Tariff classification must follow chapter and section notes; ignoring material objections makes the appellate order unsustainable.

Customs tariff classification must be determined by applying the relevant chapter and section notes, including exclusions for goods of general use and the rules governing parts of machinery. Classification cannot rest only on the fact that an article is specially shaped to fit a machine, because the tariff contains specific exceptions that must be examined first. Where the appellate authority does not address the assessee's specific classification objections, the order lacks proper reasoning on material issues and is not a speaking order. The impugned classification order was therefore set aside and the matter remanded for fresh decision in accordance with law.

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Issues: Whether the classification of the goods as parts of loading and unloading machinery could be sustained without considering the relevant chapter and section notes, and whether the appellate order, which did not deal with the appellant's specific classification objections, was liable to be set aside and remanded.

Analysis: The appellant's objections were based on the tariff scheme, including exclusion of fasteners as parts of general use under Note 2 to Section XV, the effect of Note 1(g) to Section XVI, and the application of Note 2A to Section XVI for goods classifiable under their respective headings. Those contentions were not examined by the appellate authority. Classification could not rest only on the circumstance that an article had been given a special shape or size to fit a particular machine, because the tariff contains significant exceptions and requires application of the relevant section and chapter notes. The appellate order therefore lacked proper reasoning on the material issues raised.

Conclusion: The appeal was allowed, the impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for fresh decision in accordance with law.

Ratio Decidendi: Classification under the tariff must be determined by applying the relevant chapter and section notes, and an order that ignores material classification objections is not a proper speaking order and cannot stand.

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