[Order per : V.P. Gulati, Vice President]. - These appeals involves a common issue and are therfore taken up together for disposal. The issue in the appeals is in regard to the benefit of Notification 232/83-Cus., dated 18-8-1983 as amended in respect of goods which have been variously described by the importers/suppliers at the time of importation as under :
(1) Control unit
(2) Operation/Control unit for electronic tuner
(3) Switching/Operating unit for electronic tuner.
The goods in the suppliers pamphlet have been described as control unit. As seen from the facts placed before us the authorities in respect of different importation of the goods had been following divergent assessment practice and the appellants were given the benefit of Notification 232/83 in repect of some imports and denied the benefit in respect of others. The appellants sought for refund of duty whenever the benefit was allowed. The claim of the appellants for the benefit of notification before the lower authorities was on the grounds that the goods could be taken to be covered under either S. No.1 or S. No. 11 or S. No. 20 of the Table to the notification. These serial numbers for convenience of reference are reproduced below :
(1) Resistors (other than heating resistors) and potentiometers
(11) Switches including micro switches and reed switches (upto 2 amperes at 28 Volts DC or 1 ampere at 110 Volts AC)
(20) TV Tuners.
The technical write-up about the goods in question as submitted by the appellants is as under :
The unit consists of two parts - one part consisting entirely of the switching devices SPST (single pole single throw switch) with latch release and light indicator. Each one of this SPST switching device makes and breaks contacts as and when programmes have to be changed. Each SPST switch has in turn a band switch for 3 position (VL,VH and UHF). Depending on the programme to be viewed on the TV make and break contacts has to be made for the required band. Potentiometer is also provided herein for closer tuning to the required channel.
This part of the unit consists entirely of switching devices necessary for ‘break and make contacts’ with added advantage necessary for tuning through the medium of potentiometer. The other part carries in it the main switching device (SPST) to connect the TV to the Electricity mains. In addition obviously for the operational convenience the manufacturer has chosen to incorporate five controls which are in the nature of regulator for Volume, Brightness, contrast, colour and tone which again use potentiometer as the regulating medium.
Thus both the party contain one or more switching mechanism and also regulatory devices. The two together form a module which has been variously described in the manufacturers’ catalogue and invoices as indicated above in Para 1. Thus the whole unit has to be imported as a composite unit. The essential function of the unit being as a switching device for various operations which are transmitted to the tuner device fitted separately in conjunction with the circuit board. The operating unit is connected to the tuner with connectors which has also been imported along with the unit.
These switching device imported a composite device satisfied all the requirements of ampere and volts as per specifications shown in Sl. No. 11 and Sl. No. 10 of the relevant notification and the DLT essentiality certificate respectively.
2. The ld. Advocate for the appellants Shri K. Narasimhan has pleaded that for the purpose of claim of the notification in question he is primarily confining his pleas only for consideration of the goods as switches in terms of the description at S. No. 11 of the table to the notification as above. He pleaded that in the suppliers invoices goods have been described as operation control switches or control operating units and these are operating unit for electronic tuner. In this connection he referred us the pamphlet filed before us and pointed out that the composite unit imported incorporated switches i.e. make and break switches and other channel changing switches and also for brightness, colour, tone-control and each unit had a PCB for adjustment of signal of VHF of low to high frequencies. He pleaded that while the electrical ratings of the unit is not indicated, the position regarding the same for the purpose of claim under S. No. 11 has not been disputed when claim for benefit under this Serial No. was made. Explaining the position in regard to the use of the operating control in question he stated that a number of switching mechanisms were provided in the unit for selection of the channel and for different channels the different switching points are provided. The channel selection he explained was done by adjustment of the position for each channel as provided for in this mechanism. The control was connected to the tuner for ultimate reception of a particular channel in the TV. He has pleaded that the basic function of the mechanism was switching system and notwithstanding other features it should be treated as a switching mechanism. In the end he made a faint plea that the control mechanism should be treated as a part of the tuner. He also urged that if the item is not considered as a switch then there is no other switch for which the appellants could claim the benefit for manufacture of TV and so far as the appellants are concerned they will be denied the benefit in respect of switches which is intended to be given for TV manufacturers and the entry at S. No. 11 will become redundant so far as the manufacturers of TV are concerned. The appellants also submitted written submissions in which it has been urged as under on the points sought to be pressed.
I. They do not press for claim earlier made under Sl. No. 1 as “potentiometer” referred to in the Notification No. 232-Cus., dated 18-8-1983.
II. Their first contention is that “Operating Unit” is nothing but few “Switches” within the meaning of Sl. No. 11 of the table to the aforesaid exemption notification even though the said unit incorporates such components as a “memory”and “potentiometer” which are essential for the function of any multi-channel colour TV switching device fixed separately on the frontal side as a panel away from the “Tuner”. Whereas the latter is mounted inside the TV on the printed circuit board but connected with the switching device through “connectors” supplied along with it. The essentiality certificate issued by the DGTD for each import gives further support to the “Operating Unit” being covered only under Sl. No. 10 of the essentiality certificate (corresponding to Sl. No. 11 of the notification table). If Sl. No. 10 is not to cover the impugned “Operating Unit” that entry cannot cover any other component/part of a colour TV as none of the other essential components are even remotely connected with a switching device.
