2015 (11) TMI 1325 - AT - Customs

Classification of goods - Classification under Chapter Heading 8419 or 8443 - Exemption claim - Held that - Commissioner (Appeals) went beyond the findings of the adjudicating authority and held that the exemption was applicable only to parts imported for initial installation/assembly or manufacture of machines when imported in complete form. We find that facts on record speak otherwise. The DGFT certificate endorses eligibility specifically to the parts imported. Even otherwise, there is no evidence forthcoming that the parts were not required for the initial setting up of the printing machine even if the parts were imported later. We also note that Notification No. 213/87 covered Headings 8419 as well as Heading 8443. However, this aspect has not been discussed by the authorities below. Nevertheless, without basing our decision on this fact, we have held above that the classification under Heading 8443 is more appropriate. - Decided in favour of assessee.

Summary

Issues: Classification of imported goods under Chapter Heading 8419 instead of 8443, Exemption claimed on auxiliary duty, Interpretation of Tariff Heading

Classification of imported goods under Chapter Heading 8419 instead of 8443:
The dispute in this case revolves around the classification of imported goods described as 'IVT compact Dryer Components Parts of Web Offset Printing Machine' under Chapter Heading 8419 instead of 8443 as claimed by the appellant. The appellant sought classification under Sub-heading 8443.90 as parts of a printing machine, claiming exemption on auxiliary duty (CVD) under specific notifications. The Revenue argued that the dryers fall under Heading 8419, which covers dryers, and not under 8443, which covers printing machinery. The authorities relied on Section Note 2 of Section XVI, stating that parts suitable for use solely or principally with a particular kind of machine should be classified with that machine. The appellant, on the other hand, presented evidence such as a license, manufacturer's certificate, and catalog indicating the specific use of the goods with a printing machine under Heading 8443.

Exemption claimed on auxiliary duty:
The appellant based their claim for exemption on auxiliary duty on the license granted by the DGTD and specific customs notifications. The DGTD recommended exemption for the goods imported by the appellant under Chapter Sub-heading 8443.90, and the Customs Notification indicated exemption for parts falling under both Heading 8419 and 8443. The harmonious reading of the DGTD certificate and Customs Notification suggested that the intention was to exempt parts of printing machines. The authorities, however, emphasized the specificity of Heading 8419 covering dryers, leading to the denial of the exemption.

Interpretation of Tariff Heading:
The Tribunal analyzed the HSN Explanatory Notes under Heading 8419, which excluded machinery where heating or cooling is a secondary function designed to facilitate the main mechanical function. The Dryer, being secondary to the main function of printing, was deemed unsuitable for classification under Heading 8419. The Commissioner (Appeals) restricted the exemption to parts imported for initial installation or assembly, contrary to the DGFT certificate endorsing eligibility specifically to the imported parts. The Tribunal ultimately allowed the appeal, asserting that the classification under Heading 8443 was more appropriate based on the specific use and characteristics of the imported goods.

This detailed analysis of the judgment highlights the core issues of classification, exemption claims, and the interpretation of tariff headings, providing a comprehensive understanding of the legal reasoning and conclusions reached by the Tribunal.