ORDER
A.C.C. Unni, Member (J)
1. In this appeal, Order-in-Appeal dated 18-12-1992 passed by the Collector of Customs (Appeals), Bombay holding that Ozone Test Chamber imported by the appellants are correctly classifiable under Heading 8479.89 under the Customs Tariff has been challenged.
2. The appellants had imported a consignment of Ozone Test Chamber Model 603L and had sought classification thereof under Chapter Heading 9027.10. The Asstt. Collector did not accept the said classification and directed it to be classified under Heading 8479.89. The Collector of Customs (Appeals) confirmed the said order of the Asstt. Collector. The present appeal is directed against that order.
3. The appellant’s case is that they are manufacturers of rubber tyres and in the process of manufacture of rubber the presence of ozone in the atmosphere affects the resistance capacity of rubber tyres and tubes. They explained that though the presence of ozone in the atmosphere was only at the level of 10 PPHM (Parts Per Hundred Million), it tends to attack rubber. To tackle this problem, they had to install, the equipment under dispute to test the resistance capacity of rubber to ozone. For this purpose, a higher concentration of 50 PPHM is maintained in the chamber and the rubber is continuously rotated and passed along so that all parts are equally exposed to this higher concentration of ozone.
4. Shri Joseph Vellapally, Sr. Advocate who appeared for the appellants along with Ms. Juhi Singh, ld. Advocate, submitted that the Ozone Test Chamber Model 603L imported by the appellants was principally a test machine for testing the elasticity and tensil strength of rubber to cracking when exposed to ozone under static and dynamic strain conditions. The appellants had classified Test Chamber Model 603L under their Bill of Entry dated 6-12-1991 under Chapter Heading 9027.10 read with Notification No. 23/91. The Customs Appraiser, however, sought to reclassify the item under Chapter Heading 8479.89 read with Notification No. 108/91 chargeable to a higher rate of duty. In this connection, he referred to the relevant chapter headings in the Central Excise Tariff Act. Whereas Heading 90.27 covered instruments and apparatus for physical or chemical analysis such as polarimeters, refrac-tometers, spectrometers etc, including instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension and instruments and apparatus for measuring or checking quantities of heat, sound or light, Heading No. 84.79 -covered machines and mechanical appliances having individual functions, not specified or included elsewhere in Chapter 84. Notification No. 23/91 had granted exemption to goods falling under Chapter 90.27 from the payment of auxiliary duty. Ld. Counsel submitted that the impugned article was essentially a test machine comprising an atmosphere chamber, ozone generating equipment, ozone level measurement; control and recording system; temperature controller, mobile test piece carrier for inducing static strain etc. The instrument was used to generate ozone concentration and to test the deterioration of rubber. He also referred to the Annual Book 1988 of American Society for Testing and Materials (ASTM) in support of his above contention. Further, he also referred to Chapter Heading No. 9024.80 of HSN at page 1504 which stated that the said heading covered a wide range of machines and appliances for testing the hardness, elasticity, tensil strength, compressibility or as mechanical properties of various materials such as metals, wood, rubber, etc. Since Chapter 90 covered a wide variety of instruments and apparatus such as the present one used for testing the tensil strength elasticity and other mechanical properties of rubber after ozone treatment, the item cannot be classified under Chapter 84 but under Chapter 90. He also referred to the Technical Literature relating to the item in dispute. Ld. Counsel submitted that the authorities below failed to take into account the fact that Chapter Heading 84.79 dealt with machinery and mechanical appliance having individual functions and Chapter sub-heading 8479.89 was a residuary entry whereas Chapter Heading 90.27 dealt with instruments and apparatus, inter alia, for measuring or checking of viscosity, porosity expansion surface tension or the like. Alternatively, the appellants had also submitted before the Collector (Appeals) that the imported goods were classifiable under Chapter Heading 90.24 which inter alia dealt with machines and appliances for testing the hardness, strength, compressibility, elasticity or other mechanical properties of materials. Further interpretative Rule 3(a) of the Customs Tariff Act provides that the more specific description should be preferred to headings providing a more general description. The Collector (Appeals) had mistakenly come to the conclusion that the main function of the item was to generate ozone whereas in actual fact, the machine was principally a testing machine for Research and Development Centre of the appellants and it was mainly required for purposes of carrying out several tests on the main material for manufacture of tyres and tubes, namely rubber.
5. Ld. DR Shri A.K. Agarwal referred to the observations of the Collector (Appeals). Collector (Appeals) had observed that though the appellants have contended that Ozone Test Chamber is used to find out the time and heat required in the presence of ozone for the rubber to crack, the rubber is taken out only to see whether cracking had taken place or not. The appellants’ contention was that the goods were used only to analyse and find out the resistance of rubber to ozone and hence the item would be classified under Heading 9027.80. The Asstt. Collector had classified the goods under Heading 8479.89 for the reason that the imported item does not check, analyse or measure any parameter of rubber. Further, rubber is heated in the ozone chamber and after heating the sample is taken out for visual inspection. Collector (Appeals) had further found that in view of the appellant’s own submissions, a higher concentration of 50 PPHM is maintained in the chamber and rubber, is continuously rotated and passed along so that all parts are equally exposed to the higher concentration of ozone for a particular time. Besides, the appellants themselves had admitted that the main function of the item was to generate ozone and to maintain it at the required level. Since the impugned goods were not capable of doing physical or chemical analysis or for measuring or checking viscosity, porosity, expansion, surface tension or the like or rubber, the impugned item cannot be classified under Heading 90.27 as claimed by the appellants. The Departmental Representative therefore, submitted that the Collector (Appeals) had rightly confirmed the classification of the goods under Heading 8479.89.
