Judgment:
1. Revenue is aggrieved with the Order-in-Appeal No. C. Cus. 283/98 despatched on 1-4-98 by which the Id. Commissioner (Appeals) has upheld the importer's plea to classify "Ultrasonic Washing Machine" under sub-heading No. 8479.81 of the Customs Tariff Act with description "for treating metal, including electric wire coil-winders". Revenue seeks for classification of the item under residuary heading "other" under sub-heading 8479.89 of the Customs Tariff Act. The machine uses the technology of the ultrasonic sound for the purpose of washing ball bearings. It consists of demagnetzing unit, ultrasonic chamber and jet cleaning system, the essential elements of this being the Generator or Power supply Transducer, Processing tank. As per the technical details, which were placed before the Commissioner, it was seen that the items Ultrasonic cleaning is the latest technology adopted for the bearing cleaning all over the world, as the removal of foreign particles by forced cleaning/brush clearing cannot reach inside the component and still some amount of dirt particles will be retained. It was also noticed that the item, besides this function, was also carrying out an important function of demagnetizing the component. The write up produced on the item states as follows :- Anti-friction Rolling Bearing consists mainly of four basic components viz. Inner ring, Outer ring, rolling elements and cages.
In this the rolling elements are produced in batches and cages are manufactured out of sheet steel through Gang die with transfer machanism. Inner and outer rings of rolling bearings are manufactured by individual processing after forging like Turning, Grinding, Superfinishing etc.
It is essential for a rolling bearing to operate with less noise which can be achieved through high precision grinding, superfinishing and good cleaning. The grinding operation involves removal of material of about 0.5 mm (500 microns) with the help of grinding wheels which are made of small grits of abrasives bonded together with the help of suitable bonding material and formed as a wheel. The components viz. Inner rings and outer rings are held in the work holding device with the help of magnetic induction and in the process of grinding the component being ground would attain some amount of magnetism retention and some amount of metallic particles/abrasives will stick to the component as now they are having magnetism.
Similarly after the grinding, the superfinishing process involves a material removal of about 5 to 10 microns. This is done with the aid of superfinish-ing/honing stones/sticks which are made of fine abrasives formed as stones with bonding material.
The iron particles will stick with the components and then due to the abrasion involved in the surfaces becomes dust and paste is also formed. This cannot be normally removed, until a forced cleaning like brush cleaning or ultrasonic cleaning is done.
If these foreign particles are not removed from the rings, the dirt particles will distrupt the lubricating produce noise. Solid foreign particles lead to running noise, wear and premature failure. Hard particles in rolling bearings cause abrasive wear, particularly in contact areas with a high rate of sliding friction. Wear even occurs with extremely small particles. Cycling of larger particles (in the order of 0.1 mm) causes indentations in the raceways. The greater the hardness of the cycled particles (e.g. filedust, grinding chips, mould sand, corundum) and the smaller the bearings, the shorter the life.
The ultrasonic washing machine Karl Roll Model SK 03428 consists of a demagnetising unit, ultrasonic chamber and jet cleaning system.
All are connected together with in-built conveyors. In the demagnetising unit, the rings are stacked and they are lifted upwards. When it is lifted upwards, a demagnetiser kept behind the component holder, demagnetises the component. The ring is then passed to the ultrasonic chamber where the washing media, mineral turnpentine is stored. The transducers create the ultrasound waves which makes the particles to get loosened. After this, the ring is taken up to jet cleaning system, where mineral turpentine oil is poured with a huge amount of pressure through nozzles/jets. Then the rings are free from magnetism and foreign particles.
Ultrasonic cleaning is the latest technology adopted for the bearing components cleaning all over the world, as the removal of foreign particles by forced clearing/brush cleaning cannot reach inside the component and still some amount of dirt particles will be retained." 2. Further examination of the entire manufacturing activity through Flow Process Chart of the item in question which has been placed before us to show that inner and outer rings are made free of foreign particles, then the process of demagnetizing takes places. Thereafter the process of ultrasonic cleaning is done besides the jet washing and thoroughly cleaned inner and outer rings. This is carried out for the following three purposes :- (1) As preparation for a process such as plating, painting or bonding.
(2) When a high degree of cleanliness is essential to make the article attractive.
(3) When contaminants must be removed to prevent subsequent malfunction or undue wear.
3. The function of each of the item which is there in the ultrasonic cleaning system viz. (a) generator or power supply (b) transducer (c) processing tank has been brought out in the write up which is noted herein below :- The generator converts the mains electrical energy of 50 c/s to an Ultrasonic energy of 22KHz/40KHz.
It consists of a piezoelectric crystal which, converts electrical energy into mechanical energy.
This contains the cleaning liquid and the articles to be cleaned are immersed in it. The transducers are either fitted to sides or bottom of the tank as called for by the application, If the above set-up for transducers is not desired, then transducers mounted in liquid-proof housings suitable for immersion in the cleaning liquid could be provided. These are called immersible transducers.
