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Cce Vs. Dynamatic Hydraulics Ltd. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT
Decided On
Judge
Reported in(1998)(75)LC656Tri(Bang.)alore
AppellantCce
RespondentDynamatic Hydraulics Ltd.
Excerpt:
.....by the collector (appeals), madras, who has held that the impugned product namely, "dynamatic hand pump" is classifiable under sub-heading 8413.00 of ceta, 1985 in terms of claim made by the assessee. he has set aside the assistant collector's finding that the dynamatic hand pump is basically used as a mechanical device in lifts, hoists and lifting platforms. the assistant collector had further held that the item plays the assigned rule by accumulating fluid at high pressure which is ensured by repeated pumping by hand. the resultant hydraulic force is used in moving the lifts, hoists and lifting platforms. the assistant collector has noted the explanatory notes to hsn (page 1317) wherein it has been explained that the hydraulic accumulator which keeps in reserve the amount of.....
Judgment:
1. This is a Revenue appeal against the order dt. 6.11.1989, passed by the Collector (Appeals), Madras, who has held that the impugned product namely, "Dynamatic Hand Pump" is classifiable under sub-heading 8413.00 of CETA, 1985 in terms of claim made by the assessee. He has set aside the Assistant Collector's finding that the Dynamatic Hand Pump is basically used as a mechanical device in lifts, hoists and lifting platforms. The Assistant Collector had further held that the item plays the assigned rule by accumulating fluid at high pressure which is ensured by repeated pumping by hand. The resultant hydraulic force is used in moving the lifts, hoists and lifting platforms. The Assistant Collector has noted the Explanatory Notes to HSN (page 1317) wherein it has been explained that the Hydraulic Accumulator which keeps in reserve the amount of liquid under pressure in order to give an even rate of flow or feed pressure to hydraulic machinery is to be classified under heading 84.79. Therefore, the Assistant Collector held that the impugned product i.e. dynamatic hand pump has a similar role to play and therefore, it merits classification under Chapter sub-heading 8479.00 (machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter) chargeable to duty of 15% ad valorem. In terms of the order of the Assistant Collector also confirmed differential duty at 15% ad valorem on the clearance of the said item effective from 25.8.1988 to 24.2.1989 under Section 11A or CEA, 1944.

2. The Collector (Appeals) has noted that the Explanatory Note under Section XVI on page 1317 under (III) Miscellaneous Machinery covers "Hydraulic accumulators for keeping in reserve and amount of liquid under pressure in order to give an even rate of flow or feed pressure to hydraulic machinery". He has held that this would indicate that hydraulic accumulators to attract classification under heading 84.79, should be one intended to work in conjunction with the hydraulic machinery. He has held that it is not the contention of the lower authority that the impugned goods work in conjunction with the hydraulic machinery. On the other hand, he took the Explanatory Notes of the appellants that the item functions only as a hand pump and drives force only from a human hand and therefore, he upheld the assessee's claim for classification under sub-heading 8413.00 of CETA, 1985 which covers "pumps for liquids whether or not fitted with a measuring device; liquid elevator" and therefore, he has granted the benefit of the Notification No. 64/86 dt. 10.2.1986 which carries nil rate of duty.

3. It is the contention of the Revenue that the impugned item is basically used as a mechanical device in lifts, hoists and lifting platforms and it has got a similar function as that of hydraulic accumulator which keeps in reserve the amount of liquid under pressure in order to give an even rate of flow or feed pressure to hydraulic machinery and hence it is correctly classifiable under Tariff sub-heading 8479, which has a machine or mechanical appliance having individual functions, not specified or included elsewhere in this chapter. It has also been contended that the Section Notes to Chapters 84 and 85 clarifies that the word machines includes any plant, equipment, apparatus or appliances cited in the heading of Chapter concerned and therefore, the Collector's finding that in order be attract classification under Chapter heading 8479, the item should work in conjunction with hydraulic machinery alone.

4. We have heard the Learned SDR, Shri D.S. Negi for the Revenue and Shri Rajesh Jain, the Learned Advocate for the assessee. Both of them reiterated their points.

