Customs classification of automatic regulators turned on the full control-system test under Heading 90.32 and failed.

Electronic automatic regulators imported for customs purposes were considered against Heading 9032.89 and Heading 8543.89 of the Customs Tariff. Classification under Heading 90.32 required the goods to meet the composite features of an automatic regulating or controlling system under Note 6 to Chapter 90 and the HSN Explanatory Notes, including measuring, controlling and operating functions. Although the goods received signals from remote sensors and transmitted signals to actuators and valves, they did not themselves satisfy the required operating-device element. The claimed classification under Heading 9032.89 was therefore rejected, and the Revenue's position was accepted.

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Issues: Whether the electronic automatic regulator imported by the respondent was classifiable under Heading 9032.89 or under Heading 8543.89 of the First Schedule to the Customs Tariff Act.

Analysis: The classification depended on whether the goods answered the description of automatic regulating or controlling instruments and apparatus covered by Note 6 to Chapter 90 and the Explanatory Notes to Heading 90.32. Those notes contemplate a complete automatic control system consisting essentially of a measuring device, a controlling device, and a starting, stopping or operating device. On the material before it, the goods received signals from remotely mounted sensors and sent signals to remotely mounted actuators and valves, but did not themselves satisfy the requirement of having the necessary operating device within the meaning of the heading. The finding that the goods did not satisfy the HSN explanatory requirements was not rebutted.

Conclusion: The goods did not qualify for classification under Heading 9032.89 and were not entitled to the respondent's claimed classification.

Final Conclusion: The tariff classification claimed by the respondent was rejected and the Revenue's appeal succeeded.

Ratio Decidendi: For classification under Heading 90.32, the goods must satisfy the composite characteristics of an automatic control system as contemplated by the relevant chapter note and HSN Explanatory Notes, including the requisite measuring and operating functions.

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