By TIOL News Service

MUMBAI, JAN 21, 2016: THE appellant is manufacturer of various types of pumps which includes industrial pumps. They also manufacture 'base frames' which are used for mounting of such pumps. Revenue contention is that 'base frame' would be classifiable under 8485.90 while the appellant claims that these are classifiable under 8413.90. On the first occasion the Tribunal had remanded the matter to the Commissioner (A) to re-examine the classification.

As the Commissioner (A) maintained the Revenue view, the appellant is before the CESTAT for the second time.

Producing the photographs of the different types of pumps manufactured, the appellant submitted that in case of big size pumps, it is essential that these were mounted on heavy frame so that vibration does not spread; that for different models of pumps they have different base frame and thus even base frames are not interchangeable from one model to other;therefore, these would be correctly classifiable under 8413.90 and not under 8485.90 since the same is a residuary heading.

The AR submitted that the appellants are selling the pumps without base frame to many customers and also with base frames to others which indicates that the base frame is not an essential part of the pump set; that it may be called an accessory and, therefore, classification under 841390 is ruled out; that HSN explanatory notes under 8485 would indicate that base plates are specifically covered under 8485 and hence the correct classification of the base frame which are similar to base plates would be under 848590.

After considering the submissions made by both sides, the Bench observed -

+ It is seen from the purchase order received from Bokaro Steel that the purchase order speaks of centrifugal pump, in addition to the said pump it speaks of few items such as base frame, mechanical seal, cufflings etc. The purchase order gives separate value for the base pumps and separate value for other items. The base frame with foundation bolts is found as a separate item with separate value.

+ Even in the invoice produced, we find the appellant is charging for the pump separately and certain other items such as base frame separately.

+ From the above facts it is clear that the base frame is not an integral part of the pump but is an accessory which helps in efficient functioning of the pump. It is only because the item is a not an integral part of the pump that it is not sold in composite prices of the pump but separately as different item in the invoice. In view of this factual position, we are of the view that the base frame cannot be considered as part of the pump.

+ We note that part of the pump are classifiable at the relevant time under CSH 8413 and Note under the said heading for the parts of the pump is as under:-

"PARTS

Subject to the general provisions regarding the classification of parts (see the General Explanatory note to Section XVI), parts of the goods of this heading are also classified here e.g. pump housing or bodies; rods specially designed to connect and drive the piston in pumps placed at some distance from the prime mover (e.g. pumping rods, sucker rods); pistons, plungers, canes; cams (lobes helicoidal screws, impeller wheels, diffuser vanes; buckets and bucket-fitted chains; bands for band type liquid elevators; pressure chambers."

+ It would be seen that base frame is not one of the items listed therein . Moreover, it would be seen from the list that various parts which are listed therein forms the integral part of the pumps and are not being invoiced separately even by the appellant.

After extracting the heading & the HSN explanatory note appearing under heading 8485, the Bench concluded -

+ A combined reading of the above would indicate that 8485 covers certain parts which are used in a wide variety of machines but are not included by specific names under Chapter 84 in other headings (e.g. ball bearing). Moreover, the said explanatory notes specifically include base plates under 8485. Base plates by very nature would also include base frame and thus would be covered by 8485.90. Base plates and base frames are designed keeping in view the machine or mechanical appliances to be mounted on it. As discussed earlier the base frame is not an integral part of the pump, it is only an accessories to the pump. Even the appellant sells the pump without base frame, as also with base frame. Whenever he is selling along with base frame, its price is separately charged. Keeping in view the above facts in our considered view, the base frame would be classifiable under 8485 and not 8413, irrespective of the fact that such base frames are designed for specific model of the pumps.

The appeal was dismissed.

(See 2016-TIOL-228-CESTAT-MUM)