Machine classification for large equipment cleared in parts upheld where the transaction showed supply of the complete machine.

Paper making machinery cleared in segments against a single purchase order remained classifiable as the complete machine under SH 8439.10 because the transaction showed supply of the machine as such, not isolated parts. The record did not indicate that the entire machine could be manufactured and removed in one piece, and trade practice for large machinery supported piecemeal clearance under one duty-paying document. Rule 2(a) of the Interpretative Rules and Note 5 to Section XVI were held inapplicable on these facts. The goods were therefore correctly classified as paper making machinery, not parts under SH 8439.90, and the Revenue's challenge failed.

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Issues: Whether paper making machinery cleared in parts under a single purchase order was classifiable as a complete machine under SH 8439.10 or as parts under SH 8439.90.

Analysis: The goods were cleared against one purchase order for a paper making machine, and the record did not show that it was commercially or practically feasible to manufacture the entire machine in one piece and keep it ready for removal. The accepted trade practice in respect of large machines is manufacture and clearance in segments under a single duty-paying document. In that setting, Rule 2(a) of the Interpretative Rules and Note 5 to Section XVI were considered inapplicable to deny machine classification merely because the clearances were made piecemeal. The concurrent findings of the lower authorities were found to be sound and consistent with the manner in which the goods were manufactured and removed.

Conclusion: The goods were correctly classified as a paper making machine under SH 8439.10 and not as parts under SH 8439.90, and the Revenue's challenge failed.

Ratio Decidendi: Where a large machine is manufactured against a single purchase order and cleared piecemeal under one duty-paying document, the goods may still be classified as the complete machine if the overall transaction shows supply of the machine as such rather than isolated parts.

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