Composite meter parts classifiable under Chapter 90, not as electromagnets, where the goods are not electromagnet simpliciter.

Composite goods manufactured for electricity supply meters were held not to be electromagnets simpliciter, but meter components with an electromagnet function. Because the goods were used as parts of an electricity meter and were not shown to be covered by the heading for electromagnets alone, classification under Heading 85.05 was rejected. Heading 90.33, covering parts and accessories not specified elsewhere in Chapter 90, was held to be the proper classification, and Note 2(a) to Chapters 85 and 90 was found inapplicable. The goods were therefore classifiable under Heading 90.33 rather than Heading 85.05.

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Issues: Whether the electromagnet assembly manufactured for electricity supply meters was classifiable under Heading 85.05 as an electromagnet or under Heading 90.33 as a part of an electricity supply meter.

Analysis: The product was found not to be an electromagnet simpliciter but a combination of an electromagnet and a power factor, designed for use as a meter part. The Revenue's reliance on the principal function of an electromagnet was not accepted because the goods were not merely an electromagnet and were not shown to be covered by the heading for electromagnets alone. The goods were also accepted as a part of an electricity meter, and electricity supply meters themselves fall under Heading 90.28. On that basis, Heading 90.33, which covers parts and accessories not specified elsewhere in Chapter 90, was held to be the proper classification. Note 2(a) to Chapters 85 and 90 was held inapplicable because the goods were not goods included in the relevant headings of those chapters.

Conclusion: The goods were correctly classifiable under Heading 90.33 of the Central Excise Tariff Act, 1985 and not under Heading 85.05; the appeal was allowed and the assessee succeeded.

Ratio Decidendi: A composite goods used as a component of an electricity meter, and not an electromagnet simpliciter, is classifiable as a part of the meter under the residuary parts entry of Chapter 90 rather than under the heading for electromagnets.

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