ORDER
S.K. Bhatnagar, Vice President
1. This is an appeal against the order of Additional Collector of Customs dated 6-1-1987.
2. Ld. Counsel stated that the appellants manufacture inter alia, pistons, rings and pins for motor vehicles. For this purpose they use various types of alloys for determining the composition of the various metals in the alloy. The appellants have imported one complete set of ’86-516 Jarrel-Asn Series 7000 Model 750V Atomcomp Director Reading Vacuum Spectrometer’ with essential accessories from USA. This Spectrometer has an integrated built-in computer and the dispute has arisen regarding its classification.
3. It was the appellants’ contention that this imported item was required to be assessed as a whole (i.e. as one unit along with the essential accessories including Apple computer). The Deptt. has on the other hand taken this stand that the Spectrometer and Computer were separate entities and were therefore required to be assessed separately on merits.
4. They had produced invoice, packing list and the catalogue before the authorities and the correspondence with Deptt. of Electronics and also the supplier.
It was their contention that the imported item was a direct reading Spectrometer and the computer was its ‘dedicated’ parts because this instrument cannot be used without this computer. Suppliers have also confirmed that “there is no direct reading Spectrometer which works without a data processing unit.” He would also draw attention to the clarification issued by the Deptt. of Electronics vide letter dated 13-1-1987 that “According to the Import-Export Policy, 1985-88, Vol. I” Ministry of Commerce, Chapter III, Para 58 (06), ‘clearance or Deptt. of Electronics will not be required where computer is a built-in integral part of the equipment’ “the system for which the clearance had been sought” is an integral part of the equipment proposed to be imported. In view of this assessment the clearance of the Deptt. of Electronics is not required from computer angle.
5. It was their contention that the ld. Addl. Collector has erred in holding that on examination of the catalogue, it was found that this Spectrometer was coupled with Apple computer, on the contrary, the packing list clearly shows that this Spectrometer was being imported along with the computer.
6. The view of the ld. Addl. Collector that this computer is for general application and was not built-in part of the Spectrometer is erroneous. It was their contention that this Spectrometer with integral built-in character was correctly classifiable under sub-heading 9027.30 of the Customs Tariff read with Notification No. 49/78, dated 1-3-1978.
7. That the computer has been packed separately only for convenience of transportation. In support of their contention, they have produced copy of a telex dated 12-12-1986 from the supplier clarifying that “this Spectrometer has been designed to work along with the Apple HE Computer only.”
8. That the ld. Addl. Collector has himself admitted that there is no dispute that direct reading Spectrometer would be non-functional without the computer, hence his further finding that the computer in the present case is not an integral part of the equipment is wholly erroneous.
9. In support of her contention, she would draw attention to the catalogue showing the photographs and drawings and the detailed structure and applications. The catalogue shows that the direct reading Spectrometer “performs rapid multielement analyses in a wide variety of industrial applications” and “are used to control melt composition for primary and secondary metal producers. These are very versatile instruments.” These photographs and sketches show the built-in computer and how the Atomcomp Spectrometer system works. It has been indicated that the operator simply mounts a sample on the sample stand. Presses the start command on the terminal and reads the results. This is only possible because of the ingegrated computer system. Further under the title ‘Custom Designing Your Own Atomcomp Spectrometer’, it is mentioned that the atomcomp “has a built in software program” and “software packages, either standard or optional, are available for the management of analytical data.” There is a specific reference to model 7000 to the effect that “The operator uses an Apple HE computer with dual floppy disks to interface with the system.”
10. She would also like to draw attention to “customizing your own Atomcomp Spectrometer.” Under this title ‘choosing the right software’ and the table indicating available software covers model 7000 and also indicates technical specifications. The second pamphlet about model 7000 Spectrometer also shows that it is “a micro-computer controlled system”.
11. In view of this position it was their contention that they had not violated any provisions of law and the imported item including the computer was required to be assessed as a whole and the computer was not required to be assessed separately.
12. The ld. DR drew attention to the Order-in-original and the order-in-appeal and emphasised that on examination of the catalogues and the goods, it was found that the computer had been imported separately. It was not a built-in part of the Spectrometer and therefore, was required to be assessed separately on its own merits.
