-functional. It has an inbuilt  software. It has an inbuilt automatic analysis program. It is  the software in the System which makes the system carry out  multi-purpose functions. The computer processes the data.

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The configurations are also specified in the assembly of the  Spectrometer. Prima facie it appears that there is an inbuilt  computer system in the Spectrometer. That computer appears  to be an essential part of direct reading. These aspects have  not been considered by the authorities below. The catalogue/  brochure produced indicates that the Spectrometer in  question would be non-functional without the computer.  Modern direct reading Spectrometer incorporates a computer  in the System so that they can measure, process and analyse  the data. The catalogue shows the configurations which  indicate prima facie that the computer stands integrated with  the Spectrometer. The catalogue indicates the type of  apparatus. The catalogue shows inclusion of software  programmes and computer. The catalogue shows that the  Spectrometer is so designed that it functions in an integrated  manner along with the computer and can be operated and  controlled only with such computer. None of these aspects had  been considered by the authorities below including the  Tribunal. Hence, we remit the matter to the Tribunal to decide  the matter de novo after examining the catalogue annexed as  Annexure-B in its records. Before concluding, we may mention  that our above opinion should not be treated as conclusive.  The Tribunal can also consider the alternative submission of  the assessee, namely, that the above item can fall also within  sub-heading 9027.80. In this regard we express no opinion.

       For the above reasons, the impugned order dated  13.7.2001 of the Tribunal (CEGAT) is set aside and the matter  is remitted to the Tribunal for its fresh decision in accordance  with law after examining the catalogue annexed in its record.  This appeal is accordingly allowed with no order as to  costs.