2011 (7) TMI 621 - AT - Customs

Classification - Indian Railway placed an order with Appellant for supply of 42 sets of railway break - Appellant imported such goods into India and one bill of entry was filed for 42 complete sets of railway break - classification claimed under sub-heading 8607 for the Customs Tariff - Held that - Items in question are parts of railway breaks imported in unassembled conditions and such parts are specifically covered under sub-heading 8607 of the Customs Tariff. Chapter Note 1(g) of section XVI read with Note 2 of section XV will apply when such parts alone are imported. The impugned goods are classifiable under heading 8607 of the Customs Tariff. Order is set aside and appeal is allowed.

Summary

Issues:
Classification of parts of railway break under respective headings in Customs Tariff.

Analysis:
The appellant filed an appeal against the Revenue's classification of parts of a railway break under specific headings in the Customs Tariff. The appellant imported 42 sets of railway break and claimed classification under sub-heading 8607. The Revenue accepted this classification for certain parts but disputed it for other items. The Appellant argued that the disputed parts were specifically used as railway break components and should be classified under 'Parts for Railway or Tramway, Locomotives or Rolling Stock' under heading 8607. The Revenue contended that one item was a 'Part of General use' falling under Chapter heading 7307, citing Note 2 of Section XV of the Customs Tariff and Note 1(g) of section XVI. However, the tribunal found that none of the disputed items qualified as 'parts of general use' as per the Customs Tariff Act's definitions. Only one item, 'Nuts,' fell under heading 7307.

The tribunal noted that the appellant imported complete sets of railway break systems that did not require further manufacturing or processing. Referring to Rule 2(a) of the General Rules of Interpretation to the Customs Tariff, the tribunal stated that incomplete or unfinished articles could be classified under the heading of the complete article if they retained the essential character of the finished product. The tribunal found merit in the appellant's contention that the disputed parts were specifically for railway breaks and should be classified under sub-heading 8607. The Commissioner(Appeals) also acknowledged that the parts could be used in railway breaks and should be covered under heading 8607. Therefore, applying Chapter Note 1(g) of section XVI along with Note 2 of section XV, the tribunal concluded that the disputed goods were classifiable under heading 8607 of the Customs Tariff. Consequently, the impugned order was set aside, and the appeal was allowed.