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Issues: Classification of imported fly knives under Customs Tariff - Appropriate heading for assessment - Interpretation of Chapter Notes and Chapter headings - Whether fly knives are parts of machinery or tools - Application of Note 1 of Chapter 98 - Admissibility of refund claim.
In this case, the appellants imported fly knives and claimed assessment under Heading 8208.90 read with Notification No. 59/87, while the Asstt. Collector of Customs rejected the claim, stating that fly knives are not machinery but parts of machinery for making pulp, falling under Heading 8239.10. On appeal, the Collector (Appeals) classified the knives under Heading 98.06 based on Note 1 to Chapter 98, considering them as parts of a chipper necessary to carry out chipping function, rather than under Heading 8208.90 as claimed by the appellants. The appellants argued that the knives should be considered tools, not parts of machinery, to avoid rendering Heading 8208 otiose. However, the Revenue contended that the knives were integral parts of the chipper, as per their own write-up, and therefore should be classified as machinery under Note 1 of Chapter 98. The Tribunal agreed with the Revenue, emphasizing that the knives were specially made for the chipper and could not be used elsewhere, thus rejecting the appellants' contention. The Tribunal also relied on a previous ruling to support its decision, ultimately dismissing the appeals and upholding the lower authorities' assessment under Heading 98.06.
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