The Hindu Business Line : Motor vibrator regulating the flow into a screw feeder

WHAT is usually a simple thing for most of us is often complex for the taxman. One such problem was about `motor-vibrator with actuator', that came up in the Western India Plywoods Ltd vs Collector of Customs, Cochin case. Interestingly, the problem went all the way to the apex court, where Justices Ruma Pal and S. H. Kapadia decided it on October 7.

Western India had imported `a complement of pulp-making machinery for conversion of wood-chips into pulp'. The machinery had five components — defibrator, screw feeder chutes, motor vibrator with actuator, sealing water system and high temperature protection equipment.

Leaving out everything else, the taxman focussed his attention on the third component, that is, motor vibrator with actuator. The company explained that the function of the motor vibrator is "to work in conjunction with the defibrator in feeding the wood-chips into the screw feeder at a predetermined rate."

The motor vibrator works in conjunction with the defibrator, and so it constitutes an integral part of the pulp-making machinery, reasoned Western and sought classification of the item under heading 8439.91 of the Customs Tariff Act (CTA), 1975. You can see on www.cbec.gov.in, the site of the Central Board of Excise and Customs, that 8439 is titled, "machinery for making pulp of fibrous cellulosic material or for making or finishing paper or paperboard". And 8439.91, about `parts of machinery for making pulp of fibrous cellulosic material', as one learns from the judgment.

But the Department was set on classifying the said vibrator under 8479.89, that is, "machinery and mechanical appliances having individual functions, not specified or included anywhere in this chapter." A residuary provision, that is.

Defibrator, vibrator and actuator

If you're anxious to know about defibrator, Wikipedia educates that the thing is "a thermo mechanical pulping refiner in which the pulp material, such as wood chips, is ground in an environment of steam between a rotating grinding disc (rotor) and a stationary disc (stator) each with radial grooves that provides the grinding surface." Wood chips are fed into the centre and get broken down as the centrifugal force pushes them toward the circumference of the discs where the grooves are finer to produce wood fibre, it explains. The defibrator method is also known as Asplund-method, named after the Swedish engineer Arne Asplund who filed a patent on the method in 1931. "It became the key product of his company, Defibrator AB. The Defibrator trademark is now held by the Metso Corporation."

You can see images of defibrator on Google, though I wouldn't offer a similar suggestion for vibrator. For, the first meaning for the word on Encarta is, "Vibrating device: an electric device that vibrates, e.g. one used to give a massage or as a sexual aid." A straightforward definition on http://en.wikipedia.org is that vibrator is a mechanical device that is designed to generate vibrations.

"The vibration is often generated by an electric motor with an unbalanced weight (mass) on its driveshaft. If the motor is switched on, the rotating weight will resonate." The site speaks of different types of vibrator, including those in cellphones and pagers, and the ones intended to touch the body for "stimulating the nerves and giving a pleasurable feeling".

An informative `timeline history' on Binghamton University's www.bupipedream.com begins from a 1653 medical prescription for hysteria. "Vibration promotes life and vigour, strength and beauty... Vibrate Your Body and Make It Well. You Have No Right to Be Sick," appeals a 1910 ad copy posted on Wikipedia. Vibrate is about four centuries old, "From Latin vibratus, past particle of vibrare `move quickly to and fro, shake'... cf. Lith. wyburiu `to wag' (the tail), Dan. vippe, Du. wippen `to swing,' O.E. wipan `to wipe')," says Online Etymology Dictionary.

Having moved to and fro on that `v' word for long, let us find out what an actuator actually does. "One that actuates; specifically: a mechanical device for moving or controlling something," says Merriam-Webster Online Dictionary. Actuator is the part of a hard drive that the read/write arms attach to, explains www.geek.com. "It is controlled by an electrical signal sent to it that extends or retracts the arms so that they can move across the tracks on the drive platters. Nowadays the movement of these lightweight arms is very fast, appearing like a flicker if you were to view it."

When to use residuary head?

When the dispute was at the tribunal stage, the decision went against the company. In an order issued in 1999, the tribunal favoured a classification under the residuary sub-heading 8479.89. Protesting the same, the company took up the case before the Supreme Court.

After studying the details, the apex court observed that the heading in dispute was applicable "only if the machinery in question does not fall within any other heading". It is well settled that the application of the residuary tariff entry must always be made with a good deal of caution as it is attracted only when no other provision expressly or by necessary implication applies to the goods in question, said the court, citing the Bharat Forge & Press Industries (P) Ltd case.

"In the matter of classification, identification of an entity is the primary step. Identification is concerned with goods and not with the description of goods. The description would be relevant for the application of a particular tariff entry to the imported goods," said the court, distinguishing between description and identification. "In several eases, a single tariff item refers to a large number of goods of different types. It is not possible to encapsulate them in completely comprehensive titles. Therefore, the titles of sections, chapters and sub-chapters are for ease of reference."

The court noted that the tribunal had relied solely on the explanatory note to the HSN (harmonised system of nomenclature), which speaks of "vibrator motor consisting of an electric motor with eccentric discs fitted to the protruding ends of the shaft, generating radial vibrations which are transmitted to the apparatus or appliance (chutes, bins, hoppers, conveyors, compacting appliance, etc) to which the vibrator motor is fixed."

Was the tribunal right?

The basic question which was required to be examined by the tribunal was whether the entire complement of pulp-making machinery imported as a single entity constituted one single item consisting of separate components, pointed out the apex court.

"In our view, the tribunal has failed to consider the various provisions of Section XVI and chapter 84 as appearing in the CTA and in HSN," said the court. A part suitable for a particular machine is classifiable under the heading applicable to that machine; and there's "a distinction between `machinery' and `machines'," which you may like to study in the Notes. Machines used for more than one purpose have to be classified according to their principal purpose, pointed out the court.

"In the present case, the motor vibrator with actuator regulates the flow of wood-chips into screw feeder at a pre-determined rate and, therefore, it is not a prime-mover only, as held by the tribunal," reads the text of the judgment, setting aside the 1999 ruling and remitting the case back to the tribunal for a decision `in accordance with law'.

Tailpiece

"Got the bonus?"

"Bon, I'd say, after a hefty tax chop!"

Detaxification@TheHindu.co.in.

D. Murali

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