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Classification of a 100 cubic meter capacity Balloon gas holder under the First Schedule to the Customs Tariff Act, 1975. Analysis: The issue at hand in this appeal before the Appellate Tribunal CEGAT, New Delhi revolves around the classification of a 100 cubic meter capacity Balloon gas holder imported by the appellants. The appellants claimed assessment under Heading No. 59.11 (Sub-heading 5911.90) of the Schedule, while the lower authorities classified the goods under Heading 40.16 (Sub-heading No. 4016.99) of the Schedule, leading to the present appeal. The appellant's argument is centered on the contention that the gas holder is an integral part of their air separation plant, crucial for the manufacture of oxygen gas compressed at high pressure in cylinders. They emphasize the necessity of the gas holder in providing a steady flow of low-pressure oxygen gas to the compressor to prevent damage to the entire plant due to vacuum-like conditions. The Revenue did not dispute the function of the gas holder but contended that it cannot be classified as a textile article for technical purposes under sub-heading 5911.90 due to its predominant rubber content and stationary nature. The competing classifications under Chapter 40 and Chapter 59 were examined in detail. The appellant relied on note 7 to Chapter 59, highlighting the classification criteria for textile products and articles for technical uses. The weight and rubber content of the fabric of the balloon were considered, with the predominance of rubber not detracting from its classification as a textile fabric coated on both sides with rubber. The Tribunal deliberated on the arguments presented by both parties. The Revenue contended that the balloon, being a composite article with its essential character derived from rubber, falls under Chapter 40, not qualifying for Chapter 59 classification. Conversely, the appellant emphasized the functional necessity of the balloon in the air separation plant, asserting its integral role in plant operations. After careful consideration, the Tribunal concluded that the subject balloon should be classified under Heading 59.11 (Sub-heading 5911.90) and not under Heading 40.16 (Sub-heading 4016.99), based on the unrebutted arguments regarding the balloon's essential function in the air separation plant. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants, granting them consequential relief. In light of the detailed analysis and the pivotal role of the gas holder in the appellants' plant operations, the Tribunal's decision underscores the importance of functional relevance in the classification of goods under the Customs Tariff Act, 1975.
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