LUMINOUS ELECTRONICS Vs. CCE, NEW DELHI

JUDGEMENT

(1.) Appellants are engaged in the manufacture of Uninterrupted Power Supply System (hereinafter referred to as UPSS) falling under Chapter 85 of the Central Excise Tariff Act, 1985. They filed declaration with effect from 1.5.95 under Rule 173B of the Central Excise Rules claiming classification of UPSS under Chapter Heading 85.04 attracting central excise duty at the rate of 10% ad valorem. Three show cause notices were issued demanding differential duty of Rs. 3,78,598 stated to be short paid during the period from July 1995 to June 1996 by classifying the product under sub -heading 8543. The assessee contended that UPSS is an equipment used to convert electrical energy of uninterrupted electrical energy by maintaining frequency as well as voltages. The adjudicating authority frequency as well as voltages. The adjudicating authority observed that UPSS has individual function and is not specifically included elsewhere in Chapter 85 of the Central Excise Tariff, relying on the judgment of the Tribunal in J.K.Synthetics Vs. Collector of Customs, Jaipur 1995 (80) ELT 208. In this view the adjudicating authority confirmed the demand made in the show cause notices. That order was challenged in appeal by the assessee. Appellate Commissioner by Order -in -Appeal No.704 -Ce/DLH/2000 dated 16.8.2000 dismissed the appeal relying on the Larger Bench decision of this Tribunal in Tata Libert ltd. and Ors. 1999 (35) RLT 933. Thus, the UPSS, according to the Department, is classifiable under tarif sub -heading 8543 and not under 8504, as contended by the appellant.

(2.) Along with the appeal, appellant moved application for waiving the condition of pre -deposit required by Section 35F of the Central Excise Act. When that stay application was ordered as per Stay Order No.1/2001 -B dated 3.1.2001, Bench doubted the correctness of the decision rendered by a Larger Bench of three Member of this Tribunal in Tata Libert Ltd. Vs. CCE, Mumbai 1999 (35) RLT 933. Consequently, this matter has come up before this larger Bench of 5 Members.

(3.) Before proceeding with the issue we think it worthwhile to consider the true function of Uninterrupted Power Supply System (UPSS). Uninterruptible power system as per modern Dictionary of Electronics authored by Rudolf F. Graf, Sixth Edition, means "A solid state power conversion system to provide regulated AC power to critical loads". In other words, the system provides uninterrupted power even during brownouts and blackouts. Brownouts are situation where voltage falls much below the required standard and blackouts mean breakdown of supply. Standard Handbook for Electrical Engineers authored by Donald G. Fink and H.Wayne Beaty, Twelfth Edition, states that the heart of the Uninterruptible power supply system is the rectifier -inverter unit called module. Its function is to accept AC line power and deliver transient -free AC power to the critical load. Thus it can be seen that UPSS should have rectifier -inverter unit. A Static Inverter, according to McGraw -Hill Dictionary of Science and Technical terms 5th Edition means a device that converts a DC voltage to a stable AC Voltage for use in an uninterruptible power system. The same book describes Converter as a device for changing alternating current to direct current or direct current to alternating current. Further, McGraw -Hill Encyclopedia of Science and Technology 5th Edition, states that uninterruptible power system may be used on -line between the commercial power and the sensitive load to provide transient -free well -regulated power. From these technical book it is crystal clear that UPSS are intended to provide regulated output power regardless of the condition of the input power source including total power failure. In other words, the function of this equipment is to supply regulated outputs.