1995 (5) TMI 107 - AT - Customs

Summary

Issues:
Classification of imported product "Beam Bearing Assembly" under Customs Tariff Act, 1975 - Applicability of Heading 84.63(2) or Heading 84.38(1) - Interpretation of Section Note 2(b) under Section XVI for classification of parts.

Analysis:
The appeal concerns the classification of the imported product "Beam Bearing Assembly" under the Customs Tariff Act, 1975. The dispute arose when the Assistant Collector (Refund) rejected the importer's claim for reassessment of the product under Chapter Heading 84.38(1) instead of the original assessment under Heading 84.63(2). The Collector (Appeals) allowed the appeal, leading to the Revenue's appeal to reclassify the product under Heading 84.63(2) as a transmission bearing assembly.

The Revenue argued that the product should be classified under Heading 84.63(2) as a transmission bearing assembly, as per Note (ii) of the relevant section. They contended that the item's function was transmission of power, making it appropriate for classification under this heading. They opposed the application of Section Note 2(b) of Section XVI for classification.

The importer, supported by the Collector, argued that the product, though a part of a transmission bearing assembly, was specifically designed for use in the warping machine, falling under Heading 84.37. They emphasized the specialized nature of the product and its intended use in the warping machine, justifying classification under Heading 84.38(1) based on Section Note 2(b) of Section XVI.

Upon considering the arguments, the Tribunal agreed with the importer's position. They noted that Section Note 2(b) of Section XVI mandates classification of parts suitable for use principally with specific machines under the corresponding heading. Given the product's specialized design for the warping machine, it was deemed more appropriate to classify it under Heading 84.38(1) for parts and accessories solely or principally used with machines under Heading 84.37.

The Tribunal referenced a previous case to support their decision, where specific parts designed for a particular machine were classified accordingly. They concluded that the product in question, tailored for the warping machine and not a general transmission shaft, should be classified under Heading 84.38(1). Therefore, the appeal by the Revenue was dismissed, affirming the classification under Heading 84.38(1) for the imported "Beam Bearing Assembly."