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Issues:
Classification of imported goods under a specific Customs Tariff Schedule heading, eligibility for concessional rate of duty under Notification No. 350-Cus., whether imported goods qualify as "parts" within the meaning of the Notification. Analysis: The judgment by the Appellate Tribunal CEGAT New Delhi involved a dispute regarding the classification and duty rate applicable to imported goods described as "Forged Stubs" used for fixing boilers. The appellants claimed the benefit of a concessional duty rate under Notification No. 350-Cus., dated 2-8-1976, which allowed for duty exemption on parts required for the assembly or manufacture of specific articles listed in the Customs Tariff Schedule. The goods in question were intended for use in the assembly or manufacture of boilers falling under Heading No. 84.01/02 of the Customs Tariff Schedule, fulfilling the conditions set out in the Notification. The goods were initially assessed under a different heading of the Customs Tariff Schedule, namely Heading 73.33/40, without applying the benefit of the exemption Notification. The party's refund claim was rejected, leading to an appeal. The dispute centered on whether the imported goods qualified as "parts" within the scope of the Notification, despite being initially classified under a different heading. The Tribunal considered the nature of the imported goods, which were hollow cylinders of steel requiring machining to connect a boiler pipe. The appellants argued that the machining was minor and essential for connecting the pipe to the stub, without altering the fundamental character of the goods. They supported their claim by referencing the invoice describing the goods as "boiler components" and highlighting the special alloy steel used to withstand high pressures in boilers. The Tribunal emphasized that goods must be classified based on their condition at the time of importation. It acknowledged that post-importation processes like machining might be necessary for fitting or joining parts of a machine, but the impact on the essential character of the goods varies case by case. In this instance, considering the composition, intended use, minor alteration through machining, and the description in the invoice, the Tribunal concluded that the machining did not change the classification of the goods as "parts" under the Notification. As a result, the Tribunal allowed the appeal, directing the Customs authorities to grant a refund of duty to the Appellants within two months from the date of the order.
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