5. We have gone through the written submissions and the technical note filed by the assessee. The technical pamphlet pertaining to the item states that the dynamatic hand pumps are made in technical collaboration with DOWTY, word leader in hydraulics. They are robust and easily maintained units which give a long life of trouble-free service. Two hardened steel pistons operating in cast-iron cylinders create pressure at each stroke of the handle. The unit incorporates a relief valve, with a setting range of 1000 to-2525 psi (69 to 174 bar) and a manually operated pressure release valve. It further states that a special feature, which considerably facilitates maintenance, is that the pistons have no rubber seals. The unit can be supplied with or without reservoir. It further states that the pump has multifarious applications. As a mechanical handling device in lifts, hoists and lifting platforms. The same can be used for hydraulic jacks and props.

For machine tools and pressures. For tube-bending and crimping tools.

And for pressure testing.

6. The definition of the pump and accumulator is given in McGraw Hill Dictionary of Scientific and Technical Terms states: PUMP: A machine that draws a fluid into itself through an entrance port and forces the fluid out through an ex- haust port.

ACCUMULATOR: A device such as a bag containing pressurised gas, which acts upon hydraulic fluid in a vessel, dis- charging it rapidly to give high hydraulic power, af- ter which the fluid to return to the vessel with the use of low hydraulic power.

7. It has been explained that Chapter heading 8413 covers pumps for liquids, whether or not fitted with a measuring device: liquid elevators. It is stated that all pumps for liquid and liquid elevators fall under this heading. Hand pump is unambiguously specified and included in this heading only and covered by the Notification and exempted from payment of duty. They state that hand pump is known in both commercial and common parlance as Hand Pump. They further state that the function of a pump is to move fluids by the application of force by an external prime mover. In the case of power driven pumps, the force is supplied by an electric motor or an engine while in the case of Hand Pump the force is supplied by human hand. The pump, by itself, without an external source of force is not capable of doing any work. It is stated that the hydraulic accumulator on the other hand is a device for storing hydraulic energy and releasing it on demand and its use is to smoothen the demand fluctuation in a hydraulic circuit.

The hand pump is incapable of doing this function since it can neither store energy nor release it on demand automatically. A hand pump cannot therefore be considered a hydraulic accumulator as the function of the latter is to provide stability to the pressure in a hydraulic apparatus while the function of a Hand pump is to give force to liquids. It is stated that the accumulator is not driven by a prime mover. The hand pumps like any other pumps have to be operated by an external prime mover which in the case of Hand pump is the human hand. It is stated that the weighted piston in a hydraulic accumulator is a free floating piston which moves up and down with a change in hydraulic pressure. A hand pump will work with or without a reservoir, which is only a container from which liquid is to be pumped out by this hand pump. It has no free floating piston. It is stated by the assessee that their hand pump does not fall within the ambit of hydraulic accumulator. They state that their hand pump is not capable of keeping fluid under pressure in reserve i.e. outside the system and even when the pump is mounted on a reservoir container the fluid in the reservoir is not under pressure. They state that their item is not a pump fed cylinder.

It is in fact a pump simpliciter and hence even according to the Explanatory Notes to HSN their hand pump is not an accumulator.

8. They have already given technical write-up on accumulator and accumulator circuits which has been perused by us. This states that the hydraulic accumulator is a device which stores the potential energy of an incompressible fluid held under pressure by an external source against some dynamic force. This dynamic force can come from three different sources; gravity, mechanical springs, and compressed gases.

The stored potential energy in the accumulator is a quick secondary source of fluid power capable of doing useful work as required by the system.

9. It further states that there are three types of accumulators used in hydraulic systems. They are identified as follows: The weight-loaded type is historically the oldest. This type consists of a vertical heavy wall steel cylinder which incorporates a piston with packings to prevent leakage. A dead weight is attached to the top of the piston (see Fig. 9.27). The force of gravity of the dead weight provides the potential energy in the accumulator.

