1998 (10) TMI 185 - AT - Customs

Summary

Issues Involved:
1. Classification of Vacuumatic Paper Counting Machine under the Customs Tariff Schedule.
2. Whether the machine is ancillary to printing machinery or a general-purpose machine.

Detailed Analysis:

1. Classification of Vacuumatic Paper Counting Machine:

The primary issue in the appeals by M/s. Printwell Industries and M/s. Hindustani Art Cottage was the classification of the imported Vacuumatic Paper Counting Machine. The appellants argued for classification under Heading No. 84.35, which pertains to machines ancillary to printing, attracting duty @40% (Basic) plus 25% (Auxiliary) plus 12% (Additional). The Assistant Collector of Customs classified it under Heading 84.59(i), which covers machines and mechanical appliances with individual functions not specified elsewhere in Chapter 84.

2. Ancillary to Printing Machinery or General-Purpose Machine:

The appellants contended that the counting of paper sheets before or after printing is ancillary to the printing process. They referred to the Explanatory Notes to CCCN, which include machines for uses ancillary to printing, such as stock or pile elevators and automatic feeders. They argued that the imported machine, designed for use in the printing industry, should be classified under Heading 84.35.

The respondent, represented by Shri A.T. Usman, argued that the machine is not exclusively designed for use with printing machinery and is used in other fields as well. Therefore, it should be classified under Heading 84.59(i).

Judgment Analysis:

Member (J):
Archana Wadhwa, Member (J), concluded that the machine is used for counting papers after printing and is ancillary to printing. She emphasized that the Explanatory Notes provide examples of ancillary machines, which are not exhaustive. She argued that the paper counting machine, used before and after printing, fits the description of machines ancillary to printing and should be classified under Heading 84.35.

Vice President:
S.K. Bhatnagar, Vice President, disagreed, noting that the machine is not exclusively designed to operate with printing machines. He highlighted that the machine is of general use, capable of counting and batching paper for various applications beyond printing. He concluded that the machine does not fit the criteria for Heading 84.35 and should be classified under Heading 84.59(i).

Third Member:
Lajja Ram, Member (T), was referred to resolve the difference of opinion. He supported the Vice President's view, noting that the machine is for counting and batching paper, not exclusively designed for printing operations. He referenced the supplier's classification under Heading 84.59 and the absence of a tab inserting mechanism, which would be required for classification under the Import & Export Policy.

Majority Opinion:
The majority opinion, formed by the Vice President and Member (T), concluded that the machine is correctly classified under Heading 84.59(i) as a general-purpose machine. Consequently, the appeals were rejected.

Conclusion:
The Vacuumatic Paper Counting Machine is classified under Heading 84.59(i) of the Customs Tariff Schedule, as it is a general-purpose machine not exclusively designed for use with printing machinery. The appeals were rejected based on the majority opinion.