The generator converts the mains frequency into an Ultrasonic frequency which is converted into a mechanical energy by the transducer. The transducer transfers this mechanical energy to the bottom of the tank which in turn transfers the energy to the cleaning liquid inside the tank.
Ultrasonic energy produces a number of effects in liquids but the following three of these are of particular significance in Ultrasonic Cleaning.
(1) Streaming (2) Degassing (3) Cavitation Streaming : When the bottom of the tank vibrates it produces a unidirectional force in the fluid with which it is in contact. This results in a flow or streaming notion of liquid away from the transducer surface.
Streaming is useful because it assists, in dispersing loosened contaminants and also brings a continuous supply of fresh cleaning liquid to the surface of the article being cleaned.
Degassing : Most liquids contain dissolved or entrapped gas. To achieve efficient Ultrasonic Cleaning.
Cavitation : A wave usually travels with rarefactions and compressions. When the Ultrasonic wave travels through the liquid it causes rarefactions and compressions in the liquid 22000/40000 times a second. This causes formation of bubbles during the rarefaction phase and collapsing of the bubbles during the compression phase of the ultrasonic wave. This process of formation and collapsing of the bubbles is known as cavitation.
From theoretical calculations it has been estimated that a pressure of more than 350 NM/m2 and a temperature greater than 5500C is created when a bubble collapses. This energy though small is released from a single bubble. Millions of bubbles collapse every second, the collective energy of all these bubbles is powerful enough to blast off the contaminant from the surface no matter how tightly bonded. It is for this reason Ultrasonics can clean small holes, crevices and inaccessible areas. Cavitation also accelerates chemical reactions which helps in dissolving the contaminants.
The intensity of cavitation depends on a number of physical properties of the liquid but the three main requirements for good cavitation are : (a) High surface tension (b) Low vapoure pressure and (c) Low viscosity.
Ralsonics Ultrasonic Cleaning System is completely solid state mains operated instrument inclusive of fans for forced air cooling of the electronic components. A separate/inbuilt transducerised stainless tank complete with connecting coaxial cable between the tank and generator. The generator is controlled by a simple ON/OFF switch.
The pilot lamp indicates whether the unit is ON or OFF Mains fuse for overload protection is provided.
The transducer is basically a lead-nirconate-titanate rings and sandwiched between two metallic blocks. When .........
The ultrasonic washing machine Karl Roll Model SK 03428 consists of a demagnetising unit, ultrasonic chamber and jet cleaning system.
All are connected together with in-built conveyors. In the demagnetising unit, the rings are stacked and they are lifted upwards. When it is lifted upwards, a demag-netiser kept behind the component holder, demagnetises the component. The ring is then passed to the ultrasonic chamber where the washing media, mineral turnpentine is stored. The transducers create the ultrasound waves which makes the particles to get loosened. After this, the ring is taken up to jet cleaning system, where mineral turpentine oil is poured with a huge amount of pressure through nozzles/jets. Then the rings are free from magnetism and foreign particles.
Ultrasonic cleaning is the latest technology adopted for the bearing components cleaning all over the world, as the removal of foreign particles by forced clearing/brush cleaning cannot reach inside the component and still some amount of dirt particles will be retained." 4. Ld. Commissioner on examination of the material noted that the goods are specifically mentioned at SI. No. 124 under "Miscellaneous machinery" category of HSN notes (page 1318). However, he noted that there is no material in the HSN suggesting its classification of the item under Heading 8479.89. He noted that in the Customs Tariff, the machineries have been put under nine sub-headings whereas under HSN, these have been put under three broad categories implying catagorization as made under Customs Tariff Act has not been contemplated when detailing the different kinds of machinery under T.H.84.79 in the HSN notes. He has noted that in the instant case, going by the scheme of sub-classification of the machinery under CTH 84.79 of the CTA 1975, what is to be verified is not the construction/composition of the machinery, but its usage/function. The Commissioner has noted that the impugned goods are used for treating, by way of cleaning, ball bearings which are metallic items. Hence, he has upheld the plea for classifying the item under Customs Tariff sub-heading 8479.81 which specifically covers "machinery for treating metal". He has noted the Apex Court's judgment rendered in the case of Bharat Forge & Press Industries (P) Ltd., 1990 (45) E.L.T. 525 (S.C.) which lays down the principle for classifying under the residuary entry and observed "under a residuary entry only such goods are covered which cannot be brought under the various specific entries in the tariff. In other words, unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item".
The above findings are challenged in the appeal.
5. Ld. SDK reiterated the grounds and the write up sent by the department. It is the department's case that the item cannot be treated for classifying under "other machines for treating metal, including electric wire, coil-winders". It is their simple contention that the item is used for removal of dirt and dust from the components of bearing of inner and outer rings and therefore classification under residuary heading "other" is justified.
