ORDER
Gowri Shankar, Member (Technical)
1. The primary question for consideration in this appeal is the classification of telescopic lighting towers that the appellant manufactures. In the order impugned in this appeal, the Commissioner (Appeals) has described the structure and the function of this tower. He says that it is composed of tapering sections. The base of each section is narrower than the base of the one below it, so that each section is capable of falling back into the section below it. The whole thing, as its name indicates, is telescopic, the object being to raise or lower its height, both to facilitate transportation as well as to render it suitable for use in different locations. Its use, we are told, is to provide illumination in such areas as opencast mines. Atop of the last segment is mounted a battery of electric lights which can be swelled in order to provide illumination in the required area. Electricity from either generator or from the main supply is the motive power.
2. The appellant had claimed classification of these goods under Heading 7308.20 of the tariff. This heading 7308 is inter alia for structures and parts of iron or steel; sub heading 20 covers towers and lattice masts. The Commissioner, in his order, has accepted the department’s proposal to classify the goods under Heading 8543.00 as electric machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85.
3. The Commissioner accepts that the sole purpose of the tower is to provide illumination in the manner that we have described earlier. It is also capable of tilting from its base by around 90 degrees. He says that since its height is adjustable, as is its angle from the horizon, it acquires the nature of a machine, having individual function. It is not possible for us to agree that merely because the machine is telescopic, and capable of swivelling, it ceases to be a tower. It is made up of strips and sections of iron and steel and thus is a structure classifiable under heading 7308.20. The Explanatory Notes to the Harmonised System of Nomenclature to this heading includes products such as adjustable or telescopic props, tubular props, extensible coffer beams. Therefore, the fact that the structure is telescopic and can be swivelled does not detract from its being a tower. The notes to heading 85.43 provide that the introductory provisions of the notes to Heading 84.79 concerning machines and mechanical appliances having individual functions apply mutatis mutandis to the appliances and apparatus of this heading. The notes under heading 84.79 specified two categories of machines that are regarded as having individual functions. Apart from explaining the nature of individual function, the note explains that the heading is restricted to machinery which is not excluded from Chapter 84.79 by the operation of any section or chapter notes, is not covered more specifically by a heading in any other chapter or nomenclature and cannot be classified in any other particular heading of Chapter 84. We have already found that the article is more appropriately covered by the description as a tower. It does not satisfy the requirements of this note. The application of heading 84.79 is thus ruled out. The classification claimed by the appellant therefore has to be accepted.
4. The other question that arises is the inclusion in the assessable value of the battery of lamps that are fitted onto the tower. It is stated that very occasionally the tower is sold without the lights. The purchaser in such cases presumably fits the lights of his own specification. It is therefore contended that in determining the assessable value of this tower, the cost of the lights, which are “bought out” articles that the appellant does not manufacture, but purchases from outside, is not to be included. Reliance is placed upon the decision of this Tribunal in C.C.E. vs. Radiant Electronics 1996 (85) ELT 102.
5. It is the appellant’s entire case that the function of these towers is to provide illumination. The lights which sit atop of the towers are therefore crucial to its function. The towers do not have their specific identity without these lights. It therefore follows that the cost of these parts would be included in the value of the tower. In the decision of the Tribunal that is cited before us, it was held that the cost of cables which are to be attached to the electronic private automatic branch exchange (Epabx for short) would not form part of the exchange, and therefore should not be included in its assessable value. There is no comparison with the situation before us. The lights are a necessary part of the tower. Without these lights, the tower would be incomplete. It acquires its identity as a lighting tower by means of these lights. The ratio of the cited decision therefore will not apply. Of course, in case of goods which are sold in incomplete condition, the question of inclusion of the value of these lights will not arise.
6. A penalty of Rs 25,000/- has been imposed on the ground that the appellant did not apply for registration as provided in the rules. The declaration was required to be filed when the value of clearance of the goods exceeded Rs 20.00 lakhs; in computing this value, the appellant acting on a bona fide belief excluded the cost of the lights. It is not possible for us to see what it is that gave rise to this belief. It is difficult to resist the conclusion that this is justification now brought out before us for an otherwise inexplicable failure to comply with the law. We therefore decline to interfere with the penalty.
7. The appeal is therefore allowed in part, and the impugned order of the Commissioner is set aside to that extent.