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2018 (9) TMI 327 - AT - CustomsClassification of imported goods - cargo sling - benefit of N/N. 21/2002-Cus. and No.6/2002-CE - scope of SCN - Held that - The original authority has traversed beyond the scope of show-cause notice. It is evident by the submissions of the appellant that the impugned part is not only a mere sting or wire or rope but is part of A90B100 which consists of other units. It was not correct on the part of the department to isolate a minor part of the whole assembly and to classify the same according to the metal used in the manufacture of the same. The highly technical equipment cannot be differentiated into smaller parts and cannot be classified as per the make of a smaller part in it. Appeal allowed - decided in favor of appellant.
Issues: Classification of imported cargo sling as part of a helicopter, Scope of show-cause notice, Eligibility for exemption under Notifications, Interpretation of technical equipment classification.
Classification of imported cargo sling as part of a helicopter: The case involved the classification of a cargo sling imported by M/s. Hindustan Aeronautics Limited as part of a helicopter. The Departmental audit contended that the cargo sling should be classified under Chapter Heading 7312.1010 and was not eligible for exemptions under certain notifications. The lower authorities upheld this classification. However, the appellants argued that the cargo sling was not merely a wire rope but a part of a larger assembly, including electrical and mechanical components. They provided technical literature to support their claim. Additionally, they highlighted that the supplying country classified the item under Chapter 88, confirming its status as a helicopter part. The Directorate General of Civil Aviation in France and India also certified the cargo sling for helicopter use, further supporting the appellants' position. Scope of show-cause notice: The appellants raised concerns regarding the scope of the show-cause notice, as it sought to classify the goods under a different heading than what was ultimately determined in the Order-in-Original and Order-in-Appeal. They argued that this violated the principles of natural justice and cited relevant case laws to support their contention. The Tribunal acknowledged this discrepancy and emphasized that the department had erred by isolating a minor part of the assembly for classification based on the material used in its manufacture. The Tribunal held that highly technical equipment like the cargo sling could not be fragmented for classification purposes and should be considered in its entirety. Eligibility for exemption under Notifications: The appellants also asserted that even if the cargo sling was classified under Chapter 73, it should still be eligible for exemption under Notification No.39/1996-Cus. dated 31.7.1996. They argued that the competent authority had certified the cargo sling for exemption, as it was designed for use with helicopters and integrated with helicopter systems. The Tribunal agreed with this argument and noted that the exemption should apply regardless of the specific classification of the goods. Interpretation of technical equipment classification: In analyzing the technical aspects of the case, the Tribunal referenced a previous judgment involving equipment for ground power units used exclusively with aircraft. In that case, the Tribunal classified the equipment as part of aircraft based on its specialized use. Drawing a parallel, the Tribunal concluded that the cargo sling, designed for use with helicopters and certified by aviation authorities, should be considered a part of helicopters. The Tribunal's decision emphasized the holistic view of technical equipment classification, rejecting the fragmented approach taken by the department. In conclusion, the Tribunal allowed the appeal, emphasizing that the cargo sling should be classified as part of a helicopter and was eligible for exemption under relevant notifications. The judgment highlighted the importance of considering technical equipment in its entirety for accurate classification and exemption determination.
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