Acc Babcock Limited Vs. Collector of Customs - Court Judgment

Excerpt:
1. acc babcock ltd. had filed a revision application to the additional secretary, government of india being aggrieved from order-in-appeal no.cal-cus-618/1982, dated 20th march, 1982 passed by the appellate collector of customs, calcutta. the said revision application stands transferred to the tribunal in terms of the provisions of section 131b of the customs act, 1962 to be disposed of as an appeal.2. briefly the facts of the case are that m/s. acc babcock ltd., durgapur had imported a consignment of 'glove valves' valued at rs. 32,846/- cif and claimed assessment thereof, under heading 84.61 (2) as 'isolating valves'. in support of their contention that those were isolating valves they produced a photo copy of leaflet of forged steel parallel slide valves, forged steel high pressure and high temperature parallel slide valves, forged steel globe stop and check valves as well as a sheet of schedule no. vm/8ref-ced/av3/cv, dated 25-9-1980 and stated that ail the categories of valves referred to in the leaflets had been recommended for the isolation of medium of high pressure line in the process and power generation industries. it was also argued that this isolation function of the valve was not only for the forged steel parallel slide valves but also for forged steel parallel slide valves and forged steel globe stop and check valves. they argued that since the function of the globe valve was to isolate a particular boiler mounting or instrument installed down stream of it, these valves were nothing but isolating valves and are accordingly assessable under heading 84.61(2) of customs tariff act, 1975. the learned assistant collector had rejected the appellant's claim for assessment under heading 84.61(2) and had held that globe valves are to be assessed under heading 84.61 (1) of customs tariff act, 1975 as valves nes.being aggrieved from the aforesaid order the appellants had filed an appeal to the appellate collector of customs. before the appellate collector the appellants had tried to distinguish between isolating valves, regulating valves and control valves. they had submitted that the function of an isolating valve was to isolate adjoining mounting/instrument/equipment installed down-stream of it. its function is to open or close communication of a fluid or to prevent discharge of the fluid from one pipe lince into another. it is different from a regulating valve, which literally regulates the flow of a fluid in graded amount as desired, whereas the isolating valve can either be fully opened or totally shut without any intermediate openings. control valve, on the other hand, control the flow of fluid to the desired amount, usually automatically, operated pneumatically. in support of their contention that those were 'isolating valves, they had submitted a catalogue of okano valve manufacturing company. the learned appellate collector had observed that there was nothing on record to show that the valves were of okano make or having their registred trade mark. the catalogue submitted by the appellants showed different kinds of globe valves such as botted bonnet type, non-bonnete type, pressure seal type, piston type, gear operated, but nowhere it was show as inolating valves. the learned appellate collector of customs had confirmed the findings of the learned assistant collector that the glove valves were assessable under heading 84.61 (1) and had rejected the appeal. being aggrieved from the aforesaid order. the appellants have filed an appeal before the tribunal.3. shri d. ghosh and shri p.k. mukherjee, senior engineer have appeared on behalf of the appellants. shri mukherjee has reiterated the contentions made in the revision application. he had pleaded that the appellants had imported isolating valves and globe valves were nothing but the isolating valves. he has argued that the isolating valves completely shuts off the fluid from one section to the other (down stream operation). in support of his arguments he has also referred to is 778/1980 specification. he has also referred to the dictionary of industrial technics by dr. ing. richard ernst. as per dictionary meaning isolating valves means stop valve, vential means valve, hahn means stop cock, rohrbruehventil means isolating valve, absperren means to stop, block, to cut of, shut off the steam, absperrhahn means stop-cock and absperrventil means stop-check, shut off valve. he has also referred to a book named heat engines by david allan low. the extracts from the same book appears on pages 9, 10, 11 and 12 of the paper book. the same explains the functioning of the blow off valves.he has also referred to the kent's mechanical engineers' handbook [twelfth edition] which explains stop valves. it is mentioned there that the stop valve has no intermediate postion, it is always wide open or closed and that the prime function of the stop valve is to prevent overspeeding and to isolate the turbine from the main steak line.lastly he has referred to the indian boiler regulations, 1950. shri mukherjee stated that isolating valve is very widely used and the valves are used under high pressure. he has pleaded for the acceptance of the appeal.4. shri j. gopinath, the learned sdr who has appeared on behalf of the respondent submits that the appellants had imported globe valves and not isolating valves. in support of his arguments he has referred to lyons' encyclopaedia of valves by jerry l. lyons, p.e. and carl l.askland, jr. on page 41 of this book isolating valve has been described as 'a hand operated value located between the packing lubricator assembly and the packing box assembly in a control valve. it is used to shut off the fluid pressure from the lubricator assembly'. the packing box assembly has been described as "the part of a valve bonnet assembly used to seal against leakage around the valve steam and packing lubricator assembly has been described as "an air assembly that is used for lubricating a valve. shri gopinath stated that globe valve falls in the family of valves characterised by a closer member which travels in a line perpendicular to valve sheet. they are used primarily for throtling purposes for general flow control. shri gopinath has stated that the revenue authority had correctly classified the same under heading 84.61 (1), whereas the appellants have claimed the classification under heading 84.61 (2) customs tariff act as isolating valve. he has further stated that these valves are fitted on pipes of boilers near the water gaugue to stop the flow of water for repair or service purposes. he has pleaded that the isolating valve is fitted on the control valve. shri gopinath states that the technical literature cited by the appellants does not help them. he has pleaded that the assessment made by the lower authorities is in order and has pleaded for the dismissal of the appeal.5. shri mukherjee, sr. engineer in reply states that globe valve is not meant for protecting the valve. he states that the globe valve is a stop valve. he has pleaded for the acceptance of the appeal.6. we have heard both the sides and have gone through the facts and circumstances of the case. for the proper appreciation of the classification heading 84.61 (1) and 84.61 (2) are reproduced below :------------------------------------------------------------------------------heading sub-heading no. and description rate of duty no. of article.-----------------------------------------------------------------------------84.61 tapes, cocks, valves and similar appliances for pipes, boiler sheets, tanks vats and the like, (1) not elsewhere specified 60% (2) isolating valves, non-return valves, safety valves, pressure reducing valves, exhaust materials; steam traps 40%----------------------------------------------------------------------------- we have gone through the functions of the imported valves viz. globe valve. we feel that the description and function of the globe valve imported by the appellants is not that of isolating valve. isolating valve is a hand operated valve located between the packing lubricator assembly and the packing box assembly in a control valve. it is used to shut off the fluid pressure from the lubricator assembly. whereas, on the contrary, globe valve is simply a device for regulating flow in a pipe line. the valves imported by the appellants do not have the function of an isolating valve and as such we hold that the lower authorities had correctly assessed the same under heading 84.61 (1) of customs tariff act, 1975. accordingly we do not find any merit in the appeal. we confirm the findings of the lower authorities. the appeal is dismissed.

