1999 (3) TMI 281 - AT - Customs

Summary

Issues Involved:
1. Classification of the imported "Hot Melt Equipment" under the appropriate heading of the Customs Tariff Act.
2. Entitlement to the benefit of Notification No. 59/87-Cus., dated 1-3-1987.

Detailed Analysis:

1. Classification of the Imported "Hot Melt Equipment":

The appellant firm imported "Nordson Hot Melt Equipment" comprising a Nordson Model 3700 Applicator, a Hose, an Extrusion Gun, a Solenoid, and Nozzles. They claimed classification under Heading 8479.40 of the Customs Tariff Act, 1975, which was initially accepted by the Customs Authorities but later reclassified under Heading 8424.20. The Customs Authorities justified this reclassification by determining that the equipment was akin to "spraying appliances" under Heading 8424.20, rather than "other machinery" under Heading 8479.40. The Assistant Commissioner and the Commissioner (Appeals) upheld this classification, emphasizing that the primary function of the equipment was not to heat the material but to apply it on the object through extrusion from a gun nozzle.

Upon appeal, the Tribunal agreed with the Department's classification under Heading 8424.20, noting that the equipment's principal function was to deliver molten adhesive at the desired place, similar to spray guns. The Tribunal also rejected the appellant's alternative classification under Heading 84.19, as the equipment did not primarily function to treat materials by a process involving a change of temperature.

2. Entitlement to the Benefit of Notification No. 59/87-Cus., dated 1-3-1987:

The appellants contended that even if the equipment was classified under Heading 8424.20, it should still be entitled to the benefit of Notification No. 59/87-Cus., which provides a concessional rate of duty for certain mechanical appliances for spraying liquids or powders other than paint, varnish, oil, distemper, or cement. The Tribunal found merit in this argument, noting that the equipment was indeed a mechanical appliance used for spraying liquids other than the specified excluded materials.

The Tribunal observed that the equipment was designed to apply molten adhesives through an electrically heated extrusion gun with nozzles, fitting the description of mechanical appliances covered by Serial No. 17 of the Notification. Consequently, the Tribunal held that the appellants were entitled to the benefit of the said Notification, as the equipment was not excluded by any specific provision of the Notification.

Conclusion:

The Tribunal concluded that while the Department was justified in classifying the equipment under Heading 8424.20, the appellants were entitled to the benefit of Notification No. 59/87-Cus., as amended. The appeal was thus partially allowed, granting the appellants the concessional rate of duty under the said Notification.