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Issues: Proper classification of seamless steel tubes used in Heat Exchanger.
Analysis: 1. The appellants argued that seamless steel tubes designed for use in heat exchangers should be classified under CTH 84.17 before March 86 and under CTH 84.19 after March 86, rather than under 7304. They contended that these tubes are specifically manufactured for heat exchangers and should be classified as parts of the finished product, citing relevant cases in support of their argument. 2. The Revenue argued that despite being designed for heat exchangers, the tubes should be classified under the relevant tariff heading in Chapter 73 due to Section Note VXI. They referred to HSN Notes, stating that even if designed for a specific machine, seamless steel tubes should be classified under the relevant tariff heading. They cited cases and a Bench Order supporting their stance. 3. The Tribunal analyzed the arguments and noted that seamless steel tubes are specifically described under Heading 73.04 after Feb 86 and under 73.17/19 before that. It explained that identifiable parts of articles are classified as such parts in their appropriate headings, but parts of general use are classified separately. The Tribunal referenced HSN Notes under Heading 73.04, which include tubes suitable for use in heat exchangers, supporting the classification under Chapter 73. 4. The Tribunal rejected the argument that the tubes should be classified under the relevant heading for heat exchangers, emphasizing the HSN Notes and the Central Excise Tariff Act's alignment with the HSN. It disregarded the character of the tubes as finished goods for heat exchangers, as the HSN Notes clearly classified them under Chapter 73.04. 5. Despite assertions about the tubes' specific use in heat exchangers, the Tribunal upheld the classification under Chapter 73 based on the HSN Notes and the lack of conclusive evidence regarding the tubes' transformation post-importation. The appeals were rejected, and the impugned orders were upheld.
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