2005 (12) TMI 509 - AT - Customs

Classification of goods - Exemption Notification No. 23/98-Cus. - Piston Ring Set imported by the respondents herein for use as components/parts of engines of Shakti Power Tillers - Held that - it is very clear that the Tiller manufacturer has classified tillers under Chapter heading 84.32 and therefore, until that classification is altered is not permissible for the Customs authorities to change the classification of Tillers from Chapter heading 84.32 to Chapter 87 so as to hold that the imported items are parts of engines used for propulsion of vehicle falling under Chapter heading 87 - appeal dismissed.

Summary

Issues:
Interpretation of Notification No. 23/98-Cus dated 2-6-98 regarding concessional rate of duty for imported goods under specific headings.

Analysis:
The judgment pertains to an appeal by the Revenue against the order of the Commissioner (Appeals) extending the benefit of Notification No. 23/98-Cus to imported Piston Ring Sets for use in engines of Shakti Power Tillers. The Notification grants a concessional rate of duty at 20% to goods under specific headings, excluding parts of certain goods. The imported items are classified under Chapter Heading 8409.00, falling within the specified headings. The Department argues that the imported parts are used in diesel engines for vehicles falling under Chapter Heading 87. However, the Tribunal notes that the Tiller manufacturer has classified tillers under Chapter Heading 84.32, and until that classification changes, Customs authorities cannot alter the classification to consider the imported items as parts of engines for vehicles under Chapter Heading 87. Additionally, the Tribunal finds that the engines in question are for hand tillers, not vehicles, further supporting the exclusion from the specified category under the Notification.

The Tribunal concludes that there is no error in the Commissioner's order and upholds the decision, rejecting the appeal by the Revenue. The judgment emphasizes the importance of accurate classification and the specific criteria outlined in the Notification for determining the eligibility for concessional rates of duty. The analysis underscores the significance of proper classification and the need for Customs authorities to adhere to the classification provided by manufacturers unless altered officially. The judgment clarifies that the imported goods do not fall under the excluded category specified in the Notification due to the classification of the tillers and engines in question. The decision highlights the need for consistency in classification and the requirement for Customs authorities to base their determinations on accurate classification information provided by manufacturers.