Essential character governs composite goods classification, so a water dispenser with mini-refrigerator was not treated as a refrigerator.

Composite goods are classified by their essential character and predominant function, not by the presence of an auxiliary component. A hot and cold water dispenser with an inbuilt mini-refrigerating unit was treated as a water dispenser because it was known and sold as such, and the refrigerating element did not make it a refrigerator in functional terms. On that basis, the tariff classification as a refrigerator was rejected, and the notification for MRP-based assessment was held inapplicable on the footing that the goods were refrigerators.

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Issues: Whether the imported water dispenser with an inbuilt mini-refrigerator was classifiable as a refrigerator for tariff purposes and liable to MRP based assessment under the relevant notification.

Analysis: The imported item was a composite machine having a hot and cold water dispenser with a mini refrigerating unit. The competing approaches were that the presence of the refrigerating unit made it a refrigerator, or that the dispenser was the principal machine and the refrigerating unit was only an added feature. Applying the principle governing composite machines, the component giving the goods their essential character and the function which is predominant must control classification. On the facts, the goods were known and sold as a water dispenser, and the refrigerating element did not convert it into a refrigerator in the functional sense. The notification for MRP based assessment was therefore not attracted on the footing that the goods were refrigerators.

Conclusion: The goods were correctly classified as water dispensers and not as refrigerators, and the Revenue's challenge to the exemption from MRP based assessment failed.

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