1988 (3) TMI 303 - AT - Customs

Summary

Issues:
Assessment of rough machined steel castings/forgings under Customs Tariff, classification under Item 26AA or Item 68.

Analysis:
The case involved the assessment of rough machined steel castings/forgings under the Customs Tariff, specifically whether they should be classified under Item 26AA or Item 68. The Appellate Tribunal considered previous orders and the dispute's nature, which revolved around the classification issue. The goods had initially been assessed as machine parts under the Customs Tariff due to interpretation rules, but the Central Excise Tariff lacked such rules, making the assessment different. The Collector Appeals noted that the items were not yet finished but had acquired the essential shape and character of the final product. It was argued that if the goods were only semi-finished, they could not be considered component parts until fully machined and finished.

In a previous order, the Collector of Central Excise Appeals, Madras had determined that rough machined steel forgings should be assessed under Item 26AA. The decision was supported by a CBEC letter and the historical practice of assessing such items under 26AA. However, a tariff circular introduced a change directing the assessment of machined castings/forgings under Item 68. The importers contended that this change implied that the goods were not excisable to C.V. duty before a certain date. The Appellate Tribunal acknowledged the Collector Appeals' reasoning but expressed doubts about the classification under 26AA/25, suggesting that the goods, despite being rough machined, should be classified as forgings rather than goods not elsewhere specified.

The Tribunal emphasized the distinction between Item 26AA and Item 68, noting that a rough machined forging was more appropriately classified under forgings than under a general category. It highlighted that Item 68 was a residual category used when a product could not fit elsewhere, making it a last resort classification. Ultimately, the Tribunal ruled that the rough machined forgings should be assessed under Item 26AA rather than Item 68, based on their analysis and interpretation of the relevant tariff provisions.