Judgment:
1. ACC Babcock Ltd. had filed a revision application to the Additional Secretary, Government of India being aggrieved from order-in-appeal No.Cal-Cus-618/1982, dated 20th March, 1982 passed by the Appellate Collector of Customs, Calcutta. The said revision application stands transferred to the Tribunal in terms of the provisions of Section 131B of the Customs Act, 1962 to be disposed of as an appeal.

2. Briefly the facts of the case are that M/s. ACC Babcock Ltd., Durgapur had imported a consignment of 'Glove Valves' valued at Rs. 32,846/- CIF and claimed assessment thereof, under Heading 84.61 (2) as 'Isolating Valves'. In support of their contention that those were isolating valves they produced a photo copy of leaflet of forged steel parallel slide valves, forged steel High Pressure and High Temperature Parallel Slide Valves, Forged Steel Globe Stop and Check Valves as well as a sheet of Schedule No. VM/8ref-CED/AV3/CV, dated 25-9-1980 and stated that ail the categories of valves referred to in the leaflets had been recommended for the isolation of medium of high pressure line in the process and power generation industries. It was also argued that this isolation function of the valve was not only for the Forged Steel Parallel Slide Valves but also for forged steel parallel slide valves and forged steel globe stop and check valves. They argued that since the function of the Globe Valve was to isolate a particular boiler mounting or instrument installed down stream of it, these valves were nothing but isolating valves and are accordingly assessable under Heading 84.61(2) of Customs Tariff Act, 1975. The learned Assistant Collector had rejected the appellant's claim for assessment under Heading 84.61(2) and had held that Globe Valves are to be assessed under Heading 84.61 (1) of Customs Tariff Act, 1975 as valves NES.Being aggrieved from the aforesaid order the appellants had filed an appeal to the Appellate Collector of Customs. Before the Appellate Collector the appellants had tried to distinguish between isolating valves, regulating valves and control valves. They had submitted that the function of an isolating valve was to isolate adjoining mounting/instrument/equipment installed down-stream of it. Its function is to open or close communication of a fluid or to prevent discharge of the fluid from one pipe lince into another. It is different from a regulating valve, which literally regulates the flow of a fluid in graded amount as desired, whereas the isolating valve can either be fully opened or totally shut without any intermediate openings. Control valve, on the other hand, control the flow of fluid to the desired amount, usually automatically, operated pneumatically. In support of their contention that those were 'Isolating Valves, they had submitted a catalogue of Okano Valve Manufacturing Company. The learned Appellate Collector had observed that there was nothing on record to show that the valves were of Okano make or having their registred trade mark. The Catalogue submitted by the appellants showed different kinds of globe valves such as Botted Bonnet type, Non-Bonnete Type, Pressure Seal Type, Piston Type, Gear operated, but nowhere it was show as inolating valves. The learned Appellate Collector of Customs had confirmed the findings of the learned Assistant Collector that the glove valves were assessable under Heading 84.61 (1) and had rejected the appeal. Being aggrieved from the aforesaid order. the appellants have filed an appeal before the Tribunal.

