Collr. of C. Ex. Vs. Dynaspede Integrated Systems P. - Court Judgment

Excerpt:
1. this is an appeal filed by the department against the order of collector (appeals), madras dated 11-4-1986.2. learned dr stated that the respondents were manufacturing speed drives mechanism. they had filed a classification list classifying the following products namely, (1) techogenerator assembly, (2) excitation coils and (3) eddy current clutches under t.i. 30d as parts of electric motors. the assistant collector of central excise, hosur vide his order-in-original no. v/68/3/87/84-vc, dated 28-11-1994 classified the above goods under t.i. 68. it was held by the assistant collector that the above products have varied applications and can be used in other than in the manufacture of electric motors. the function of the eddy current clutches is to regulate the speed. it is also being used in railways to regulate the speed of the ceiling fan. according to the assistant collector, the three products in question were not classifiable as parts of electric motors under t.i. no. 30d of the erstwhile central excise tariff. therefore he classified these goods under t.i. 68. the collector of central excise (appeals), however, mainly relied upon the submissions put forth in the appeal by the party that techogenerator assembly is part of eddy current drive. the assessee had stated that techogenerator assembly is a sub-assembly and cannot be used except as part of eddy current clutch, which in turn is part of electric motor.3. the assessee himself states that techogenerator assembly is part of an item which in turn is a part of electric motor. it is a part of eddy current clutch and it functions not only as variable speed drive but also has separate use in countless configuration application in a variety of ways. it also functions as speed transducer and as a position sensor in many applications. it is ideal for digital processing for the purpose of speed indication control and performs speed switching functions. therefore, this item is appropriately classifiable under tariff item no. 68.4. as regards excitation coils, this is a part of eddy current clutch.this eddy current clutch, apart from its applications in variable speed drives, can also be used as electro magnetic brakes and also used in railways to regulate the speed of the fan. hence, excitation coils forming part of eddy current clutch is also classifiable under tariff item 68. it is emphasised here that the party is clearing the above items separately without induction motors according to designs in which they are put to use in countless configuration applications. electric motor can very well function without the above items. in the trade parlance, the items are not sold or known as part of electric motor.techogenerator, excitation coils and eddy current clutches are not essential parts of electric motors. further it is observed from the technical opinion, obtained that eddy current clutches, excitation coils and techogenerator assembly are used as accessories for a.c.motor variable speed. without this, a.c. motor can run at constant speed. these accessories are required for varying the speed. hence, it is only an attachment to the motor. it is not part of the motor. since these are not parts of electric motor, they are to be classified under t.i. 68 only. further, the appellant has not disputed the fact that the products have varied industrial applications.6. we have considered the above submissions. we observe that the catalogue filed by the respondents themselves indicates as follows : 7. wer's eddy current, adjustable speed drives are in use thousands of industrial applications where constant torque over a broad speed range is required. (a) fan drives for boiler draft, cement mill ventilating, air conditioning, drying and many other fan and blower applications. (b) centrifugal pumps for sewage waterworks, boiler feed, condensate and circulating water, paper mill pump applications such as cooling, steam generating, liquor pumps, stock pumps, washers and waste aeration. (c) centrifugal compressors for process control, air liquification or air conditioning. (d) constant torque loads - the wer eddy current drives has higher heat dissipation capability than competitive units, therefore, the wer drive is ideal for any application where a shaft must be turned and the speed be adjustable over a broad speed range, regardless of the type of load. (e) frequency changes and stabilizers - the wer eddy current drive can be coupled between the drive motor which would be an a.c. motor, diesel or gasoline engine and generators to regulate speed for applications such as : (5) driving alternators to provide variable frequency over a broad speed range for varying the speed of synchronous a.c. motors.9. there is no doubt or dispute that eddi drives in question have built-in techometer generator. there is also no doubt or dispute that excitation coil is a part of the eddi current drive and there is also no doubt or dispute that the eddi current clutch is coupled with an electric motor (induction motor) and to that extent, the respondents are right. however, the issue before us is different. the department's contention that the respondents are clearing the three items in question separately without induction motors, according to the designs to which they are put to use in different configuration applications has not been denied or shown to be wrong. in face of this fact, the pamphlet of the catalogue of magnetek mod 7 eddy current adjustable speed drives which incorporates a sectional view of the machine and indicates that it has a built-in techometer generator does not help the respondents. we are concerned with the items in the form in which they are presented for assessment at the time of clearance. once, therefore, these items are being cleared as such for further use in variety of applications and only one of such applications is their use in eddy current drives for electric motors (apart from other applications), it cannot be said that they are primarily or principally used or meant to be used as essential part of electric motors; they can only be classified under t.i. 68.10. therefore, we set aside the order of the collector (appeals) and restore the order-in-original.

Judgment:
1. This is an appeal filed by the Department against the order of Collector (Appeals), Madras dated 11-4-1986.

