1992 (7) TMI 181 - AT - Customs

Summary

Issues: Classification of imported Knitting Machine Needles under Customs Tariff Act, eligibility for exemption under Notification No. 69/87-Cus., interpretation of domestic vs. industrial knitting machines.

The judgment revolves around the classification of Knitting Machine Needles imported by the appellant and the eligibility for exemption under Notification No. 69/87-Cus. The dispute arose when the Assistant Collector of Customs classified the needles under Heading 9806 instead of granting the benefit claimed under Notification No. 69/87-Cus. The appellant contended that the knitting machines for which the needles were imported are not domestic knitting machines but industrial ones, emphasizing the features and capabilities of the machines designed for continuous use in cottage industries. The appellant relied on a Cegat decision in a similar case to support their argument.

The key question for decision was whether the imported needles could be considered for industrial knitting machines to qualify for exemption under Notification 69/87. The Tribunal analyzed the features and capabilities of the machines based on the literature provided, highlighting their ability to knit various patterns, use multiple colors and yarn types, and knit complex designs. The Collector (Appeals) had classified the machines as hand-knitting and semi-automatic knitting machines used in households, relying on the description in the catalog and observations about cottage industries. However, the Tribunal differentiated this case from a previous decision involving similar issues, where the leaflet described the machines for household use, unlike the current scenario where the machines were designed for cottage industries without any indication of domestic use.

The Tribunal compared previous Cegat decisions on distinguishing domestic and industrial knitting machines based on capabilities and features. It noted that the machines in question were capable of complex designs and versatile enough for industrial use, leading to the conclusion that they should not fall under the excluded category in the notification. Consequently, the needles imported for these machines were deemed eligible for exemption under Notification 69/87, and the appeal was allowed in favor of the appellant.