Holding

The Tribunal failed to consider the functional aspects of the spectrometer; the matter is remitted to the Tribunal for a fresh de novo determination after examining the catalogue.

Summary

Sterlite Industries imported a Fully Automated Sequential X‑ray Spectrometer and claimed classification under sub‑heading 9027.30 of the Customs Tariff Act, 1975, seeking a lower duty rate and a partial exemption under Notification 46/96. The Customs Department classified the equipment under sub‑heading 9022.19, imposing a higher duty, and the Tribunal upheld this assessment. On appeal, the Supreme Court observed that the spectrometer is a multi‑functional apparatus with an integrated computer and software, aspects that the lower authorities had not examined. The Court therefore set aside the Tribunal’s order and remitted the case to the Tribunal for a fresh, de novo decision after considering the catalogue annexed to the record, without expressing any opinion on the ultimate classification. The appeal was allowed and the matter was sent back for re‑determination.

Issues considered

Whether the Fully Automated Sequential X‑ray Spectrometer should be classified under heading 9022.19 (apparatus based on the use of X‑rays) of the Customs Tariff Act, 1975.
Whether the same apparatus falls under heading 9027.30 (spectrometers using optical radiations) of the Customs Tariff Act, 1975.
Whether the presence of an integrated computer and software, making the device multi‑functional, influences its tariff classification.
Whether the Tribunal erred by not examining the functional aspects and the catalogue, warranting a remand for a fresh decision.

Legislation cited

Customs Act, 1962s. 130E
Customs Tariff Act, 1975

Subjects

classification of goodscustoms dutytariff headingsspectrometerx‑ray equipmentintegrated softwarepartial exemptioncustoms tribunal

Judgment

A MIS STERLITE INDUSTRIES (INDIA) LTD.
,V.

COMMISSIONER OF CUSTOMS, CHENNAI

MARCH 19, 2007

B [S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.]
\-

Customs Tariff Act, 1975:

Sub-headings 9022. 19 and 9027. 00-"Fully automated sequential X-
C ray spectrometer"-'-C/assffication-Held, Tribunal has not examined the
functional aspects of the apparatus-Matter remitted to Tribunal to decide
the same de-novo after examining the catalogue annexed in the records-
Notijication No. 46196-Cus dated 23. 7.1996.

D Appellant-assessee imported "Fully Automated Sequential X-ray
Spectrometer" and filed its "Bill of Entry" for home consumption. It claimed
benefit of partial exemption Notification No. 46/96-Cus dated 23. 7.1996 and,
assessing the equipment under sub-heading 9027.00, paid the customs duty
accordingly. The Revenue assessed the apparatus under Sub-he21ding 9022.19
and accordingly charged the customs duty.
E
AIIQwing the appeal of the assessee and remitting the matter to the
Tribunal, the Court

HELD: The apparatus imported by the assessee is multi-functional. It
has an inbuilt software and automatic analysis program. It is the software in
F the System which makes the system carry out multi-purpose functions. The
computer processes the data. The configurations are also s:pecified in the
assembly of the Spectrometer. The catalogue/ brochure produced indicates
that the Spectrometer in question would be non-functional without the
computer. These aspects have not been considered by the authorities below.
G The Tribunal would, therefore, decide the matter de novo after examining
the catalogue annexed as Annexure-8 in its records. The Tl'ibunal can also
consider the alternative submission of the assessee, namely, that the above
item can fall also within sub-heading 9027.80. It is made clear that this Court
has not expressed any opinion on merits. !Para 7) 188-E; 89'-A-B)

H 84
STERLITE INDUSTRIES (INDIA) LTD. "· COMMNR. OF CUSTOMS. CHENNAI [KAPADIA. l.] 85

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 151 of2002. A
From the Judgment and Order No. 1113 of2001dated13.07.2001 of the
Customs, Excise & Gold (Control) Appellate Tribunal, South Zonal Bench at
Chennai in Appeal No. C/R-26/97/MD.

S.K. Bagaria, Rupesh Kumar and Tara Chandra Sharma for the Appellant. B
P. Viswanatha Shetty, Sunita Rao, S.J. Aristotle, Shanti Bhushan and B.
Krishna Prasad for the Respondent.

The Judgment of the Court was delivered by

KAPADIA, J. I. This civil appeal has been filed by Mis Sterlite Industries
c
(India) Ltd. under section l30E of the Customs Act, 1962 against Order No.
1113 of 2001 passed by CEGA T ("the Tribunal") on 13. 7 .200 l .

2. The short' question which arises for determination in this civil appeal
is whether Fully Automated Sequential X-ray Spectrometer is an apparatus D
based on the use of X-ray under sub-heading 9022.19 as claimed by the
Department or whether the said apparatus is classifiable as Spectrometer
under sub-heading 9027.30 being an apparatus for physical or chemical analysis.

3. To decide the above question, we quote hereinbelow the following
Heading of Chapter 90 of the Customs Tariff Act, 1975 which reads as under: E·
"CHAPTER90

OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING,
CHECKING, PRECISION, MEDICAL OR SURGICAL INSTRUMENT
AND APPARATUS; PARTS AND ACCESSORIES THEREOF - F
Tariff Description of goods Rate of duty
Item Std. Prefnl.
9022 Apparatus based on the use
of X-rays or of alpha, beta or
gamma radiations, whether or G
not for medical, surgical, dental
or veterinary uses, including
radiography or radiotherapy
apparatus, X-ray tubes and
other X-ray generators, high
H
86 SUPREME COURT REPORTS (2007] 4 S.C.R.
,.,
A tension generators, control
panels and desks, screens,
examination or treatment
tables, chairs and the like.
-Apparatus based on the
use of X-rays, whether or
B not for medical, surgical,
dental or veterinary
uses, including radiography
or radiotheraphy apparatus:

c 9022.12 -Computed tomography 300/o
apparatus

9022.13 -Other, for dental uses 300/o

9022.14 -Other, for medical, '>urgical
D or veterinary uses 300/o

9022.19 -For other uses 500/o
-Apparatus based on the use
of alpha, beta or gamma radiation,
E whether or not for medical,
surgical, dental or veterinary
uses, including radiography
or radiotherapy apparatus:

