Specific tariff heading prevails over machine-parts classification; bought-out accessories excluded from assessable value.

Parts of refrigerant compressors that are themselves covered by a specific heading in Chapter 84 must be classified in that heading rather than as compressor parts under a broader residual sub-heading, because the specific tariff entry prevails under the Rules for Interpretation and the Section XVI notes. The Tribunal also held that bought-out accessories supplied with refrigerating gas compressors, including drive sets, V-belts, flexible couplings, pulleys and base plates, were not part of the manufactured goods and were excluded from assessable value. The Commissioner's classification was upheld and the revenue challenge failed; the assessee also succeeded on valuation.

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Issues: (i) Whether parts of refrigerant compressors were correctly classifiable under the appropriate headings of Chapter 84 rather than as compressor parts under sub-heading 8414.92; (ii) Whether the value of bought-out accessories supplied with refrigerating gas compressors was includable in the assessable value.

Issue (i): Whether parts of refrigerant compressors were correctly classifiable under the appropriate headings of Chapter 84 rather than as compressor parts under sub-heading 8414.92.

Analysis: Note 2(a) to Section XVI requires goods which are themselves included in any heading of Chapter 84 or 85 to be classified in their own heading. The specific heading prevails over a general heading under Rule 3(a) of the Rules for Interpretation of the Schedule to the Central Excise Tariff Act, 1985. The HSN Explanatory Notes also recognise that parts which are themselves articles covered by a heading of Section XVI are to be classified in their own appropriate heading, and not as parts of the machine merely because they are used with it.

Conclusion: The classification adopted by the Commissioner was upheld, and the Revenue's challenge on this issue failed.

Issue (ii): Whether the value of bought-out accessories supplied with refrigerating gas compressors was includable in the assessable value.

Analysis: The value of bought-out items such as drive sets, V-belts, flexible couplings, pulleys and base plates was held to be excluded from the assessable value of the manufactured compressors, in line with the Tribunal's earlier view on the same question.

Conclusion: The bought-out accessories were not required to be included in the assessable value, and the assessee succeeded on this issue.

Final Conclusion: The impugned order was sustained in full and the Revenue appeal failed.

Ratio Decidendi: Where an item is itself classifiable under a specific tariff heading, it cannot be classified merely as a part of a machine under a broader heading, and bought-out accessories not forming part of manufacture are not includable in the assessable value.

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