Imported machine tools classification turns on interchangeability with the specific machine and exemption eligibility.

The note examines whether transfer and additional tools imported with an automatic flow forming machine were classifiable as interchangeable tools under heading 82.07 or as parts of the machine under heading 8462.99, and whether exemption under Notification No. 40/78-Cus. applied. It states that, on one view, the tools were specially imported for the particular machine, were not shown to be independently usable or interchangeable with other machines, and were therefore integral parts classifiable under heading 8462.99, preserving the exemption. The note also records a concurring opinion taking the opposite view on interchangeability, limitation, and exemption.

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Issues: Whether the transfer tools and additional tools imported with the automatic flow forming machine were classifiable under heading 82.07 as interchangeable tools or under heading 8462.99 as part of the machine, and whether they were entitled to exemption under Notification No. 40/78-Cus.

Analysis: The tools were imported specially for use with the particular machine for manufacturing detonator tubes of different sizes. They were not shown to be tools interchangeable with other machines or capable of independent use in the sense required by heading 82.07. The reasoning adopted in the earlier decisions on interchangeable tools was followed, namely that interchangeability must be judged with reference to the particular machine and not by whether the tool can perform different jobs. On the facts, the tools were integral to the imported machine, correctly classifiable under heading 8462.99, and the machine as classified originally continued to qualify for the exemption notification.

Conclusion: The tools were not classifiable under heading 82.07 and were correctly classifiable under heading 8462.99. The benefit of Notification No. 40/78-Cus. was available. The appeal succeeded.

Concurring Opinion: The majority view held that the notice was within limitation and that the accompanying tools were interchangeable tools classifiable under heading 82.07, with the result that the exemption was not available and the appeal had to be rejected.

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