1994 (2) TMI 140 - AT - Customs

Summary

Issues:
Classification of goods under Tariff Heading 84.41(1) or 73.33/40 - Whether bobbins for sewing machines made of steel should be classified under Heading 84.41(1) or Heading 73.33/40.

Analysis:
The case involved a dispute regarding the classification of bobbins for sewing machines made of steel under Tariff Heading 84.41(1) or 73.33/40. The importer had filed a refund application claiming reassessment of the goods under Heading 84.41(1) at 40% instead of the original assessment under Heading 73.33/40. The Assistant Collector upheld the assessment under 73.33/40 based on Note 1(c) of Section XVI, excluding bobbins from Chapter 84. However, the Collector (Appeals) disagreed, stating that bobbins are essential parts of sewing machines and should be classified under Heading 84.41(1). The Collector emphasized that bobbins are specific parts of the machine and not general items, thus falling under Note 2(b) of Section XVI. The Collector's decision was based on the principle that the most specific description should be preferred over a more general one, as per Rule 3(a) of the Customs Tariff Act, 1975.

The matter escalated to the Appellate Tribunal, where two Members had differing opinions. One Member agreed with the Collector's view, emphasizing that bobbins are essential for sewing machines' operation and should be classified under Heading 84.41(1). The other Member, however, interpreted the function of bobbins as merely supporting the thread and not being an integral part of the machine, advocating for classification under Heading 73.33/40. The Vice President, presiding over the case due to the difference of opinion, sided with the Member who considered bobbins as machine parts and upheld their classification under Heading 84.41(1). The final order classified bobbins under Tariff Heading 73.33/40, allowing the Revenue's appeal.

In conclusion, the classification of bobbins for sewing machines made of steel under Tariff Heading 84.41(1) or 73.33/40 was a contentious issue. The debate centered on whether bobbins should be considered essential parts of sewing machines, falling under Heading 84.41(1), or if they were mere supports for the thread, warranting classification under Heading 73.33/40. The final decision, based on the majority opinion, classified the bobbins under Heading 73.33/40, allowing the Revenue's appeal.