1987 (6) TMI 288 - AT - Customs

Tribunal reclassifies 'Hand Operated Knitting Machines' as domestic use under CTA

The Tribunal allowed the appeal and ordered the classification of the 'Hand Operated Knitting Machines with Punch Cards -Model 840' under Heading 84.37(1) ... Classification Issues:Classification of 'Hand Operated Knitting Machines with Punch Cards -Model 840' under Heading 84.37(2) CTA by Custom House vs. appellants' claim for assessment under Heading 84.37(1) CTA.Detailed Analysis:The Tribunal was tasked with determining whether the imported knitting machines were domestic machines or not. The appellants contended that the imported goods were not domestic machines. Reference was made to a previous judgment, but the Tribunal emphasized the need to focus on the facts of the present case rather than relying solely on past decisions involving different models of knitting machines. The classification hinged on whether the imported goods were suitable for domestic use.Both sides presented arguments regarding the nature of the imported knitting machines. The appellants argued that the machines were designed for industrial use due to their complexity and capabilities, which included tasks relevant for large-scale production. On the other hand, the respondent argued that the machines could also be used domestically for sophisticated knitting tasks, citing examples of pattern knitting. The respondent relied on a judgment to support the assertion that even if industrial units used a machine, it could still be considered domestic.The appellants highlighted the machine's ability to use various types of yarn and its higher cost compared to domestic machines. They emphasized that the machine's features and applications were more suited for industrial purposes rather than household use. The respondent countered by stating that the machine's capabilities, including pattern knitting, could be useful in households, especially for middle-class families.The Tribunal considered the arguments from both sides and examined evidence provided by the appellants, including a letter stating the industrial use of the machines in a factory and a person using the machine in a household. Despite the evidence, the Appellate Collector dismissed the appeal, concluding that the imported goods were domestic knitting machines based on the catalogue description and weight comparison.The Tribunal addressed the Interpretative Rule 3, emphasizing the need for goods to be classifiable under both headings for the rule to apply. The relevant headings in question were 84.37(1) and 84.37(2), distinguishing between domestic and non-domestic knitting machines. The Tribunal analyzed the capabilities and features of the imported machine, concluding that it was more suited for industrial use based on its complexity, capacity, and price, thereby allowing the appeal and ordering classification under Heading 84.37(1) CTA.