Tariff classification of synthetic industrial diamonds: dust-and-powder entry excluded, synthetic-stone heading applied instead.

Synthetic industrial diamonds imported in the form in which they were produced were not covered by Heading 71.04, because that heading applies only to dust and powder obtained from natural or synthetic precious or semi-precious stones by crushing, grinding, polishing or similar processing. Heading 71.02 was also inapplicable because it is confined to natural precious and semi-precious stones. The proper classification was Heading 71.03, which covers synthetic precious or semi-precious stones, and reassessment was directed accordingly.

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Issues: Whether synthetic industrial diamonds imported in the size and form in which they were produced were classifiable under Heading 71.04 as dust and powder of natural or synthetic precious or semi-precious stones, or under Heading 71.02, or under Heading 71.03 of the Customs Tariff Act, 1975.

Analysis: Heading 71.04 covers dust and powder of natural or synthetic precious or semi-precious stones, which implies material obtained from such stones by crushing, grinding, polishing, or similar processing. The imported goods were synthetic industrial diamonds produced as such in the form imported, and it was not the case that they emerged from crushing or other processing of stones. On that basis, Heading 71.04 was inapplicable. Heading 71.02 was also held inapplicable because it was confined to natural precious and semi-precious stones, whereas the goods were synthetically produced. The remaining and appropriate entry was Heading 71.03, which is wide enough to cover synthetic precious or semi-precious stones.

Conclusion: The goods were not classifiable under Headings 71.02 or 71.04 and were classifiable under Heading 71.03, with reassessment directed accordingly, in favour of the assessee.

Final Conclusion: The imported synthetic industrial diamonds were held to fall outside the competing duty headings pressed by the department and were directed to be reassessed under the residual synthetic-stone heading, with consequential relief if admissible.

Ratio Decidendi: A tariff entry for dust and powder of precious or semi-precious stones applies only to goods obtained from such stones by crushing, grinding, polishing, or similar processing, and not to synthetic stones produced in that form ab initio; where the specific natural-stone entry also does not fit, the appropriate synthetic-stone heading must be applied.

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