Classification of insulated wires and cables under Heading 85.44 barred parts-based exemption for a fly ash handling system.

Insulated wires and cables cleared as part of a fly ash handling system remained classifiable under Heading 85.44, because Note 2(a) to Section XVI required their classification in that heading and prevented treatment as "parts" for classification purposes. As a result, the goods could not be reclassified as parts of the system to claim the benefit of Notification No. 5/98 dated 2-6-98, and the parts-based exemption was unavailable.

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Issues: Whether insulated wires and cables cleared as parts of a fly ash handling system were entitled to the benefit of Notification No. 5/98 dated 2-6-98, and whether such goods could be classified as parts of that system instead of under Heading 85.44.

Analysis: The Tribunal held that wires and cables, in whatever length, remain classifiable under Heading 85.44 and, by Note 2(a) to Section XVI, cannot be treated as parts for classification purposes. On that basis, the goods could not be classified as parts of the fly ash handling system, and the exemption claimed under the notification was not available.

Conclusion: The issue was decided against the assessee and in favour of Revenue; the order of the Commissioner (Appeals) was set aside and the Assistant Commissioner's order was restored.

Ratio Decidendi: Goods specifically classifiable under Heading 85.44 cannot be treated as parts of machinery or systems for the purpose of claiming a parts-based exemption when the section notes mandate their classification in that heading.

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