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Issues: Classification of imported goods under Heading 8474.89, 8474.31, 8424.89, or 8479.10 of the Customs Tariff; Interpretation of technical literature to determine the principal function of the machine; Application of Explanatory Notes to the Harmonized System for classification; Distinction between spreading and spraying in relation to machinery classification; Eligibility for the benefit of Notification No. 59/87-Cus.
Analysis: The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of goods imported by the appellant company, specifically a "Aliva-Medio dry spraying machine." The appellant claimed classification under Heading 8474.89 with the benefit of a customs notification, while the Customs authorities classified the goods under Heading 8479.10. The issue revolved around whether the machine primarily functioned as a concrete mixer under Heading 8474.31 or as a concrete sprayer under Heading 8424.89. The Assistant Collector and the Collector of Customs (Appeals) upheld the classification under Heading 8479.10, rejecting the appellant's claims. The appellant argued that the machine was mistakenly classified under Heading 8474.89 and should have been classified under Heading 8474.31 as a concrete mixer. The technical literature provided by the appellant described the machine's functions as mixing concrete and spraying it in liquid form, primarily used in projects like hydro-electric sites. On the other hand, the Respondent contended that the machine did not mix concrete and should be classified under Heading 8479.10 for spreading concrete, citing Explanatory Notes to the Harmonized System. The Tribunal analyzed the technical literature of the manufacturer, which clarified that the machine did not mix concrete but rather sprayed dry mix or a mixture of dry mix with water. The Tribunal referred to the Explanatory Notes to the Harmonized System, emphasizing the distinction between spreading and spraying. It concluded that the machine fell under Heading 8424.20 for projecting or spraying liquids or powders, regardless of whether it sprayed dry mix or a mixture with water. The Tribunal rejected the department's classification under Heading 8479.10, highlighting the difference between spreading and spraying based on dictionary definitions. Ultimately, the Tribunal ruled in favor of the appellant, classifying the goods under Heading 8424 with the benefit of Notification No. 59/87-Cus. The decision was based on the machine's function of spraying dry mix or a mixture, excluding the spraying of specific substances like paint or cement. The Tribunal's decision emphasized the distinction between spreading and spraying, aligning with the technical description of the machine's operation and the applicable customs classification. In conclusion, the Tribunal's detailed analysis of the technical literature, classification headings, and Explanatory Notes led to the reclassification of the imported goods under Heading 8424, granting the appellant the benefit of the customs notification. The judgment clarified the distinction between spreading and spraying in the context of machinery classification, ensuring accurate classification based on the machine's actual functions and technical specifications.
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