1986 (11) TMI 68 - AT - Customs

Summary

Issues Involved:
1. Interpretation of Interpretative Rule 2(a).
2. Classification of imported goods under the correct tariff heading.
3. Relevance of post-importation costs in classification.

Summary:

1. Interpretation of Interpretative Rule 2(a):
The primary issue was the interpretation of Interpretative Rule 2(a) concerning the classification of imported goods. The Tribunal noted that Rule 2(a) includes incomplete or unfinished articles that have the essential character of the complete or finished article. The Tribunal emphasized that the essential character must be determined by factors such as the nature of the material, its bulk, quantity, weight, or value. The Tribunal concluded that no general principles could be laid down for the application of Rule 2(a) and that each case must be evaluated based on its specific facts.

2. Classification of Imported Goods:
The appellants imported Rough machined banding ring forgings and claimed they should be classified under Heading 84.11(1) CTA. The Department classified them under different headings, leading to a dispute. The Tribunal examined whether the imported goods had attained the approximate shape or outline of the finished article and whether they could only be used for completion into the finished article. The Tribunal found that the imported goods met these criteria and should be classified under Heading 84.11(1) CTA, as claimed by the appellants.

3. Relevance of Post-Importation Costs:
The appellants argued that the cost of post-importation operations, which was less than 1.5% of the c.i.f. value, should be a relevant factor in applying Rule 2(a). The Tribunal rejected this argument, stating that the cost of post-importation operations varies and is not a reliable criterion for classification. The Tribunal emphasized that the essential character of the imported goods should be the primary consideration.

Conclusion:
The Tribunal allowed the appeals, directing that the imported goods be classified under Heading 84.11(1) CTA, with consequential relief to the appellants.