902221 -For medical, surgical, dental 300/o
F or veterinary uses ~

902229 -For other uses 500/o

9022.30 -X-ray tubes 500/o
G
9022.90 -Other, including parts and 500/o
accessories

Xxx Xxx Xxx

H CXfl.7 Instruments and apparatus for
- STERLITE INDUSTRIES (INDIA) LTD. v. COMMNR. OF CUSTOMS, CHENNAI [KAPADIA,!.]
' 87
,;

physical or chemical analysis A
(for example, polarimeters,
refractometers, spectrometers,
gas or smoke analysis apparatus);
instruments and apparatus for
measuring or checking viscosity,
porosity, expansion, surface tension
B
-;' or the like; instruments and
apparatus for measuring or
checking quantities of heat, sound
or light (including exposure meters);
microtomes c
" 9027.10 -Gas or smoke analysis apparatus 25%
902720 -Chromatographs and
electrophoresis instruments 25%
9027.30 Spectrometers, spectrophotometers
and spectrographs using optical D
radiations (UV, visible, IR) 25%

9027.40 -Exposure meters 25%

9027.50 -Other instruments and apparatus E
using optical radiations (UV, visible,
IR) 25%
r,.._ 9027.80 -Other instruments and apparatus 25%

9027.90 ~Microtomes; parts and 25%
accessories" F
"' 4. The assessee imported Fully Automated Sequential X-ray Spectrometer
from M/s Rigaku International Corporation, Japan. The said equipment is
used by the assessee in its plant at Tuticorin. The said Spectrometer was
imported for analyzing various alloys in the manufacture of Cathodes. The
assessee filed its Bill of Entry for home consumption. They claimed assessment G
under sub-heading 9027.00. They claimed the benefit of partial exemption
,.. Notification No. 46/96-Cus dated 23.7.1996. They paid customs duty (basic at
25% plus 10% additional customs duty). The Department, however, assessed
. the above apparatus under sub-heading 9022.19, quoted above, read with the
above notification and charged customs duty (basic) at 50% ad valorem plus
H
88 SUPREME COURT REPORTS [2007] 4 S.C.R.

A I 0% additional customs duty.

5. Basically, according to the Department, Spectrometer in the present
case was X-ray based Spectrometer and, therefore, the same was classifiable
in sub-heading 9022.19. According to the Department, X-ray based apparatus
stood covered under section XVlII of HSN also and, therefore, the goods I
B were classifiable under sub-heading 9022.19.
~
6. According to the assessee, in the present case, the Spectrometer in
question is specifically named in ]sub-heading 9027.30. According to the .
.)

assessee, the Department had erred in placing reliance on HSN when the
Customs Tariff Act, 1975 has specifically laid down Rules of interpretation.
c According to the assessee, Rule 3(a) of the Rules of Interpretation was t
applicable which says that the heading which provides a specific description ...
shall be preferred to headings which provide general description. According
to the assessee, under Heading 90.27 the above item Spectrometer has been
mentioned without any qualification regarding the source material and,
D therefore, the Spectrometer is based on optical source, the X-ray source was
immaterial as Spectrometer.per se was classifiable under sub-heading 9027.30.
Before us, the assessee submitted, in the alternative, for the first time, that
the above Fully Automated Sequential X-ray Spectrometer could fall under
sub-heading 9027.80 as Special Apparatus.

E 7. We have gone through the literature/brochure concerning Fully
Automated Sequential X-ray Spectrometer: We find from the brochure that tlte
above System which is imported by the assessee is multi-functional. It has
an inbuilt software. It has an inbuilt automatic analysis program. It is the
software in the System which makes the system carry. out multi-pu~pose
functions. The computer processes the data. The configurations are also
F
specified in the assembly of the Spectrometer. Prima facir; it appears that
there is an inbuilt computer system in the Spectrometer. That computer appears r·
to be an essential part of direct reading. These aspects have not been
considered by the authorities below. The catalogue/brot;hure produced
indicates that the Spectrometer in question would be non-functional without
G the computer. Modem direct reading Spectrometer incorporates a computer in
the System so that they can measure, process and analy::e the data. The
catalogue shows the configurations which indicate prima facie that the ~-

computer stands integrated with the Spectrometer. The catalogue indicates
the type of apparatus. The catalogue shows inclusion of software programmes
and computer. The catalogue shows that the Spectrometer i:. so designed that
H
STERLITE INDUSTRIES (INDIA) LTD. 1·. COMMNR. OF CUSTOMS. CHENNAI [KAPADIA. J.] 89

it functions in an integrated manner along with the computer and can be A
operated and controlled only with such computer. None of these aspects had
been considered by the authorities below including the Tribunal. Hence, we
remit the matter to the Tribunal to decide the matter de nova after examining
the catalogue annexed as Annexure-B in its records. Before concluding, we
may mention that our above opinion should not be treated as conclusive. The
Tribunal can also consider the alternative submission of the assessee, ·mmely, B
that the above item can fall also within sub-heading 9027 .80. In this regard
"we express no opinion.

8. For the above .reasons, the impugned order dated 13.7.2001 of the
Tribunal (CEGAT) is set aside and the matter is remitted to the Tribunal for C
its fresh decision in accordance with law after examining the catalogue annexed
in its record.

9. This appeal is accordingly allowed with no order as to costs.

RP. Appeal allowed. D