3. Shri D. Ghosh and Shri P.K. Mukherjee, Senior Engineer have appeared on behalf of the appellants. Shri Mukherjee has reiterated the contentions made in the revision application. He had pleaded that the appellants had imported Isolating Valves and Globe Valves were nothing but the Isolating Valves. He has argued that the Isolating Valves completely shuts off the fluid from one section to the other (down stream operation). In support of his arguments he has also referred to IS 778/1980 specification. He has also referred to the Dictionary of Industrial Technics by Dr. ING. Richard Ernst. As per dictionary meaning Isolating Valves means Stop Valve, Vential means Valve, Hahn means Stop cock, Rohrbruehventil means Isolating valve, absperren means to stop, block, to cut of, shut off the steam, Absperrhahn means stop-cock and Absperrventil means stop-check, shut off valve. He has also referred to a book named Heat Engines by David Allan Low. The extracts from the same book appears on pages 9, 10, 11 and 12 of the Paper Book. The same explains the functioning of the Blow Off Valves.

He has also referred to the Kent's Mechanical Engineers' Handbook [Twelfth Edition] which explains Stop Valves. It is mentioned there that the stop valve has no intermediate postion, it is always wide open or closed and that the prime function of the stop valve is to prevent overspeeding and to isolate the turbine from the main steak line.

Lastly he has referred to the Indian Boiler Regulations, 1950. Shri Mukherjee stated that Isolating Valve is very widely used and the valves are used under high pressure. He has pleaded for the acceptance of the appeal.

4. Shri J. Gopinath, the learned SDR who has appeared on behalf of the respondent submits that the appellants had imported Globe Valves and not Isolating Valves. In support of his arguments he has referred to Lyons' Encyclopaedia of Valves by Jerry L. Lyons, P.E. and Carl L.

Askland, Jr. On page 41 of this Book Isolating Valve has been described as 'A hand operated value located between the packing lubricator assembly and the packing box assembly in a control valve. It is used to shut off the fluid pressure from the lubricator assembly'. The Packing Box Assembly has been described as "The part of a valve bonnet assembly used to seal against leakage around the valve steam and Packing Lubricator Assembly has been described as "An air assembly that is used for lubricating a valve. Shri Gopinath stated that Globe Valve falls in the family of Valves characterised by a closer member which travels in a line perpendicular to valve sheet. They are used primarily for throtling purposes for general flow control. Shri Gopinath has stated that the revenue authority had correctly classified the same under Heading 84.61 (1), whereas the appellants have claimed the classification under Heading 84.61 (2) Customs Tariff Act as Isolating Valve. He has further stated that these valves are fitted on pipes of Boilers near the water gaugue to stop the flow of water for repair or service purposes. He has pleaded that the Isolating Valve is fitted on the Control Valve. Shri Gopinath states that the Technical Literature cited by the appellants does not help them. He has pleaded that the assessment made by the lower authorities is in order and has pleaded for the dismissal of the appeal.

5. Shri Mukherjee, Sr. Engineer in reply states that Globe Valve is not meant for protecting the valve. He states that the Globe Valve is a stop valve. He has pleaded for the acceptance of the appeal.

6. We have heard both the sides and have gone through the facts and circumstances of the case. For the proper appreciation of the classification Heading 84.61 (1) and 84.61 (2) are reproduced below :------------------------------------------------------------------------------Heading Sub-heading No. and description Rate of duty No. of article.-----------------------------------------------------------------------------84.61 Tapes, cocks, valves and similar appliances for pipes, boiler sheets, tanks vats and the like, (1) Not elsewhere specified 60% (2) Isolating valves, non-return valves, safety valves, pressure reducing valves, exhaust materials; steam traps 40%----------------------------------------------------------------------------- We have gone through the functions of the imported valves viz. Globe Valve. We feel that the description and function of the Globe Valve imported by the appellants is not that of Isolating Valve. Isolating Valve is a hand operated valve located between the packing lubricator assembly and the packing box assembly in a control valve. It is used to shut off the fluid pressure from the lubricator assembly. Whereas, on the contrary, Globe Valve is simply a device for regulating flow in a pipe line. The valves imported by the appellants do not have the function of an Isolating Valve and as such we hold that the lower authorities had correctly assessed the same under Heading 84.61 (1) of Customs Tariff Act, 1975. Accordingly we do not find any merit in the appeal. We confirm the findings of the lower authorities. The appeal is dismissed.