13. It was the Department’s contention that the Apple computer is meant for general application and the manufacturer had only recommended use of the Apple computer for running the Spectrometer. The built-in computer falls under Appendix 2B(121) and requires an Import licence for clearance but no licence has been produced; hence the goods are liable to confiscation.
He agrees with the ld. Counsel that there is no dispute that the direct reading Spectrometer would be non-functional without computer as observed by the Addl. Collector but emphasised that the fact remains that the computer is not a built-in type but a general purpose computer.
14. By the concept of ‘built-in’, it is normally understood that the item is so constructed that the dismantling it would entail dismantling of the entire system whereas in the present case, the Spectrometer has a separate identity.
15. The Deptt. of Electronics has merely indicated that the clearance of the D/o Electronics is not required where the computer is built-in integral part of the equipment but the letter does not amount to certificate to the effect that in the imported item the computer was built-in integral part of the system.
16. In support of the deptt.’s contention that this computer has a separate identity as an entity and was a general purpose one, he would also draw attention to the same catalogue which has been referred by the ld. Counsel. It shows that the imported “system has four major components: excitation source, the sample stand, polychromater and the spectro chemical controllers” and the part regarding ‘Custom designing’ referred to by the ld. Counsel also shows that the software packages are either standard or optional depending on the model i.e. depending upon the model the purchaser has an option to choose the package.
It was also his contention that there is no doubt or dispute that this spectrometer is put to use with the computer but that does not mean ipso facto that the computer was in integral part of the Spectrometer; And the softwares referred to are obviously the ones which have to be used for operating and utilising computer.
17. The ld. DR also stated that he would also like to cite the Tribunal’s Order No. C/204/95-B2, dated 20-6-1995 1995 (79) E.L.T. 450 (Tribunal) in the case of Glaxo Lab. (India) Ltd. v. C.C., Bombay regarding the case of chromatographic 2-Sigma 2000. In this case the Tribunal came to the conclusion that the chromatograph-2 was a date processing machine in the form of a powerful micro-processor; It cannot be termed as an integral part of chromatographs and therefore, has to be classified on merits.
18. He would also like to show that the computer is a general purpose one from another part of the catalogue titled ‘Customising your own Atom-comp Spectrometer’ which indicates that it can be made even more valuation by using this computer for other purposes. “For exemple it can be used to do word-processing, accounting, financial management and inventory and much more” and “it is possible to obtain many different kinds of software from Apple Computer Inc. for science, business writing and programming”. In the same way a wide range of software program could be had from Digital Equipment Corporation and their user groups. It was also his submission that even about 7000 model it has been mentioned that the computer can be enclosed within a cabinet for protection from the environment and the item which has not been imported was not even within the cabinet but admittedly packed separately.
19.(i) Ld. Counsel emphasised that it has an electronically controlled excitation source and the comparison chart of model features show that the model 7000 series has apple HE computer. It comes with the software programmes for complete calibration and system, specro-chemical, diagnostics etc. with dual floppy disks to interface with the system.
(ii) The ld. Counsel further stated that the case cited by the ld. DR is regarding a different item and it is possible that the micro-processor which had been imported separately in that case was not an essential or integral part of the chromactographics but that does not mean that in their case also it was so.
20. We have considered the above submissions. We observe that the ld. Counsel’s arguments have a strong force. The most important thing which strikes us is that the ld. Addl. Collr. has himself accepted the fact that the direct reading Spectrometer would be non-functional without computer and even at this stage this has been accepted as correct.
