1990 (8) TMI 235 - AT - Customs

Summary

Issues Involved:
1. Classification of goods under the appropriate tariff heading.
2. Whether the goods are PVC sheets or component parts of machinery.
3. Interpretation of supplier's invoice and its impact on classification.
4. Applicability of specific tariff headings over residuary headings.
5. Relevance of technical literature and explanatory notes in determining classification.

Detailed Analysis:

1. Classification of Goods Under the Appropriate Tariff Heading:
The primary issue in this appeal is the classification of goods described in the bill of entry for home consumption as "Extruded/Moulded PVC components of cooling tower fill pack assembles Co-parts of cooling tower for air conditioning equipment." The appellants sought classification under Heading 84.12, 84.65, or 84.17(i), while the Department classified them under Heading 39.01/06, imposing higher duties.

2. Whether the Goods are PVC Sheets or Component Parts of Machinery:
The original assessing authority classified the goods as PVC sheets surface worked/embossed, falling under Heading 39.01/06. The appellants argued that the goods are component parts of cooling towers and should be classified under Heading 84.17. They contended that the goods had lost their character as PVC strips and had taken a cubic shape with several strips pasted together permanently, designed for use in cooling towers without any further modification.

3. Interpretation of Supplier's Invoice and Its Impact on Classification:
The invoice from the suppliers indicated a classification under Heading 39.02 CCCN, which the Dy. Collector relied upon. However, the appellants clarified that the CCCN at that time had only seven digits, and the correct classification suggested by the suppliers was actually Heading 84.12. The appellants argued that the invoice's reference to Heading 39.02 was a misinterpretation by the Dy. Collector.

4. Applicability of Specific Tariff Headings Over Residuary Headings:
The appellants relied on explanatory notes and trade notices to argue that the goods should be classified under Heading 84.17, which covers machinery for the treatment of materials by processes involving a change of temperature, including cooling. They contended that this specific heading should prevail over the residuary Heading 84.59.

5. Relevance of Technical Literature and Explanatory Notes in Determining Classification:
The appellants presented technical literature and explanatory notes to support their argument that the goods are specifically designed components of cooling towers. They emphasized that the goods are not merely PVC sheets but are fabricated in a complex way for optimal thermal effect in cooling towers. The lower authorities failed to consider this technical data and literature, leading to an erroneous classification under Chapter 39.

Conclusion:
The Tribunal concluded that the lower authorities had incorrectly classified the goods under Chapter 39. The goods were found to be specially designed components of cooling towers, falling under Heading 84.17. The Tribunal accepted the appellants' argument that the specific heading for machinery should prevail over the residuary heading. The appeal was allowed, and the goods were classified under Heading 84.17, resulting in a more favorable duty rate for the appellants.