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Issues: Classification of imported goods under Customs Tariff - Whether Tungsten Carbide Twist Drills are classifiable under Heading 98.06 as parts of machinery or under a specific heading for tools.
In this case, the Collector of Customs, Bombay filed an appeal against an order passed by the Collector of Customs (Appeals) regarding the classification of 30,000 pieces of Tungsten Carbide Twist Drills declared as spares for machine tool parts under Heading 8207.90. The Assistant Collector classified the goods under Heading 98.06, covering parts of machinery of Chapters 84, 85, 86, 89, and 90, rejecting arguments based on Section Note 1(k) of Section XVI of the Customs Tariff. The Collector (Appeals) set aside the order, classifying the goods under Heading 8207.90, stating they were not parts of machinery under Chapter 84. The appellant argued for classification under Heading 98.06, citing Tribunal decisions and statutory provisions. The respondents contended that the goods, being interchangeable tools specifically covered by Chapter 82, should not be classified under Heading 98.06. They relied on a Supreme Court decision emphasizing classification under a distinct entry once made. The Tribunal examined the arguments and definitions of relevant terms to determine the classification issue. The Tribunal considered the contentions of both parties regarding the classification of the imported Tungsten Carbide Twist Drills. The appellant argued for classification under Heading 98.06 based on Note 1 to Chapter 98, emphasizing the inclusion of goods satisfying prescribed conditions even if covered by a more specific heading. The respondents contended that the goods should be classified under a specific heading for tools due to being interchangeable tools covered by Chapter 82. The Tribunal highlighted the importance of Section Notes and Chapter Notes in classification under the Customs Tariff, emphasizing the statutory and binding nature of these provisions. The Tribunal referred to the Supreme Court's guidance on classification under the Tariff, preferring specific entries before considering residuary headings. It noted the unique provision of Chapter 98, applying to goods meeting prescribed conditions, even if covered by more specific headings. The Tribunal analyzed the definitions of relevant terms and the nature of drilling machines and tools to determine the classification issue. It concluded that Tungsten Carbide Twist Drills, although essential for drilling operations, were known as tools in common parlance and should be classified under the specific Heading 82.07 for tools, not under the general Heading 98.06 for parts of machinery under Chapter 84. The appeal was rejected based on the understanding of goods in their commercial sense, as per established principles of classification.
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