ORDER
V.P. Gulati, Vice President
1. The issue in the appeal relates to the classification of the goods which have been described as “High Voltage test transformers, Current transformers, capacitor voltage transformers and balancing transformers”.
2. The learned lower authority has held that the goods to be assessable under Tariff Heading 85.04, while the assessee seeks the classification of the same under Tariff Heading 85.43. The Tariff Heading 85.04 reads as under :-
“Electrical Transformers, Static Converters (for example, rectifiers) and inductors.”
The Tariff Heading 85.43 on the other hand reads as under :-
“Electrical Machines and Apparatus, having individual functions not specified or included elsewhere in this chapter.”
3. The learned Advocate for the appellant Shri Jagadesan has pleaded that the item could not be classified under Tariff Heading 85.04 for the simple reason that these transformers are not used in the manner as known to the trade and are for certain specific uses. He has pleaded the goods do not pass the muster of a transformer in the trade parlance test. He has pleaded that normally the transformers as are understood in the trade are those which are used for performing the function of change in voltage by stepping-up or stepping down or likewise for the current. He has pleaded the appellant’s equipments although function on the principle of a transformer, are used specifically between the normal transformer and the machines to ensure a steady voltage which can be measured or tested. He has pleaded, in this background, these are not on line apparatus for supply of the current at the desired voltage and are in the nature of the machine or apparatus which is used between the normal transformer and the machines.
4. He has pleaded by reason of its usage, these should be taken to be performing an individual function by ensuring a desired rated supply of current. He has pleaded that for this reason, therefore, the learned lower authority was in error having assessed the goods under Tariff Heading 85.04. He has also urged that the demand which was originally raised beyond the period of 6 months. Though it has been held to be demandable for a period of 6 months, it should not have been made retrospectively and the revised classification should have been made applicable prospectively.
5. Heard the JDR for the department. He has pleaded that it is seen from the catalogue and the write-up which has been submitted from an expert, the goods or the apparatus perform the function of transformer only. He has pleaded that in this view of the matter if the whole thing is housed in one shell what has to be seen is functionally whether the item in question can be taken to be a transformer. He has pleaded it makes no difference if the transformers in question answers to a specific use. He has also referred us to the explanatory notes under HSN. He has pleaded it is clearly set out thereunder that all kinds of transformers are covered under Tariff Heading 85.04. Regarding the limitation, the revenue has appealed before us. He has pleaded that the ground taken is that the heading classified would applicable for all the passed clearances. He, however, could not point out how any element of suppression held against the appellants as such.
6. We have considered the pleas made by both the sides. We observe the admitted position is that the item in question functions on the principle of a transformer i.e. the change in voltage is brought about by the uses of primary coils and secondary coils by the process of induction. In the present case both the primary & secondary coils are housed in one shell. It is seen from the “Standard Handbook for Electrical Engineers” edited by Donald G. Fink that there two types of transformers in common use which are covered under the heading transformers.
7. The term “transformer” as set out in “McGraw Hill Dictionary of Scientific and Technical terms” is as under :
“transformer (ELECTROMAG) An electrical component consisting of two or more multiturn coils of wire placed in close proximity to cause the magnetic field of one to link the other; used to transfer electric energy from one or more alternating current circuits to one or more other circuits by magnetic induction.”
8. The types of transformers as are set out in the Standard Handbook for Electrical Engineers referred above in para 33 are as under :-
33. Two Types of Transformer in Common Use. When the magnetic circuit takes the form of a single ring encircled by two or more groups of primary and secondary windings distributed around the periphery of the ring, the transformer is termed a core-type transformer. When the primary and secondary windings take the form of a common ring which is encircled by two or more rings of magnetic material distributed around its periphery, the transformer is termed a shell-type transformer (Fig. 10-17). Actually, “core-type” (or “core-form”) in U.S. Simple core-type Simple shell-type power-transformer engineering usage Fig. 10-17. Fonns of inugnotic circuits means that the coils are cylindrical and con-for transformers. centric (the outer winding over the inner) whereas “shell-type” (or “form”) denoteslarge pancake coils which are stacked or interleaved to make primary-secondary (P-S) groups. Primary-secondary-primary (P-S-P) grouping is common but P-S-P-S-P is often used. In actual practice the cylindrical-concentric coil structure is sometimes used with an enclosing (shell-form) core, in single phase, or with a five-legged core, in 3-phase (Figs. 10-18 and 10-19) to reduce the overall height. Figure 10-20 shows the conventional 3-phase shell-form core with the coils in section.
Technically speaking, the appellants have not brought on record any distinction between the construction of their product from the transformers as have been described above. The appellant’s case is only based on the fact that the usage of these items is not as understood in the trade generally regarding the transformers.
9. The learned Advocate has highlighted that only such of those goods should be considered as transformers which are used on line for bringing about the change in voltage in supply circuits of the current.