6. Heard both the sides and perused the records. We find that in R.P. Brown “Physical Testing of Rubber” (2nd Edition – page 291) it has been observed that ozone can severely attack non-resistance rubber if they are in the strained condition. It is for testing the resistance of rubber to ozone that the impugned machinery was imported. It is also seen from HSN Notes relating to Heading 90.24 that Chapter sub-heading 9024.80 would cover a wide range of machines and appliances for testing the hardness, elasticity, tensil strength etc. or various materials including rubber. From the extract of “American Standards” (American Society for Testing and Materials – Annual Book of Standards-1988) relied on by the appellants it is seen that the standard test method for Rubber Deterioration was surface ozone cracking in a chamber. The significance and use of the machine is explained as under:
“4. Significance and Use
4.1 In service, rubber must resist the deterioration that ozone cracking produces. Therefore, a method is needed that estimates this performance.”
In paragraph 5, the functions of Ozone Test Apparatus is explained as under:
“5.1 – Test Chamber – Requirements for an acceptable ozone test chamber are sufficient air ozone throughout rate, sufficient internal circulation, and sufficient internal volume. A secondary requirement is that of controlling the temperature within acceptable limits. An acceptable ozone test chamber can be custom-made in a particular laboratory or one of the commercial manufactured chambers which are available.”
Further, in paragraph 6, the process of Sampling has been explained. Paragraph 6.1 reads as under:
“6.1 – A sampling process should be used to ensure that the tests on specimens form either compounded and cured rubber sheets or specimens prepared from products are representative of the lot or other units to be compared”.
7. From a perusal of the product literature of Ozone Test Chamber Model 603/803, it is seen that its features include continuous monitoring, digital display of test parameters, humidity controls, low temperature option and conformity to national or international standards. It appears from a perusal of the Technical Literature and the Product Literature referred to above, that the Ozone Test Chamber is an Apparatus which has more functions than generating ozone and maintaining it at a required level. We, therefore hold that is in the nature of a testing equipment.
8. We observe that Chapter Heading 90.27 which, inter alia, covers instruments and apparatus for measuring, among other things; “surface tension or the like” would cover the functions discharged by the item in question. Chapter Heading 84′,79 on the other hand covers machines and mechanical appliances having individual functions not specified elsewhere. Having regard to the features of the article in dispute, we agree with the submissions made by the Counsel for the appellants that the more appropriate classification for Ozone Test Chamber Model 603L imported by the appellants would be 9027.80 and not 8479.89.
9. The appeal is accordingly allowed with consequential benefits to the appellant. The impugned order is as a result set aside.
ORDER
S.K. Bhatnagar, Vice President
With due respects to Hon. Member (J) my views and orders are as follows:-:
10. I observe that the item described as ozone test chamber performs two functions – (i) it generates ozone (ii) it tests the rubber in an ozone environment in specified conditions. Therefore, it is obvious that it cannot be classified under 84.79 which covers only machines and mechanical appliances having individual functions not specified or included elsewhere in that Chapter. Furthermore since it is in the nature of a testing apparatus it would obviously fall under Chapter 90. The appellants have claimed its classification under 90.27 and prayed for alternative classification under 90,24. In this respect I observe that the Assistant Collector was right in observing that it does, not perform physical or chemical analysis and does not measure any of the parameters mentioned in the Heading 90.27. Therefore 90.27 is ruled out. This leaves us with Heading 90.24. This heading includes appliances for testing various properties and the appellants have stated that they test the effect of ozone which makes the rubber crack. The property which is required to be tested is more akin to the properties mentioned under 90.24. It is significant in this connection that although 90.24 covers appliances for testing material, the Customs Tariff does not specifically mention rubber; But the materials which are indicated therein are only by way of examples which goes to show that it does not exclude rubber. The position becomes more clear when we see the HSN; Heading 90.24 of HSN is pari-materia-with the corresponding customs heading and the explanatory note specifically includes rubber in the examples of various materials the properties of which are tested by appliances falling under this heading. It may however, be pointed out that Heading 90.24 of HSN excludes instruments for detecting faults, fissures/cracks or other defects in materials classifiable under Heading 90.31. The imported item in question is admittedly meant for testing rubber deterioration due to surface ozone cracking. A question, therefore arises whether the item was hit by the exclusion clause and would be classifiable under Heading 90.31. Heading 90.31 has however not been pleaded by any of the sides and it is in the nature of a residuary entry. Furthermore 90.31 includes those instruments for detecting fissures and cracks in materials which operate either by observing the cathode ray scheme diagram resulting from magnetic variation or by direct reading of variations in magnetic permeability as indicated on a graduated scale or by use of ultrasonic waves as per HSN explanatory notes. Therefore, on the whole Heading 90.24 is more appropriate. Hence, while I agree with my ld. Colleague that the impugned orders are required ‘to be set aside and the imported item falls under Chapter 90,1 consider 90.24 as more appropriate for the reasons mentioned above.