EMCO TRANSFORMERS Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE Revision Application dated 29 -7 -1978 against order -in -Appeal No. S/49 -770/77 A dated 19 -1 -1978 passed by the Appellate Collector of Customs, Bombay has been transferred by the Government of India to the Tribunal for disposal in terms of Sec. 131B(2) of the Customs Act, 1962.

(2.) FOUR consignments of Transformer Bushings were imported under Bills of Entry Nos. 2538/100 dated 28 -2 -1977, 2668/30 and 32 dated 7 -3 -1977 and 2668/31 dated 7 -3 -1977 which were assessed to duty under Heading 85.18/27(1). A claim for assessment under Heading 85.01 (1) as components of Transformers of 400 volts or alternatively under heading 85.18/27 (1) (presumably (7)), as they are used on transformers which, in turn, are used for transmission of electricity both at the point of generation and point of use and are thus integral parts of transmission system, was rejected by the Asst. Collector of Customs, on the ground that insulators are specifically mentioned under heading 85.18/27 and the question of classifying the bushing (which is an insulator), does not arise. The choice is between sub -heading (1) and sub -heading (7) of the main heading 85.18/27. The latter is restricted to insulator which are used in transmission systems and the bushings are meant for the transformer which is an independent equipment, hence sub -item (1) would be appropriate. The Appellate Collector held that the electrical bushing in question cannot be used on transmission lines which require a different type of insulator. These insulators are also not component parts o f transformers as they are not part and parcel of the transformer but are used by being mounted on the transformer. They are basically insulators for high voltage circuit breakers and can find used both for transmission as also for receiving and distribution of current. They are correctly assessable to duty as part of high voltage circuit breakers under item 85.18/27(1). He, therefore, rejected the appeal.

(3.) THE appellants now state that they are manufacturers of electric transformers and had imported these consignments of transformer bushings for use as component parts of their 66KV and above transformers. The bushings were assessed under heading 85.18/27 (1) and also to c.v.d. under item 23B(4). They have claimed assessment under heading 85.01 as component parts of electric transformers whose rated in -put voltage is over 400 volts or in the alternative No. 85.18/27(7) as insulators designed for use in an electric transmission of 400 volts and above. The Appellate Collector failed to appreciate that these transformer bushings of 145 KV are basically component parts of transformers of 66 KV above and are definitely not insulators for high voltage circuit breakers. This is supported by the fact that they are catalogued by the manufacturers as transformer bushings. They are known as such in the trade also. The various Electricity Boards insist that transformers will be supplied with bushings as terminal arrangements. Even high voltage transformers supplied by foreign manufacturers are equipped with transformer bushings and a photograph of one such transformer, imported by them, from the same supplier of the bushings in Sweden, is enclosed. The ISS 2026 also clearly specified transformer bushings for transformers and stipulates the standards for such bushing. Appendix 44 to the ITC. Policy Vol. I 77 -78 permits "Bushings above 66 KV" as components of power transformers. The construction and design of the bushings, as may be seen from the catalogue, not only indicate that it is meant for mounting on the transformer as its component and is not a part of a circuit breaker is misunderstood by the Appellate Collector but also shows that it is an article which, if produced in India, would not attract excise duty under item 23B but under item 68 of the Tariff. Levy of c.v.d. as chinaware or porcelainware all sorts, is therefore, not fair and reasonable. They would, therefore, claim that the c.v.d. on the transformer bushings is also refundable.