2004 (4) TMI 364 - AT - Customs

Summary

Issues:
Classification of imported goods under Customs Tariff schedule - Benefit of Notification No. 118/86-Cus. - Application of Rule 2 of the Accessories (Condition) Rules, 1963 - Proper classification of accessories to main equipment.

Classification of Goods:
The appeal challenges the classification of imported goods under sub-heading 9031.80 of the Customs Tariff schedule and the grant of benefits under Notification No. 118/86-Cus. The Tribunal found that the Commissioner (Appeals) did not properly examine the classification of the product under Heading 90.17 in the first round of litigation. The present appeal is against the order passed by the Commissioner (Appeals) in response to the remand order. The Commissioner (Appeals) classified the goods under Heading 9031.80 as other measuring equipment and granted the benefit of the notification based on the plea that the components imported along with the basic machines are part of a complete set necessary for operation.

Application of Rule 2 of Accessories (Condition) Rules, 1963:
The main ground raised by the Revenue was the failure to apply Rule 2 of the Accessories (Condition) Rules, 1963, which states that accessories and spare parts shall be chargeable at the same rate of duty as the article if certain conditions are met. The Revenue argued that the accessories imported were separately invoiced and not included in the main equipment's value, thus should not be charged at the same rate of duty. The Commissioner (Appeals) classified the main equipment along with all accessories under sub-heading 9031.80 by applying Rule 2(a) of the Interpretative Rules. However, the Tribunal noted that the Accessories (Condition) Rules, 1963, relevant to the duty rate of accessories, were not considered in the impugned order. As a result, a second remand was ordered for the Commissioner (Appeals) to re-examine the matter in light of the relevant rules and legal provisions to ensure a proper classification.

Conclusion:
The Tribunal allowed the Revenue's appeal by remand, emphasizing the importance of considering the relevant rules and legal provisions in classifying imported goods and their accessories. The case was remanded to the Commissioner (Appeals) for a fresh decision within three months to bring finality to the matter, which pertained to imports from a decade ago.