Classification of leather cut pieces by intended use denied exemption where goods were completed seat-cover material, not Chapter 41 waste.

Finished leather cut to a specific design for use as motor vehicle seat covers was treated as goods having acquired the character of the intended article, so Chapter 41 could not be applied merely because the items did not fit elsewhere. Rule 2(a) of the General Rules for Interpretation required classification by the completed character and intended use, and Chapter 41 could not operate as a default residual heading where possible classification existed under other chapters. The expression "unsuitable for the manufacture of leather articles" was held inapplicable to these goods, so the claim to exemption under Notification No. 21/2002-Cus, limited to Chapter 41 goods, was denied.

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Issues: Whether the imported leather cut pieces were classifiable under Heading 41152090 as leather waste or, having acquired the character of seat-cover material, fell outside Chapter 41 and were therefore not eligible for exemption under Notification No. 21/2002-Cus.

Analysis: The imported goods were finished leather cut to a specific design for use as seat covers in motor vehicles. Once the goods acquired the description of the intended article, Chapter 41 could not be applied merely because they were not fit within Chapter 42. The existence of other possible classifications, including parts and accessories of motor vehicles in Chapter 87 and parts of seats in Chapter 94, showed that Chapter 41 could not operate as a default residual entry. Applying Rule 2(a) of the General Rules for Interpretation of Import Tariff, the goods were to be understood by their completed character and intended use, and the expression "unsuitable for the manufacture of leather articles" did not fit the imported goods. Since the exemption notification was restricted to goods classifiable under Chapter 41, the claimed benefit was unavailable.

Conclusion: The classification under Heading 41152090 was rejected and the denial of exemption was upheld, in favour of Revenue.

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