TMI Blog1989 (6) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 85.25 to 85.28 3. The appellants filed a classification list effective from 1-3-1986 in respect of the following four items : i.Coils, IF Transformers Oscillator Coils/Antenna/Aerial Coils. ii. Peaking Coils iii. Inverters/Converters Coils iv. Pulse Transfers Coils 4. Seeking approval of the classification for all the items under Tariff Heading 8529.00. The same, it is seen, was approved by the Assistant Collector by an endorsement dated 20-3-1986. Later on, however, a show cause notice dated 4-6-1987 was issued by the Superintendent of Central Excise wherein it was alleged that the appellants have mis-classified their products in their classification list effective from 1-3-1986 by seeking approval under Heading 8529.00 for a payment of duty @ 15% ad valorem when the goods fell under the specific heading 8504.00 answering to the description of items under that heading and were assessable to 20% ad valorem. They were stated to have contravene Rules 173F and 173G(I) of the Central Excise Rules 1944 for their failure to have discharged the duty under Tariff Heading 8504.00. The differential duty demand of Rs. 2,78,713.25P. for the period from December, 86 to May, 87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectrical alternating or intermittent energy from one or more circuits to one or more other circuits at the same frequency, usually with changed value of voltage and current. Auto transformer, constant current, constant-potential, coupling, current, doorknob, filament, instrument, intermediate frequency. Modulation, Output, Peaking, Power, Primary winding, Pulse, Radio frequency, Rectifier, Repeating Coil, step-down, step up, Tesia Coil, Ideal, Tuned, Variac, Variocouples, Wave guide, are also different types of transformers as defined in the dictionary of Electronics, 3rd Edition, by S.Handel. (Penguin ELBS Publication) Intermediate Frequency transformer is designed for use in an intermediate frequency Amplifier i.e. fixed tuned amplifier between the first and second detectors in a super -haterodyne receiver. Transformer is an apparatus which transforms 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 for example Radio Frequency transformers, there may be core of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed by the assessee. To think this extent it appears that there is a suppression of facts on the part of the assessee. The demand for differential Central Excise duty is required to be re-worked out on the basis of classification of assessee s products as held in this order." 9. The Assistant Collector confirmed the duty demand in terms of the Show Cause Notice. The appellants, thereafter, filed an appeal before the Collector of Central Excise (Appeals), Bombay. The Collector (Appeals) confirmed the findings of the Assistant Collector holding that the goods answered to the specific description of the items set out under Tariff Heading 8504.00. 10. The learned Consultant, for the appellants, was assisted by Shri M. Dayal, Proprietor, who informed, on a query from the Bench, that he was B.Sc. in Electronics from London University and during the course of the arguments, he explained various technical aspects relating to the goods. The learned Consultant pleaded that the appellants have not suppressed any fact and describe the same as marked. He pleaded that the classification list was approved after due verification and pleaded that changed classification as held by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants pleaded that the term transformer as generally understood, referred to transformers in the electricity supply lines. 13. In this connection, he drew our attention to the definition of the transformer as given in book - Electronic Communication by Robbert L. Shrader, McGraw-Hill Book Company at heading 5.15. The said definition is reproduced below for convenience of reference: TRANSFORMERS - One of the common components, or parts, used in electricity, electronics, and radio is the transformer. The name itself indicates that the device is used to transform, or change, something. In practice a transformer, maybe used to step up or step down voltages, to change low-voltage high-current AC to high-voltage low-current AC, or vice versa, or to change the impedance of a circuit to some other impedance in order to transfer energy better from a source to a load. In its simplest form, a transformer consists of a primary wire and a secondary wire laid side by side (Fig. 5-17). The only parts of the primary and secondary circuits to be considered are the portions lying parallel to each other." 14. In regard to coils manufactured by the appellants, he drew our attention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, is reproduced below: Intermediate Frequency Transformer - It consists of two or more windings designed to pass a specific band of radio frequencies which results from heterodyning a local oscillator signal with a radio frequency signal. 19. He also drew our attention to para 2.4 to show as to what was understood under the ISI by the term inductor , the same also, for convenience of reference, is reproduced below: Inductor (Coils) - An electromagnetic device consisting of a conductor wound in cylinderical or spiral form, or in a variation of these forms, to obtain a concentrated magnetic field parallel to the exis of the coil. 20. The appellants pleaded that even though the coils were described as transformers or inductors, it was a term used and this could not be considered to be so for the purpose of assessment under Tariff Heading 8504.00. 21. The learned Consultant pleaded that the goods were supplied to the manufacturers by the appellants and in case they have been asked to pay duty right at the very outset, then the modvat concession would have been claimed by the buyers and the appellants also would have collected the duty from them. He pleaded that dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it could be seen from the literature with the appellants (which has been reproduced above in the earlier paras) that types of the goods manufactured by the appellants were described in the literature as transformers. He pleaded that entry 8504.00 used technical terminology and there it ought to be read in the context of how the people in the technical field understood the same. In this connection, he drew our attention to the judgment of the Hon ble High Court of Bombay in the case of Chemicals and Fibres India Ltd. reported in 1982 E.L.T. 917. He stated that some demand was raised beyond the period of six months. 24. Regarding the suppression of the fact he pleaded that in case the terms like IF transformers were mentioned in the classification list there appeared to be some contraction in the Original Order regarding mis-description. He pleaded that the demand could be raised retrospectively as held by the Hon ble Supreme Court in the case of Elson Machines v. C.C.E., reported in 1988 (38) E.L.T. 571 (para 8). The said para, for convenience of reference, is reproduced below : 8. The next submission on behalf of the appellant is that the Classification Lists had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sformers as consisting of two or more windings. The preponderance of the authorities cited before us shows that the transformers can either for changing the voltage or the current strengths in the power transmission lines and can be also for bringing about changes in frequency and selection of the same for wireless transmission and reception both audio and video. We observe that tariff entry 8404.00 is comprehensive and covers all types of electrical transformers and inductors. Inductors as has been seen from the glossary of terms of ISI set out in para 19 is an electromagnetic device consisting of conductor bound in a cylindrical or spiral form. It is thus seen that the item does cover coils which are required to produce a desired result so far as the impedence is concerned and it will not, therefore, be out of place to read the scope of the term transformer to be covering also those which are for the purpose of bringing more changes in the frequency or changes in the impedence for selecting a particular frequency for feeding into the electronic circuits. There is no doubt that the electromagnetic field by which the desired changes in the frequency are brought about by the two set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on the part of the appellants. In this context the Hon ble SC in the case of Chemphar India v. C.C.E. have observed as under :- In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. In view of the above and following with respect the ratio of the Hon ble Supreme Court s judgment we hold that the longer time period cannot be invoked beyond six months for raising that demand. 27. We, therefore, partially allow the appeal of the appellants in the above terms and set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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