2. Learned DR stated that the respondents were manufacturing speed drives mechanism. They had filed a classification list classifying the following products namely, (1) Techogenerator assembly, (2) Excitation coils and (3) Eddy current clutches under T.I. 30D as parts of electric motors. The Assistant Collector of Central Excise, Hosur vide his Order-in-Original No. V/68/3/87/84-VC, dated 28-11-1994 classified the above goods under T.I. 68. It was held by the Assistant Collector that the above products have varied applications and can be used in other than in the manufacture of electric motors. The function of the Eddy current clutches is to regulate the speed. It is also being used in railways to regulate the speed of the ceiling fan. According to the Assistant Collector, the three products in question were not classifiable as parts of electric motors under T.I. No. 30D of the erstwhile Central Excise Tariff. Therefore he classified these goods under T.I. 68. The Collector of Central Excise (Appeals), however, mainly relied upon the submissions put forth in the appeal by the party that Techogenerator assembly is part of Eddy current drive. The assessee had stated that Techogenerator assembly is a sub-assembly and cannot be used except as part of Eddy current clutch, which in turn is part of Electric Motor.

3. The assessee himself states that Techogenerator assembly is part of an item which in turn is a part of electric motor. It is a part of Eddy current clutch and it functions not only as variable speed drive but also has separate use in countless configuration application in a variety of ways. It also functions as speed transducer and as a position sensor in many applications. It is ideal for digital processing for the purpose of speed indication control and performs speed switching functions. Therefore, this item is appropriately classifiable under Tariff Item No. 68.

4. As regards Excitation coils, this is a part of Eddy current clutch.

This Eddy current clutch, apart from its applications in variable speed drives, can also be used as Electro Magnetic Brakes and also used in Railways to regulate the speed of the fan. Hence, excitation coils forming part of Eddy current clutch is also classifiable under Tariff Item 68. It is emphasised here that the party is clearing the above items separately without induction motors according to designs in which they are put to use in countless configuration applications. Electric motor can very well function without the above items. In the trade parlance, the items are not sold or known as part of electric motor.

Techogenerator, Excitation coils and Eddy current clutches are not essential parts of electric motors. Further it is observed from the technical opinion, obtained that Eddy current clutches, Excitation coils and Techogenerator assembly are used as accessories for A.C.motor variable speed. Without this, A.C. motor can run at constant speed. These accessories are required for varying the speed. Hence, it is only an attachment to the motor. It is not part of the motor. Since these are not parts of electric motor, they are to be classified under T.I. 68 only. Further, the appellant has not disputed the fact that the products have varied industrial applications.

6. We have considered the above submissions. We observe that the catalogue filed by the respondents themselves indicates as follows : 7. WER's eddy current, adjustable speed drives are in use thousands of industrial applications where constant torque over a broad speed range is required.

(a) Fan drives for boiler draft, cement mill ventilating, air conditioning, drying and many other fan and blower applications.

(b) Centrifugal pumps for sewage waterworks, boiler feed, condensate and circulating water, paper mill pump applications such as cooling, steam generating, liquor pumps, stock pumps, washers and waste aeration.

(c) Centrifugal compressors for process control, air liquification or air conditioning.

(d) Constant torque loads - the WER eddy current drives has higher heat dissipation capability than competitive units, therefore, the WER drive is ideal for any application where a shaft must be turned and the speed be adjustable over a broad speed range, regardless of the type of load.

(e) Frequency changes and stabilizers - the WER eddy current drive can be coupled between the drive motor which would be an A.C. motor, diesel or gasoline engine and generators to regulate speed for applications such as : (5) Driving alternators to provide variable frequency over a broad speed range for varying the speed of synchronous A.C. motors.

9. There is no doubt or dispute that eddi drives in question have built-in techometer generator. There is also no doubt or dispute that excitation coil is a part of the eddi current drive and there is also no doubt or dispute that the eddi current clutch is coupled with an electric motor (induction motor) and to that extent, the respondents are right. However, the issue before us is different. The Department's contention that the respondents are clearing the three items in question separately without induction motors, according to the designs to which they are put to use in different configuration applications has not been denied or shown to be wrong. In face of this fact, the pamphlet of the catalogue of MagneTek MOD 7 Eddy Current Adjustable Speed Drives which incorporates a sectional view of the machine and indicates that it has a built-in techometer generator does not help the respondents. We are concerned with the items in the form in which they are presented for assessment at the time of clearance. Once, therefore, these items are being cleared as such for further use in variety of applications and only one of such applications is their use in Eddy Current drives for electric motors (apart from other applications), it cannot be said that they are primarily or principally used or meant to be used as essential part of electric motors; they can only be classified under T.I. 68.

10. Therefore, we set aside the order of the Collector (Appeals) and restore the order-in-original.