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Issues involved: Classification of imported goods u/s Customs Tariff Act, demand of differential duties u/s Customs Act, application of Section Note 5(a) to Section XV of the Tariff Schedule.
Classification of imported goods: The appellant imported "Rabble Arm for MHF" and initially cleared it under sub-heading 7506.20 of the Customs Tariff Act based on the supplier's technical write-up and test certificate. However, a Show-cause notice was issued later proposing to reclassify the goods under sub-heading 7325.99 due to a revised test certificate provided by the importer. The notice claimed that the goods should be classified under sub-heading 7325.99 as per Section Note 5(a) to Section XV of the Tariff Schedule, which requires classification based on the metal predominating by weight. The original authority and the first appellate authority upheld the reclassification, leading to the appellant's appeal. Application of Section Note 5(a) to Section XV of the Tariff Schedule: The Tribunal examined the test report provided by the importers, which showed that iron was the predominant component in the imported goods. Referring to Section Note 5(a) regarding the classification of alloys, the Tribunal concluded that the goods should be classified as an alloy of the metal which predominates by weight over each of the other metals. Since iron was the predominant component, the goods were classified under sub-heading 7325.99. The Tribunal noted that the goods were chargeable to Basic Customs Duty (BCD) at 35% and Special Additional Duty (SAD) at 8% under this classification at the time of filing the Bill of Entry, and upheld the demand for differential duties from the appellant. Conclusion: The Tribunal dismissed the appeal, affirming the reclassification of the imported goods under sub-heading 7325.99 based on the predominance of iron as per the test certificate. The decision to demand the differential amounts of BCD and SAD from the appellant was upheld, considering the applicable rates at the time of import.
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