9911796707
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Issues: Classification of imported goods under Customs Tariff Act - Refund claim for duty paid - Special application to compressors - Applicability of Section Notes for classification of parts of machines.
In this case, the Collector of Customs, Madras filed an appeal against the order passed by the Collector of Customs (Appeals) Madras, which set aside the rejection of a refund claim by the Assistant Collector of Customs (Refunds) Madras Customs House. The dispute arose from the classification of imported goods, specifically ring carbon metal backed, assessed as gaskets under Heading 84.64 of the Customs Tariff Act by the Customs House. The respondents claimed a refund, contending that the goods should be classified as component parts specially designed for use in ammonia compressors under Heading 84.11(3)-CTA. The Assistant Collector rejected the claim due to lack of evidence supporting the special application to compressors. However, the Collector (Appeals) admitted the appeal, recognizing the goods as identifiable parts of compressors, leading to the current appeal by the Collector of Customs against this decision. The appellant argued that the imported goods, described as metal backed carbon rings, functionally served as spare parts for the Iso seals system of compressors, akin to gaskets, and should be classified under Heading 84.64-CTA. The respondents contended that the goods were manufactured as exclusive component parts of compressors, with an identifiable part number, emphasizing their specific use for compressors. Despite the absence of the respondents during the proceedings, their written submissions supported the specialized design and use of the imported item. Upon careful consideration of the submissions, the Tribunal analyzed the classification issue. The department asserted that the goods were functionally akin to gaskets and correctly classified under Heading 84.64-CTA, contrasting with the Collector (Appeals)'s decision to classify them under Heading 84.11(3) for gas compressors used in refrigerating equipment. However, the Tribunal noted the Collector (Appeals)'s reliance on the parts catalogue, drawing, and the specific design of the goods, leading to the conclusion that they were specially designed ammonia compressor parts under Heading 84.11(3)-CTA. This classification aligned with the Section XVI Notes of the Customs Tariff Act, particularly Rule 2(b) regarding parts suitable for use solely or principally with a particular kind of machine, supporting the Collector (Appeals)'s decision. Furthermore, the Tribunal referenced a decision by the Hon'ble Bombay High Court in a similar case, where mechanical seals specially designed for use in centrifugal pumps or compressors were classified as parts of the pumps or compressors under the Customs Tariff Act. Drawing parallels with this precedent and the Section XVI Notes, the Tribunal concluded that the Collector (Appeals)'s decision was appropriate and in line with the legal framework for classifying machine parts. Consequently, the Tribunal rejected the appeal by the Collector of Customs, upholding the classification of the imported goods as specially designed compressor parts under Heading 84.11(3)-CTA.
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