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Issues: Classification of imported goods as telephone instruments or parts under Customs and Excise Tariff
In this case, the appellant, a manufacturer of telephones, imported consignments of various parts for telephones in 1995 and sought classification of the items under Tariff heading for parts. The Customs, however, classified the goods as complete telephone instruments under specific Tariff headings. The Commissioner of Customs upheld this classification, relying on Rule 2(a) of the General Rules for the interpretation of Customs Tariff Schedule. The appellant contended that the goods were being bought and sold as parts only, not as complete telephone instruments, as each part was valued separately and billed accordingly. The appellant argued that the imported parts were to be assembled with domestically manufactured printed circuit boards to create complete telephone instruments. The appellant further referenced the HSN Explanatory Note to support their argument that the goods should be classified as parts. The appellant also cited a previous Tribunal decision where import of components was not considered as import of complete products. The learned SDR, on the other hand, argued that the consignment essentially constituted complete telephone instruments, albeit unassembled and incomplete due to the absence of certain parts. The Tribunal analyzed the situation and concluded that the goods were presented as parts only, not complete instruments, as each part was priced and packed separately. The Tribunal also noted that the assembly of parts into complete instruments required engineering skills and the use of machinery, thus not meeting the criteria for simple assembly under Rule 2(a). Consequently, the Tribunal held that Rule 2(a) was not applicable in this case, and the imported parts should be classified as such, not as complete telephone instruments. The impugned order was set aside, and the appeal was allowed in favor of the appellant. This judgment revolves around the classification of imported goods as telephone instruments or parts under the Customs and Excise Tariff. The main issue was whether the imported consignments, comprising various parts for telephones, should be classified as complete telephone instruments or as individual parts. The appellant argued that the goods were being bought and sold as parts only, not as complete instruments, as evidenced by separate pricing and packaging of each part. The appellant contended that the imported parts were meant to be assembled with domestically manufactured printed circuit boards to create complete telephone instruments. The Tribunal analyzed the situation and found that the goods were indeed presented as parts only, not complete instruments, as the assembly process required engineering skills and machinery, thus not meeting the criteria for simple assembly under Rule 2(a). The Tribunal held that Rule 2(a) was not applicable in this case, and the imported parts should be classified as such, not as complete telephone instruments.
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