2002 (2) TMI 174 - AT - Customs

Summary

Issues:
Classification of car alarm and locking system under Customs Tariff Headings 8301.20 and 8531.10.

Analysis:
1. The dispute in this case revolves around the classification of 500 sets of car alarm and locking systems imported by the appellants. The appellant claimed classification under Customs Tariff Heading 8301.20, while the authorities held that the correct classification is under Heading 8531.10, which also affects import policy and licensing requirements.

2. The key issue to be resolved is whether the car alarm and locking system should be classified as "locks for motor vehicles" under 8301.20 or as "burglar or fire alarms and similar apparatus" under 8531.10. The decision hinges on whether the locking system or the alarm is the main component in the combination product.

3. The goods in question consist of a combination of car locking system and alarm. The appellants argue that the locking system is the main part, while the authorities, as per the impugned order, determined that the alarm system is the primary component based on the product description in the catalogue.

4. The appellate order upheld the original authority's findings and referred to section notes under the Customs Tariff Schedule. The appellant argued that the section note under Section XV should not apply to the classification under Chapter 83 as Heading 8301 specifically covers various locks, including electrically operated ones for motor vehicles.

5. The appellant contended that the security of movable property like cars primarily relies on a reliable locking system, contrasting it with alarm systems used for immovable properties. The appellant provided evidence regarding the cost and value of components in the combination product to support their classification argument. The appellate authority also considered the relative importance and value of the locking and alarm components in determining the classification.

6. Ultimately, the Tribunal found in favor of the appellants, concluding that the car locking and alarm system should be classified as a car lock under Heading 8301.20. The appeal was allowed, providing consequential relief to the appellants based on the findings presented.