1994 (4) TMI 166 - AT - Customs

Summary

Issues: Classification of imported goods under Customs Tariff - Chapter 84 or Chapter 69

1. Classification of Goods under Customs Tariff:
The case involved a dispute regarding the classification of imported goods under the Customs Tariff, specifically whether the goods should be classified under Chapter 84 or Chapter 69 of the Customs Tariff Act.

2. Interpretation of Chapter Notes and Explanatory Notes:
The issue revolved around the interpretation of Chapter Note 1(b) of Chapter 84 CTA, which excludes appliances or machinery of ceramic material, and the relevance of HSN Explanatory Notes in determining the classification of goods.

3. Application of Interpretative Rules:
The appellant argued that the goods imported were parts of paper making machinery and should be classified under Chapter 84 CTA. The appellant relied on Rule 3(a) of the Rules for the Interpretation of the Tariff and Rule 2 of Section XVI of CTA for the classification of parts.

4. Character of Imported Goods:
The key point of contention was whether the imported outsert blades, which contained a ceramic component, had lost their character as ceramic articles due to a higher proportion of other materials. The Supplier's Certificate indicated that the goods were approximately 40% ceramic by weight.

5. Classification under Section Note 2 of Section XVI CTA:
The decision also considered the classification of the goods under Section Note 2 of Section XVI CTA, which provides rules for classifying parts of machines and machinery. The Tribunal analyzed whether the goods were suitable for use solely or principally with a particular kind of machine.

6. Decision and Rationale:
After evaluating the arguments and evidence presented, the Tribunal held that the imported outsert blades were correctly classifiable under sub-heading 8439.99 CTA, under Chapter 84 of the Customs Tariff. The Tribunal concluded that the goods, designed for use as component parts of paper making machinery, had lost their character as ceramic articles due to the higher proportion of other materials, and therefore fell outside the exclusion in Chapter Note 1(b) of Chapter 84 CTA. The decision also aligned with Section Note 2 of Section XVI CTA regarding the classification of parts of machines.

7. Outcome:
Consequently, the Tribunal allowed the appeal, ruling in favor of the appellant regarding the classification of the imported goods under the Customs Tariff. The judgment highlighted the importance of considering the nature and composition of goods, as well as the relevant interpretative rules and explanatory notes, in determining their correct classification under the tariff.