21. There are several types of Spectrometer and the old traditional types were generally without computers but the modern direct reading Spectrometers are in a different category. These are compact instruments which incorporate a computer in the system so that they can measure, process and analyse themselves and the results become immediately available. The catalogue and the pamphlet produced before us clearly show this fact and the following sentences in the catalogue are important :- “The operator simply mounts a sample on the sample stand. Presses the start command on the terminal. And reads the results. The Atomcomp system does all the rest automatically. These Spectrometers can perform rapid multielement analysis in wide variety of industrial application. The catalogue portion showing how the system works indicates, inter alia, that:- (1) The operator mounts the sample on the sample stand and types in the start command; (2) The excitation source produces a spark or arc which vaporizes the sample and excites the atoms of the elements in the samples. This causes each element to emit its characteristic spectrum with an intensity that’s proportional to its concentration in the sample; (3) The light emitted by the discharge passes through the entrance slit of the polychromator onto a concave diffraction grating which separates the light into its component wavelengths and focuses them on the focal curve. Exit slits precisely positioned along the focal curve isolate the wavelengths that are significant for the sample being analysed. A photomultiplier tube behind each exit slit converts the light intensity into an electrical signal; (4) The signal from each photomultiplier is integrated over the period of the sample burn by a special Jarrell-Ash measuring circuit. After the burn, the computer stores a series of digital numbers in its memory that are directly proportional to the wavelengths and hence the concentrations of the elements in the sample; (5) The computer then calculates the concentrations of each element from a calibration curve or formula for that element stored in computer memory; (6) The concentrations of the elements in the sample are displayed on a video screen and/or printed by an output device, in % ppm (parts per million). If desired, the concentration of the matrix or base metal can be included.
All this working shows that the computer in this case has been integrated with Spectrometer in such a way that the two together constitutes a single system. In fact the pamphlet itself describes the AAS direct reading Spectrometer system as a whole. The four major components thereof have been described by the ld. DR but further reading of the pamphlet as indicated above shows that it is possible to operate the type of equipment which has been imported only in a manner as indicated therein and the fact that software packages are optional only means that the importer or customer could order those packages which he needs for purposes but one or the other software has to be used in order to obtain the results of the analyses. The pamphlet itself shows that AAS offers four basic Atomcomp direct-reading Spectrometers. These models utilise today’s most advanced micro-processors and minicomputer technology. While we have introduced our fourth generation of computer controlled Spectrometers, most manufacturers are still perfecting their second generation of instruments. “Each Atomcomp model has a built in software program to provide complete concentration print-outs and that is why depending on the Atomcomp model, the customer chooses either standard or optional software packages for management of analytical data.” Further model 7000 can be programmed with upto 49 analytical channels, including internal standards. Any combination of channels may be included in a working matrix. Computers and the software programmes have also been included in the features of Atomcomp models. Under the heading Customizing your own Atomcomp Spectrometer, the pamphlet shows that every Spectrometer built in software programmes says that “Every Atomcomp direct-reading Spectrometer comes with built-in software programs which automatically analyse samples, convert intensities to concentration and display concentration values.” The facts that the computer of this Spectrometer can be used for other purpose also does not in any way affect the position regarding its integration as a sub-system.
22. Under the circumstances, it is immaterial whether the computer required to be used along with the main Spectrometer is enclosed within cabinet or could be plugged in. What is significant is that this type of Spectrometer is so designed that it functions in an ingreated way along with the computer and can be operated and controlled only with such computer which can be interfaced with it in the indicated manner.
23. Once computer is required to be treated as a sub-system of the Spectrometer system, the fact that it was packed separately or otherwise would also not make any difference particularly when it had been imported along with Spectrometer proper. In fact, reading of the catalogue shows that it cannot be treated as an accessory but is an essential part without which the Spectrometer proper is admittedly not even functional and for this reason even though the invoice shows that high resolution CRT miniature for real time data display was interchangeable with domestic TV (a fact towards which our attention has not been drawn by either side and does not find mention in the order) would also not make any difference. The packing list also shows the Apple HE enhanced computer packed in a separate case but as aforesaid, that by itself was not a determining factor.
24. The ld. Counsel is also correct in pointing out that the case-law cited by the ld. DR does not help the cause of the deptt. as no ratio can be drawn from it as. That order is specific for a particular importation and each case has to be decided on its own merits.
25. In view of the structure and method of functioning of this type of Spectrometer it is held that the computer is an essential part of the Spectrometer and therefore, a separate licence is not required and the item has to be assessed along with the main Spectrometer under the same heading.
26. The impugned order is therefore, set aside and the appeal is accepted.