Customs tariff classification of silver powder suspension turns on its use as a processing material, not silver content.

Imported silver powder suspension used to form electrodes in ceramic capacitors was classified by reference to its true commercial and technical character, not merely its silver content. Although the lower authorities relied mainly on the fact that the material contained more than 2% silver, the decisive consideration was that it functioned as a special chemical suspension for processing ceramic substances in electronic component manufacture. On that basis, it was not treated as a silver article under Chapter 71 of the Customs Tariff Act, but as a processing material falling under Chapter 32, with the classification adopted in favour of the importer.

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Issues: Whether the imported silver powder suspension was correctly classifiable under Chapter 71 of the Customs Tariff Act as a silver manufacture, or was classifiable under Chapter 32 as a processing material for ceramic capacitors.

Analysis: The lower authorities proceeded mainly on the basis that the material contained more than 2% silver, but the decisive question was the true nature of the imported article. The technical write-up showed that the substance was a special chemical suspension used to form electrodes on ceramic substances in the manufacture of ceramic capacitors, and the subsequent notification also treated silver powder suspension as a material used for such electronic components. On that basis, the import was not to be treated merely as a silver article falling in Chapter 71, but as a material appropriately relatable to Chapter 32.

Conclusion: The imported goods were not correctly classifiable under Chapter 71 and were held assessable under Chapter 32, in favour of the assessee.

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