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Issues: Classification of imported goods under the Customs Tariff Act, 1975 - Whether the imported items are correctly assessable to customs duty under Heading 84.17(1) or Heading 68.01/16(1)?
In this case, the appeal was filed against the order-in-appeal passed by the Collector of Customs (Appeals) Bombay regarding the classification of imported goods. The appellants imported combustion chamber parts and sought classification under Heading 84.17(1) of the Customs Tariff Act, 1975. The Asstt. Collector classified the goods under CTA Heading No. 68.01/16(1), rejecting the claim based on the material (graphite) used. The Collector (Appeals) allowed the appeal, stating that the goods are parts of a combustion chamber and should be classified accordingly. The Department appealed this decision. The Department argued that the goods, being parts of combustion chambers made of graphite, should be classified under 68.16 of CTA, 1975 based on Chapter Note 1(a) under Chapter 84. The respondents contended that the goods were not spare parts but a complete chamber with a burner, necessary for producing hydrochloric acid. They emphasized the technical process and function of the machinery, stating that it should be classified under Chapter 84. They presented various documents supporting this classification, including invoices, recommendations, and certificates. The Tribunal considered the submissions and records. It noted that the imported goods were a complete unit consisting of three parts for combustion chambers, with a specific function to produce hydrochloric acid. The Tribunal emphasized that the classification should be based on the function of the equipment rather than the material used. It highlighted the rare choice of graphite due to its anti-corrosive nature. The Tribunal found that the goods constituted a complete unit and should be classified under Heading 84.17(1) as machinery for material treatment, rejecting the Department's argument for classification under Heading 68.01/16(1). The Tribunal disagreed with the Department's interpretation of Chapter Note 1(a) and held that machinery items made of graphite should be classified under Heading 84.17. It upheld the findings of the Collector (Appeals) that the imported items were correctly assessable under Heading 84.17(1) and dismissed the Department's appeal.
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