Classification of assembled wrist watches under the tariff turns on whether complete watches fall within Heading 91.02, not Heading 91.10.

Wrist watches assembled from parts were treated as classifiable under Heading 91.02 rather than Heading 91.10, because the tariff scheme and Chapter Note 2 were read as covering watches beyond those made of precious metal, including base-metal cases. Heading 91.10 was understood to apply to watch movements, not complete watches. On the facts recorded in the panchnama, the assembled goods were regarded as watches, and the contention that assembly did not amount to manufacture was not accepted at that stage. Interim stay of the impugned order was granted.

---

---

Issues: Whether wrist watches assembled from parts were classifiable under Heading 91.02 or Heading 91.10 of the Central Excise Tariff Act, 1985; and whether the activity of assembly amounted to manufacture for the purpose of central excise duty.

Analysis: The tariff scheme for Heading 91.01 and Heading 91.02, read with Chapter Note 2, was treated as covering watches beyond those made of precious metal, and the absence of precious metal did not exclude watches with base-metal cases from Heading 91.02. Heading 91.10 was viewed as covering watch movements and not complete watches. On the facts recorded in the panchnama, the goods were considered to be watches, and the plea that assembly did not amount to manufacture was not accepted at this stage.

Outcome: Interim stay of the impugned order was granted.

---