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Issues: Classification of product 'Hose assembly' under Central Excise Tariff
Analysis: 1. The main issue in this appeal is the classification of the respondent company's product, described as 'Hose assembly,' under the Central Excise Tariff. The respondent claimed classification under CET 8431.00 or 8466.00 as parts of machinery, while the department argued that it should be classified under Heading 40.09. The Collector of Central Excise (Appeals) ruled in favor of the respondent, leading to the department's appeal. The department contended that the product is essentially a 'Hose with fitting,' falling under Heading 40.09, specifically sub-heading 4009.92, as it is designed to convey A.I.R., gas, or liquid, as per the machine's requirement. The department relied on Chapter Note 2(d) to support its argument that the product should be classified under Heading 40.09 due to its specific description, prevailing over other headings. 2. The respondent argued that the product should be classified under Headings 84.31 or 84.66, pertaining to mechanical appliances, as the hoses undergo further processes like cutting, skiving, and fitting of fittings before use. They claimed that the absence of a specific definition of hoses in the Tariff should lead to the application of trade and industry understanding for classification. The respondent invoked Interpretative Rule 3(c) to suggest that when there is ambiguity in classification, the goods should be classified under the heading that occurs last in the numerical order among those equally meriting consideration, which, in this case, would be Heading 84.31 or 84.66. 3. The Tribunal analyzed both parties' arguments and concluded that the hose assembly of vulcanized rubber, manufactured by the respondent, is essentially a hose pipe with fittings designed for conveying A.I.R., gas, or liquid. Despite undergoing processes like cutting and skiving, the essential character of the product remains unchanged. The Tribunal noted that the respondent's own catalog described the product as hoses used in machine tools, earthmovers, and hydraulic lifts, supporting the department's argument. The Tribunal also highlighted that Chapter Note 2 excludes only parts of hardened rubber from Chapter 40, implying that parts of vulcanized rubber of mechanical and electrical appliances are covered under Chapter 40. 4. The Tribunal rejected the respondent's argument that hoses under Heading 40.09 are generally of running lengths, citing the respondent's catalog and the Explanatory Notes under Heading 40.09, which clarify that the heading covers tubing of vulcanized rubber, whether cut to length or not. The Tribunal also dismissed the respondent's claim that hoses with or without fittings in sub-heading 4009.92 refer to hoses with inbuilt fittings, as there was no reliable evidence supporting this. The Tribunal applied Interpretative Rule 3(a) to classify the goods under Heading 40.09, setting aside the impugned order classifying the hose assembly under sub-heading 4009.92. 5. Consequently, the appeal was allowed, and the hose assembly of vulcanized, unhardened rubber was reclassified under sub-heading 4009.92 of C.E.T.A. 1985. Cross-objections were dismissed accordingly.
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