1998 (5) TMI 177 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Heading 84.04 or 86.07

In this case, the appellants declared two items, Super Heater Element, and Spares for Super Heater, in their classification list under Tariff Heading 84.04 as parts for boilers. However, a show cause notice proposed a classification under Tariff sub-heading 86.07. The Assistant Collector classified the goods under Tariff Heading 86.07, citing that Tariff Heading 86.07 covers parts of Railway Locomotive, while Tariff Heading 84.04 pertains to Super Heating Elements used in boilers. The appellate authority upheld this classification, leading to the current appeal. The appellant argued that the goods cannot be classified under Chapter 86 due to Section Note 2(e) of Section XVII, as Super Heater for a boiler is specifically mentioned in Tariff sub-heading 84.04. The respondent contended that the goods could be classified under Tariff Heading 73.03 to 73.07 as bends (Pipes and tubes), proposing a remand for further classification. The Tribunal rejected the remand plea, emphasizing that the goods are parts of a Super Heater for boilers, falling under Tariff Heading 84.04 as per Section Note 2(a) of Section XVII, beyond the scope of Chapter 86. Therefore, the appeal was allowed in favor of the appellants.

The main issue in this case revolves around the correct classification of goods, specifically Super Heater Element and Spares for Super Heater, under the appropriate Tariff Heading. The dispute arose when the appellant's classification under Tariff Heading 84.04 was challenged, proposing a classification under Tariff sub-heading 86.07. The Assistant Collector and the appellate authority upheld the classification under Tariff Heading 86.07, linking it to parts of Railway Locomotive, while the appellant argued for classification under Tariff Heading 84.04 based on the nature of the goods as parts for boilers. The Tribunal analyzed the provisions of Section Note 2(a) of Section XVI and Note 2(e) of Section XVII to determine the correct classification. The Tribunal clarified that the goods, being specifically described in Tariff Heading 84.04 as Super Heater for boilers, should be classified under this heading, as they fall outside the scope of Section XVII and Chapter 86. This decision highlights the importance of accurately interpreting the tariff headings and relevant section notes to determine the appropriate classification of goods under the customs tariff.

The case also involved a contention regarding a new classification proposal by the respondent, suggesting that the goods could be covered under Chapter Tariff Heading 73.03 to 73.07 as bends (Pipes and tubes), which was not considered earlier. The Tribunal rejected this new plea, emphasizing that the goods in question are parts of a Super Heater or Super Heater Element for boilers, and the only dispute was whether they should be classified under Tariff Heading 84.04 or 86.07. The Tribunal noted that the goods being specifically described in Tariff Heading 84.04 as Super Heater for boilers, should be classified under this heading based on Section Note 2(a) of Section XVII. This analysis underscores the importance of consistency in classification arguments and the relevance of specific descriptions in determining the appropriate tariff heading for goods under customs classification.