2018 (2) TMI 240 - AT - Customs

Classification of imported goods - Shriram Brand water dispensers model YLRS1-5K/B-20 - whether classified under CTH 84186920 as refrigerator or otherwise? - N/N. 14/2008-CE(NT) dated 01.03.2008 - Held that - Indubitably, the impugned goods are composite goods, and hence, the component which provides the machine its essential character will be determined the factor for classification. The principal function of the goods is that of a dispenser of hot and cold water with an added feature of a mini refrigerator. Hence, the lower appellate authority is spot on in his conclusion that the impugned items are required to be classified as water dispenser and not as a refrigerator - appeal dismissed - decided against Revenue.

Summary

Issues: Classification of imported goods as water dispenser or refrigerator, application of notification No.14/2008 for assessment

Classification of Goods:
The case involved the classification of imported goods declared as a water dispenser refrigerator. The original authority classified the goods under CTH 84186920 as a refrigerating unit with the feature of cooling and dispensing water. The lower appellate authority determined that the goods were primarily a water dispenser with an additional feature of a mini refrigerator. The appellate tribunal agreed with the lower authority's analysis, stating that the goods should be classified as a water dispenser and not a refrigerator based on the predominant function of dispensing water. The tribunal emphasized that when a product can perform multiple functions, it should be classified based on its principal purpose, which in this case was water dispensing.

Application of Notification No.14/2008 for Assessment:
The department argued that the goods should be subject to RSP based assessment under Notification No.14/2008 due to the presence of a refrigerating unit with storage capabilities. The department contended that since the goods contained a refrigerator and provision for water dispensing, refrigeration was the principal function, making them liable for excise duty based on MRP. However, the tribunal disagreed with this argument, stating that the impugned goods were composite goods with the essential character of a water dispenser. The tribunal upheld the lower appellate authority's decision that the goods should be classified as a water dispenser and not a refrigerator, thereby dismissing the appeal filed by the Revenue.

In conclusion, the appellate tribunal upheld the lower appellate authority's decision regarding the classification of the imported goods as a water dispenser based on their principal function. The tribunal rejected the department's argument for RSP based assessment under Notification No.14/2008, emphasizing that the goods were composite with the essential character of a water dispenser, leading to the dismissal of the Revenue's appeal.