Classification of transformer insulation parts: specific heading for insulating fittings prevailed over the transformer heading under tariff rules.

Imported transformer board strips used as insulation components for power transformers were held classifiable under the specific tariff heading for insulating fittings, not under the heading for transformers. The Tribunal found that the goods were specially designed as spacers between high- and low-voltage coils, and that insulation was their principal function while spacing and mechanical support were only incidental. It treated the relevant Explanatory Note as persuasive but not controlling, and applied Note 2 to Section XVI of the Customs Tariff Act, 1975 to give precedence to the specific heading for the parts themselves over the heading for the machine or equipment of which they form a part. The lower authorities' classification was upheld.

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Issues: Whether the imported formed insulation components for power transformers were classifiable under the heading for transformers or under the specific heading for insulating fittings for electrical equipment.

Analysis: The goods consisted of transformer board strips specially designed with rounded edges and used as spacers between high- and low-voltage coils. The catalogue of the foreign manufacturer showed that the principal purpose of the strips was insulation, and that spacing and mechanical support were only incidental to that function. The Tribunal treated the Explanatory Note under heading 85.26 of the C.C.E.N. as persuasive but not controlling, and held it inapplicable on the facts. Applying Note 2 to Section XVI of the Customs Tariff Act, 1975, the Tribunal held that where a specific heading exists for the parts themselves, that heading takes precedence over the heading for the machine or equipment of which they form a part.

Conclusion: The goods were correctly classified under heading 85.18/27(1) of the Customs Tariff Act, 1975, and not under heading 85.01(1); the classification adopted by the lower authorities was upheld.

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