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Issues: Classification of imported electric motors under Tariff Heading 85.01(1) or 85.01(2)
In this case, the appellant imported electric motors and sought their assessment under Tariff Heading 85.01(1) of the Customs Tariff Act (CTA) on the basis that the motors were internally geared. The Assistant Collector classified the motors under 85.01(2) as they did not meet the criteria of internally geared motors. The Collector of Customs (Appeals) upheld this classification, stating that internally geared meant gears fitted inside the motor housing. The appellant argued that internally geared motors only required a direct connection between the gear and motor, not necessarily housed in the same casing. The Tribunal examined the definition of internally geared motors under Tariff Heading 85.01 and concluded that motors and gears connected only by a metal stap cannot be considered internally geared motors as per the plain language of the statute. The Tribunal analyzed the definition of electrical goods under Tariff Heading 85.01, which included generators, motors, converters, transformers, rectifiers, and inductors. It noted that for assessment under Heading 85.01(2), motors must be other than internally geared motors. The appellant contended that their motors should be assessed under Heading 85.01(1) as internally geared motors. However, the Tribunal determined that internally geared motors must have a direct connection between the gear and motor within the same casing, rejecting the appellant's argument that a metal stap connection sufficed for classification as internally geared. The Tribunal referenced a Supreme Court case to emphasize that the interpretation of tariff entries must align with the plain language used in the statute. It highlighted that in the absence of ambiguity, the literal meaning of the words must be applied, without room for equity or intendment in a taxing statute. Applying this principle, the Tribunal concluded that since the motors and gears were separate and connected only by a metal stap, they did not meet the criteria for internally geared motors as per Tariff Heading 85.01(2). Consequently, the appeal was rejected, and the classification under Tariff Item 85.01(2) was upheld based on the specific language of the statute.
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