6. We have heard Id. Counsel, Shri S.S. Radhakrishnan who relied on the item under HSN and on the Apex Court's judgment pertaining to the adoption of residuary heading only if the items are not classifiable under a specific heading as laid down in Bharat Forge & Press Inds. (P) Ltd. (supra). Specific attention was drawn to the judgment of the Tribunal rendered in the case of CC v. Escorts Ltd. 1991 (54) E.L.T.144 wherein the very item ultrasonic cleaning machine used for cleaning parts/components of Ultrasonic waves thereby to improve their functioning was classified under erstwhile tariff under Heading 84.59(1) with description "machines and mechanical appliances/ having individual functions/ not falling within any other Heading of this Chapter: (2) Machines and mechanical appliances designed for the production of a commodity/ machinery for treating metals, wood or similar materials, for stripping and cutting of tobacco leaf or for cutting or rolling tea leaves; machines for mounting card clothing; nuclear reactors".
7. The Tribunal after due consideration rejected the Revenue's appeal by upholding the contention that the item is required to be classified under sub-heading 84.59(2) as per the finding recorded in Paras 7 to 8 as noted herein below :- "7. The submissions made are considered. The machine imported is an 'Ultrasonic Cleaning Machine'. The functions of the machine have already been high-lighted in the appeal, and that its purpose is for cleaning and washing the components. The catalogue has not been produced, but the original order has outlined the functioning as :- "Components are first put into a dipping tank where alkali solution is circulated at a temperature of about 50 - 60C. After this, components are put to second tank viz. Ultrasonic Cleaning Tank.
Here again alkali solution is circulated but in addition ultrasonic generator sends ultrasonic waves. These waves in turn create vibrating sensation in the liquid. The alkali solution attacks the component at ultrasonic frequency and in the process cleans the surface of the component. Thereafter, these components are cleaned in a water tank at normal temperature etc." The classification under Chapter Heading 84.59 is not in dispute.
The dispute is only whether it should go under 84.59(1) or 84.59(2).
The CCN Compendium of Classification opinions clearly classified the machine under 84.59, opinion is extracted :- "Ultrasonic apparatus : for cleaning metal parts and miscellaneous other articles; consisting when complete (whether mounted in a common housing or as separate units) of a high frequency generator, one or several transducers and a tank for the articles to be cleaned, imported either complete without the tank." The Heading 84.59(1) is a residuary item and 84.59(2) is for machines and mechanical appliances designed for the production of a commodity, machinery for treating metals etc. The various examples of machinery used in various industries as given in the CCCN Explanatory Notes under Heading 84.59 indicates that such machines like purifying oil, washing, scouring and removing dust in the perspective fields are stated as for use in the production of commodities. The process of cleaning and washing of the part to remove the dirt and foreign material for smooth functioning of the parts and components, by the Ultrasonic Machine should be regarded as being in the production line. The citations referred to by the Id. Consultant are found to be adopting the same line of thinking.
In effect, therefore, the machine can be considered as designed for production of a commodity as it improves the functioning of the parts/components by cleaning, which is found to be an essential requirement for fitment of the components /parts to the motorcycle engines manufactured by them and its classification under Heading 84.59(2) is appropriate.
8. The appeal fifed by the Revenue having no merits is therefore rejected. The Cross Objection filed by the Respondent is also disposed of." The above finding of the Tribunal has been confirmed by the Apex Court as reported in 1997 (96) E.L.T. 504.
8. We have carefully considered the submissions made by the Revenue in the written submissions and the grounds and also perused the entire material of the case including the technical write-up and HSN notes.
The Revenue intends to classify the item under residuary heading "other" against a specific heading with sub-heading 84/9.81 with description "for treating metal including electric wire, coil-winders".
The write-up and the process carried out clearly indicates that for the purpose of manufacturing ball bearing. The process carried out by this machine is an essential activity. It has to be ultrasonic cleaning to make the item functional as well as to demagnetize the same. The write-up given clearly shows that the ball bearing cannot come into existence for its effective function unless this process is carried out and this process is not merely a cleaning process but a process of manufacture. Therefore, the finding arrived at by the Commissioner (A) to consider the item as falling under the description Chapter heading 8479.81 of the Customs Tariff Act cannot be faulted. Further, the residuary heading cannot be accepted unless the specific heading is excluded. In the present case, a specific heading cannot be excluded at all and therefore reliance by the Commissioner (Appeals) on the Apex Court judgment rendered in Bharat Forge & Press Industries (P) Ltd. (supra) is justified.
9. Further, we notice that from the Tribunal judgment rendered in the case of CC v. Escorts Ltd. (supra) which has since been confirmed by the Apex Court that the function of the ultrasonic cleaning machine used for cleaning the part/component by the ultrasonic waves has been examined and the Tribunal has clearly held that process of cleaning and washing of the parts to remove the dirt and foreign material for smooth functioning of the parts and components by the ultrasonic machine should be regarded as being in the production line. This judgment answers the plea of the Revenue that mere cleaning function cannot be considered as "for treating metal". The item is clearly classifiable under Heading 8479.81 in terms of technical write-up and the judgment rendered by the Tribunal in the case of CC v. Escorts Ltd. (supra).
Further, the item is not merely carrying out the function of cleaning but is also performing other important functions of demagnetizing etc.
as noted which is an essential process for completion for bringing into production the final product in question. Therefore, there is no merit in this appeal and same is rejected.