III. The second and the alternative contention is based on plea that a colour TV Tuner for a colour TV denotes a composite article consisting of two modules with interconnecting device each of which can be imported separately and interconnected only when the TV set is asembled. On this premises the “Tuner Module” having been cleared at the lower rate, the same dispensation should be given to the module forming the operating or controlling unit which has no independent function but functional only with the tuner module.
3. The ld. SDR for the department pleaded that the goods imported are not a make and break mechanism but something much more. It has arrangement incorporated therein for regulating various parameters and therefore it cannot be called a switch. It has incorporated therein an arrangement to switch the TV on and off, controls for various purposes and also channel switch. He pleaded admittedly tuner as such had not been imported.
4. The ld. Advocate for the appellants in rejoinder stated that the item imported was in the form of tuner, connector and PCB as separate items.
5. We have considered the pleas made by both the sides. The main plea for which the arguments have been adduced is that the items imported should be treated as a switch for the purpose of benefit of Notification No. 232/83-Cus. and the goods can be taken to fall under S. No. 11 of the table to the notification for the purpose S. No. 11 as reproduced in earlier paragraphs covers switches including micro swiches and reed switches (upto 2 amperes at 28 volts DC or 1 ampere at 110 volts AC). We observe that the suppliers themselves have not described the goods as a ‘switches’ and the same have been held out variously as a control unit or operating/control unit for electronic tuner or switching/operating unit for electronic tuner. The switching devices are built into the unit and one of the switch incorporated in the arrangement imported is on and off switch which makes and breaks the electrical circuit for the power supply to the TV. Apart from this channel switching and adjusting mechanism is also provided and also controls for regulating the volume, brightness, contrast and colour tone are also incorporated. The necesarry potentiometer arrangement is also incoporated and some of the functions of channel selection are carried out through a printed circuit board. The channel selection arrangement is linked to the tuner which is mounted on a Printed Circuit Board inside the TV. From what the appellants have brought on record it is seen that what has been imported is an arrangement which has been described as a control unit which controls a number of parameters for the purpose of operation of the TV. It has the necessary circuitry provided for the purpose for each of the functional control sought to be done by this. This arrangement is also linked to tuner for the purpose of getting the reception for a particular channel. For the purpose of the control functions as discussed above some switching mechanisms have been provided. The question that has to be answered is whether by reason of the provision of the switching mechanisms the whole arrangement imported can be considered as a switch. The term switch in McGraw Hill Dictionary of Scientific and Technical terms (Second edition ) has been defined as -
‘A manual or mechanically actuated device for making, breaking or changing the connection in an electric circuit’.
Switching device in the same dictionary has been defined as an ‘Electrical or mechanical device or mechanism which can bring another device or circuit into operating and non-operating state’.
6. The notification in question it is seen envisages concession for switches per se including for micro switches and reed switches having a rating upto specified limits. The goods imported as it is are not described as switches and at best these can be taken to have switching mechanism incorporated in it for performing switching function along with other control function. The notification benefit can be given in respect of items which answer to the description ‘switches’. The item imported as discussed above performs a number of functions and switching is done as a part of those functions. As it is as required in the notification no amperage rating or voltage rating has been assigned/prescribed for this mechanism as a whole which is a requirement of the notification in question for the purpose of exemption to the item of switches. The control mechanism in our view as imported as such cannot be considered as a switch but a multifunctional device essentially performing a number of control functions. We therefore hold that the plea of appellants for consideration of the item as a switch has no force and we dismiss the same.
7. The next point in respect of which the ld. Advocate did make arguments in detail is that the control imported is linked to the tuner module inside the TV and therefore it should be considered as a part of tuner module. As we have held above the item imported performs multiple functions and it cannot be considered as a tuner module by itself. The channel selection mechanism in this is linked to the tuner.
8. The tuner as described in the McGraw Hill Encyclopaedia of Science & Technology in the case of Monochrome Receivers is described as under :
Tuner. The tuner of a television receiver selects the desired channel and converts the frequencies received to lower frequencies within the passband of the intermediate-frequency amplifier. For very-high-frequency (vhf) reception the tuner generally has 12 discrete positions, corresponding to channels 2-13. For ultra-high-frequency (uhf) reception, continuous tuning is employed. Nearly all vhf tuners employ a radio-frequency (rf) amplifier, a mixer, and local-oscillator circuits arranged as shown in Fig. 1. In uhf tuners the rf amplifier is sometimes omitted because of the difficulty of obtaining low noise amplification at uhf. The rf amplifier may be cascode, tetrode, or pentode. In general, the cascode circuit provides superior results.
The mixer and local-oscillator circuits may employ separate tube envelopes or may be combined in the same glass envelope. The received signal and the local oscillator signal are applied to the mixer. Difference frequencies, representing the picture and sound carriers, are produced and remain essentially constant as the rf amplifier, mixer and oscillator circuits are tuned to the different channels. Known as intermediate frequencies (41.25 MHz for sound and 45.75 MHz for picture), they are available for further amplification. The correct oscillator frequency is approximately set at the time of channel selection. A fine adjustment is provided to permit more accurate tuning.
