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Classification of imported machinery under Customs Tariff Act, 1975 - Whether the imported item "Spot Coater RSC 40 and Sheet Feeder with Tachometer and Spares" should be classified under Chapter Heading 84.35 or Heading 84.59(1). Analysis: Issue 1: Classification under Chapter Heading 84.35 or Heading 84.59(1) The dispute arose from the Collector (Appeals) accepting the importer's contention that the imported item should be classified under Chapter Heading 84.35 instead of Heading 84.59(1) as held by the lower authorities. The Assistant Collector granted relief to the importer for spot coater, parts, and sheet feeder under Heading 84.35 but rejected the claim for spot coater and its parts under the same heading. The Collector (Appeals) upheld the importer's argument, stating that the spot coater was used for printing of aluminum sheets and tin plates, falling under machinery ancillary to printing as per Heading 84.35. The Revenue, however, disagreed, arguing that the imported machinery, being a coater, should be classified under Heading 84.59(1) as it was not ancillary to printing. Issue 2: Arguments of the Revenue and the Importer The Revenue contended that the process of coating lacquer from the sheets was independent of printing and thus should not be classified under Heading 84.35. They cited the BTN Notes under Heading 84.35, emphasizing that it refers to machines for use ancillary to printing involving sheets or rolls of paper only. In contrast, the importer argued that the imported machinery was used as an ancillary to the printing unit and was in line with production machinery used alongside printing machinery. They highlighted the necessity of lacquering sheets before and after printing, supporting their classification under Heading 84.35. Issue 3: Tribunal's Decision and Reasoning After considering both parties' submissions and examining the record, the Tribunal analyzed the relevant Tariff Headings. Heading 84.35 covers other printing machinery and machines for use ancillary to printing, while Heading 84.59 encompasses miscellaneous machinery and mechanical appliances not falling within other headings. The Tribunal found merit in the importer's argument, noting that the spot coater was connected to the main drive shaft for the printing line and used alongside printing machines, making it ancillary to printing. Referring to the HSN Explanatory Notes, the Tribunal concluded that the machinery in question should be classified under Heading 84.35 as machines for use ancillary to printing, in line with Rule 3 of the Rules for Interpretation of the First Schedule to the Tariff. Conclusion The Tribunal rejected the Revenue's reliance on a previous judgment, distinguishing the nature of the machinery in question. Instead, the Tribunal found the case of Nectarine Pharmacy more applicable, where machinery for printing capsules and tablets was classified under Heading 84.35. Consequently, the Tribunal upheld the Collector (Appeals) decision, classifying the imported machinery under Heading 84.35 and rejecting the Revenue's appeal. This detailed analysis covers the classification dispute between the Revenue and the importer, the arguments presented by both parties, and the Tribunal's decision based on the relevant Tariff Headings and interpretative rules.
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