1989 (4) TMI 235 - AT - Customs

Summary

Issues:
1. Classification of aeroplane seats and backs under Customs Tariff.
2. Applicability of Notification No. 145/77-Cus., dated 9-7-1977 for assessment of Basic Customs Duty.

Analysis:

1. Classification of Aeroplane Seats and Backs:
The appeal addressed the misclassification of aeroplane seats and backs as articles of furniture by the Collector of Customs (Appeals). The appellants argued that these items, specifically designed for Boeing 737 aeroplanes, should not be considered furniture as they are permanently fitted to the aircraft. They contended that the goods should be classified under Chapter 88 of the Customs Tariff instead of Chapter 94. The Tribunal acknowledged the unique nature of the seats and backs, designated by serial numbers and exclusively tailored for Boeing 737 planes. Consequently, the Tribunal agreed with the appellants' assertion that the items should be classified under Chapter 88, emphasizing their specific use for Boeing 737 aircraft.

2. Applicability of Notification No. 145/77-Cus., dated 9-7-1977:
The second issue revolved around the applicability of Notification No. 145/77-Cus., dated 9-7-1977, for the assessment of Basic Customs Duty at 3% ad valorem. The appellants argued that the notification should apply to aeroplane parts, irrespective of their classification under the Customs Tariff, as long as they are identifiable as aeroplane components. The Tribunal noted that while it had addressed the tariff classification, it had not ruled on the notification's applicability. Upon review, the Tribunal agreed with the interpretation of the notification in a prior case involving M/s. Indian Airlines, Calcutta v. Collector of Customs, Calcutta. The Tribunal clarified that the notification extended to goods such as aeroplane parts, engines, and rubber tires exclusively for aeroplanes, regardless of their classification under different Customs Tariff headings. Considering the evidence presented by the appellants regarding the Boeing 737 passenger cabin chairs' specialized manufacturing and cataloging, the Tribunal concluded that these items qualified as aeroplane parts and thus were entitled to the benefits under Notification No. 145/77-Cus.

In conclusion, the Tribunal partially allowed the appeal, rectifying the error in the previous order by directing the classification of the aeroplane seats and backs under Chapter 88 and granting the benefit of Notification No. 145/77-Cus., dated 9-7-1977, for Basic Customs Duty assessment. The judgment emphasized the specific characteristics and intended use of the goods in question to determine their appropriate classification and eligibility for duty exemptions.