10. We observe that the uses as have been described by the learned Advocate in the present case, are also on the same line inasmuch as according to him once the current has been drawn from a source i.e. another transformer, the same is again routed through this and supplied to other instrument and apparatus of the machinery. In this also the electric current and voltage are stepped-up or stepped down as seen from the catalogue which have been produced before us. The ratings of the transformer given as under are also in the manner ratings are indicated for all transformers i.e. in kVA
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Single-stage Two-stage Three-stage Rated voltage (kV rms) 100 Rated voltage (kV rms) 200 Rated voltage (kV rms) 300 (no-load voltage) (no-load voltage) no-load voltage) ------------------------------------------------------------------------------------ Output (kVA), continuous 5 Output (kVA), continuous 5 Output (kVA), continuous 5 ------------------------------------------------------------------------------------ Rated current (mA) 50 Rated current (mA) 25 Rated current (mA) 16 ------------------------------------------------------------------------------------ Impedance Impedance Impedance voltage (%) approx. 4 voltage (%) approx. 7 voltage (%) approx. 11 ------------------------------------------------------------------------------------ Frequency (Hz) 50 and 60 Frequency (Hz) 50 and 60 Frequency (Hz) 50 and 60 ------------------------------------------------------------------------------------
11. We observe that the goods which answer to the use of transformer, the functional ratings as could be seen from the HSN notes is given in terms of KVA i.e. Kilo volt Amperes. It is pertinent in this case to refer to HSN notes tinder Tariff Heading 85.04 which reads as under :
(I) ELECTRICAL TRANSFORMERS
Electrical transformers are apparatus which, without having any moving parts, transform, by means of induction and using a preset or adjustable system, an alternating current into another alternating current of different voltage, impedance, etc. These usually consist of two or more coils of insulated wire wound on laminated iron cores, although in some cases (e.g., radio-frequency transformers) there may be no magnetic core, or the core may be of agglomerated iron dust, ferrite, etc. An AC in one coil (the primary circuit) induces an AC usually at different values of current and voltage in the others (the secondary circuit). In certain cases (auto transformers) there is only a single coil, part of the winding of which is common to the primary and secondary circuits. In shell type transformers, there is a shell of laminated iron round the transformer.
Certain transformers are designed for particular purposes, e.g., matching transformers for matching the impedance of one circuit with that of another, and instrument transformers (current or voltage transformers, combined instrument transformers) used to step down or step up voltages or currents to the level of the connected equipment, e.g., measuring instruments, electricity meters or protective relays.
The heading covers all transformers. They vary from small types used in wireless sets, instruments, toys, etc., to large types enclosed in oil tanks or equipped with radiators, fans, etc., for cooling purposes. The large types are used in electricity stations, stations for interconnecting mains, distributing stations or sub-stations. The frequency may vary from mains frequencies up to very high radio frequencies.
The power-handling capacity of a transformer is the kilovolt-ampere (kVA) output based on continual use at the rated secondary voltage (or amperage, when applicable) and at the rated frequency without exceeding the rated temperature limitations.
Transformers for electric welding equipment presented separately without their welding heads or welding appliances are classified in this heading. However, they are excluded (Heading 85.15) when presented together with their welding heads or welding appliances.
The heading also covers induction coils, a kind of transformer in which an intermittent or fluctuating direct current in the primary induces a corresponding current in the secondary. They can be used either to step up the voltage to a higher value or, in the case of telephony, to reproduce in the secondary circuits a small fluctuating current corresponding to the fluctuation imposed on a steady DC in the primary. The heading covers induction coils of all kinds, other than ignition equipment for internal combustion engines (Heading 85.11).
12. It is seen from this heading that all types of transformers are covered under this heading. Once it nor disputed that the appellants item functions on the principle of the transformer and it is shown to be rated like another transformer same will have to be assessed as transformer notwithstanding that it is found to be used in a particular manner with respect to a particular item of machinery. That the transformer gives a certain rated supply without fluctuation does not make it as transformer for the purpose of classification under Tariff Heading 85.04.
13. We observe that the Tariff Heading 8543 is more in the nature of residuary tariff heading. The items can be assessed under this heading only in the event it is found that the item in question could not be classified by reason of function or description under any other heading of Chapter Note 85. Under the HSN notes it has been stated that this heading covers all electrical appliances and apparatus, not falling in any heading of this Chapter 85. In order to cover from specifically by heading of any other chapter of the nomenclature is not excluded by the operation of a legal note to Section XVI or to this chapter. It is further elaborated that most of the appliance of this heading consist of an assembly and electrical goods or parts (valves, transformers, capacitors, chokes, resistors etc.) operating wholly electrically. It is thus seen that for an item to fall under this heading it is to be first shown that the particular item should not fall under any other heading or Chapter 85. Further, it is seen that the goods which are falling under this heading by themselves should comprise of any number of electrical goods put together.
14. We observe that the items in question as has been brought out above clearly falls by its function, construction and usage under the Heading 85.04 and it is not covered within the ambit of Chapter Note 85.43 by reason of the chapter notes in the Central Excise Tariff and the elaboration as given under the HSN.
15. We observe the Central Excise Tariff is designed on the scheme of HSN and the Hon’ble Supreme Court has held in the case of Wood Craft Products Ltd. v. CCE, Shillong reported in 1995 (77) E.L.T. 23 (S.C.) that any reliance can be placed on the notes of the HSN for the purpose of arriving at the correct classification.
16. In view of our above discussion, we hold that the goods are correctly classifiable under 85.04. As regards the limitation, we observe that the Hon’ble Supreme Court in a number of decisions has held that longer period of limitation can be invoked only in cases where it could be shown that there was suppression of facts with the intention to evade payment of duty. In the present case, the appellant had been filing the classification list regularly and the same were approved also regularly and there is nothing on record to show that there was suppression of facts with the intention to evade payment of duty on the part of appellants. The plea of the appellant that the duty should not be demanded retrospectively cannot be countermand in view of the decision of three Member Bench of the Hon’ble Supreme Court reported in 1995 (76) E.L.T. 499 (S.C.) wherein it is clearly held that the demand in the event of change of classification could be made for the passed period of 6 months.
17. In view of the above, we dismiss the appeal of the assessee as also of the department.