This type of accumulator creates a constant fluid pressure throughout the full volume output of the unit regardless of the rate and quantity of output. In the other types of accumulators, the fluid output pressure decreases as a function of the volume output of the accumulator. The main disadvantage of this type of accumulator is its extremely large size and heavy weight, which makes it unsuitable for mobile equipment. In this section we shall present the various types of accumulators and several of their common applications. The sizing of gas-loaded accumulators for given applications will be covered in Chapter 10. This will be done after Boyle's law of gases has been discussed."Fig. 9-27. Weight-loaded Fig. 9-28. Spring-typeaccumulator. (Courtesty of accumulator. (courtesy ofGreer Olaer Products Division/ Greer Olaer Products Division/Greer Hydraulics. Inc.

Greer Hydraulics. Inc.Los Angeles, california) Los Angeles, california) A spring loaded accumulator is similar to the weight-loaded type except that the piston is preloaded with a spring, as illustrated in Fig. 9.28. The spring is the source of energy which acts against the piston, forcing the fluid into the hydraulic system. The pressure generated by this type of accumulator depends on the size and preloading of the spring addition, the pressure exerted on the fluid is not a constant. The spring-loaded accumulator typically delivers a relatively small volume of oil at low-pressures. Thus they tend to be heavy and large for high-pressure, large-volume systems. This type of accumulator should not be used for applications requiring high cycle rates because the spring will fatigue and lose it elasticity. The result is an inoperative accumulator.

Gas-loaded accumulator (frequently called hydropneumatic accumulators) have been found to be more practical than the weight and spring-loaded types. The gas-loaded type operaters in accordance with Boyle's law of gases, which states that for a constant temperature process, the pressure of a gas varies inversely with its volume. Thus, for example, the gas volume of the accumulator would be cut in half if the pressure were doubled. The compressibility of gases accounts for the storage of potential energy. This energy forces the oil out of the accumulator when the gas expands due to the reduction of system pressure when, for example, and actuator rapidly moves a load.

10. The definition of hydraulic accumulator appearing in "An Elementary Scientific and Technical Dictionary" by W.E. Flood at page 181 is reproduced hereinbelow: Hydraulic accumulatorA container in which water is stored for use in driving hydraulic (water-driven) machines. An engine-driven pump continuously pumps water into the accumulator, raising the heavy weights W. The water can be rune out for use through the pipe P. In this way a small pump, working continuously, can provide much water under pressure for use a little at a time.

11. The definition of the same term in New Mechanical Dictionary at page 353 is also reproduced hereinbelow: Hydraulic Accumulator. Its use is to secure a uniform pressure of water in a reservoir by weight, so that however much or little of this water is used, the pressure will remain constant. The accumulator is used in conjunction with a pump, working steadily, and capable of supplying a number of machines, working intermittently, the power being stored up in raising the accumulator to its full stroke. Thus, three machines, working intermittently for one minute each out of five, and each requiring ten horse power during that period can be handled easily by a pump with a continuous output of only six horse power.

12. The definition of hydraulic accumulator appearing in Chambers Science and Technology Dictionary at page 441 is also noted hereinbelow: Hydraulic accumulator. (Aero., Eng) A weight-loaded or pneumatic device for storing liquid at constant pressure, to steady the pump load in a system in which the demand is intermittent. In aircraft hydraulic systems an accumulator also provides fluid under pressure for operating components in an emergency, e.g. failure of an engine driven pump.

13. On a reading of the entire literature, it is clear that the item is question does not fall within the ambit of hydraulic accumulator.

Therefore, the classification to be adopted under heading 8479 as "machine and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter" gets excluded in terms of the Explanatory Notes to HSN (page 1317) referred to by the Assistant Collector. As the said Explanatory Notes refers to hydraulic accumulators, while in the present case the item not being a hydraulic accumulator but only a hand pump which has got a specific entry under heading 84.13 therefore the claim of party is required to be accepted.

There is no infirmity in the order of the Collector (Appeals), hence accepting the plea of the assessee on the basis of the write-up and the technical details furnished, the appeal is therefore, rejected.


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