Such performance characteristics as noise factor, gain, bandwidth, and oscillator radiation must be optimized in the design of the tuner.
The schematic diagram or Block diagram of the receiver as given therein is as under :
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In the same book under the heading controls following is set out : Controls. Certain controls are available to the user for adjustment of the receiver. These are the audio volume, channel selector, fine tuning, brightness, contrast, horizontal hold, and vertical hold controls. Other controls, normally mounted on the rear of the chassis or under a removable panel, include height, width, and linearity controls. The ON-OFF switch for the receiver is frequently mounted on the same shaft as the audio volume control, which controls the gain of the audio channel. The channel selector adjusts the tuner’s selective circuits for optimum performance at the desired channel, and fine tuning is a vernier control for the frequency of the local oscillator. Brightness is usually a manual adjustment of the bias on the electron gun in the picture tube. The contrast control adjusts the level of the video signal, by some such means as a variable resistor in the cathode circuit of one of the video amplifier stages. The horizontal and vertical hold controls adjust the free-running frequencies of the horizontal and vertical oscillators to achieve the most reliable synchronization with the incoming signal. In both cases, the controls may actually consist of variable resistors in the grid circuits of the respective blocking oscillators. Vertical linearity is gererally controlled by a variable resistance in the grid circuit of the vertical output stage, and picture height may be controlled by a variable resistor in the plate circuit of the vertical blocking oscillator. The width control may be a variable resistor in the screen grid circuit of the horizontal output tube, and horizontal linearity may be controlled by a variable inductor placed between the damper tube plate and the source of plate voltage. In case of colour receivers the block diagram is similar and tuner figures right at the point of the receipt of the signal and relevant portion of the block diagram is reproduced below :
In regard to the colour TV receivers the following is set out thereunder : Overall color receiver. A simplified block diagram for a color television receiver is shown in Fig 3. Since many of the circuits in a color receiver are the same in principle as the corresponding circuits in a monochrome receiver, it is unnecessary to redescribe them in detail. It is important to recognize, however, that all circuits handling the complete color signal must be designed for high performance standards. Because the chrominance information is received in the form of sideband occupying the upper portion of the video spectrum (centered on approximately 3.6 MHz), it is necessary that the antenna, tuner, i-f amplifier, and video detector be designed to handle the full 4 MHz bandwidth provided in the broadcast transmission standards if degradation of the color information is to be avoided. As regards controls for colour TV’s the following is set out in the same book : Controls. In addition to the same controls required for monochrome receivers, color receivers normally have controls for convergence, hue and saturation. The convergence controls considered servicing adjustments only, adjust the relative amplitudes and phases of the signal components that are added together to form the proper wave-forms for the convergence yoke. The hue control usually adjusts the phase of the burst-controlled oscillator and alters all the colors in the image in a systematic manner comparable to the effect achieved when a color circle diagram is rotated in one direction or the other. The proper setting for the hue control is normally determined by observing skin tones on actors and actresses. The saturation control, frequently labeled chroma or simply color, adjusts the gain of the chrominance circuits relative to the monochrome channel and controls the saturation or vividness of the reproduced colors. When this control is set too low, the colors are all pale or pastel, and when it is reduced to zero, the picture is seen in black and white only. 9. A perusal of the above shows that channel selection mechanism functions in relation to the tuner. But the module in question in addition to the channel selection mechanism has other controls incorporated therein. The question therefore to be considered is whether when the tuner module or the module in question are imported together these can be considered as one mechanism i.e. TV tuner for the purpose of benefit of notification in question. The authorities below have not examined the issue in the above context. For examination of the issue in the above light the aspects relevant for consideration would be whether by reasons of other controls incorporated in the module in question it could be considered as a channel selector alone for the purpose of tuner. For this purpose it will have to be considered as to what function gives the module essential character and what those who deal with it view it as. We observe that there are rapid scientific advances taking place and for the purpose of classification of goods these cannot be ignored. When a degree of sophistication is achieved new modules combining a number of functions may be formed. For reasons of advances made unless it could be shown that the character of a particular functional module has been so radically changed that it cannot be considered as a part of a specified functional module the benefit as envisaged should not be denied. 10. The observation of the Hon’ble Supreme Court in this regard made in their judgment reported in 1996 (82) E.L.T.162 have to be borne in mind. We also observe that benefit of notification has been given to give a philip to the electronic industry and since this is a beneficial price of legislation it should be interpreted in a manner that the purpose of the notification is not defeated because of some sophisticated arrangement has emerged. In sum what is required to be done is a re-examination of the issue as to whether the module in question when imported with the item which is described as a tuner can be considered together with the same as a tuner in the light of our observations above. However if it is imported separately the question of benefit of Notification would not arise. 11. In view of the above while we reject the plea of the appellant that the item should be considered as a switch for the purpose of Notification in question, we remand the matter to the ld. lower appellate authority for reconsideration of the matter for grant of the benefit in case the item is imported along with the item described as tuner in the light of our observations above. The appeal is therefore decided in the above terms.
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