2002 (9) TMI 350 - AT - Customs

Summary

Issues:
Classification of second hand dye vats imported by the appellant.

Analysis:
The appellant imported second hand dye vats and declared them under two categories. The first category was classified under Heading 8451.40, while the second category was classified under Heading 7326.90. After importation, the appellant contended that the second category should also be classified under Heading 8451.40. The original authority rejected the refund claim, stating that the items were without circulation and considered general use machinery, leading to their classification under Heading 7326.90. However, the Commissioner (Appeals) allowed the appeal, finding that the vats were identifiable for use in the Coir industry and not of general use. The department appealed this decision, and the CEGAT remanded the matter to the Commissioner (Appeals) for specific reasons for classification under Heading 8451.40. In the subsequent proceedings, the Commissioner (Appeals) classified the items under Heading 7326.90, stating they were not machines as known in trade. The appellant appealed this decision.

The Tribunal found that the remand order was for a limited issue of classification under Heading 8451.40, but the Commissioner (Appeals) went beyond the remand proceedings by classifying the items under Heading 7326.90. The Tribunal referred to the Machinery Committee Report of 1922, which emphasized the test for machinery as being adopted for use in an industrial concern. Applying this test and Customs Tariff Act Section XVI Note 4, the Tribunal concluded that the imported vats for the Coir industry should be classified under Heading 8451.40. The Tribunal also highlighted the importance of HSN head notes under 8451 and the specific use of the vats for treating textiles in the Coir industry. It noted that the Commissioner (Appeals) did not provide sufficient evidence for his classification under Heading 7326.90 and failed to consider the applicability of Note 4 to Section XVI of the Tariff.

Regarding the choice between Headings 7326.90 and 8451.40, the Tribunal determined that the latter classification should be preferred based on Section XV Note 1, Chapter XVI Note 4, and Interpretation Rule 3(c. Therefore, the Tribunal set aside the Commissioner's order and classified the entities under Heading 8451.40, ordering any consequent relief as per law. The appeal was disposed of accordingly.