Carbon-based heat-exchanger parts classifiable under Chapter 68, not as machinery parts under Chapter 84.

Imported graphite/carbon parts of heat exchangers were treated as articles of carbon under Heading 68.01/16 rather than as machinery parts under Heading 84.17. The classification turned on Note 2(b) to Section XVI and Note 1 to Chapter 84, which excludes Chapter 84 goods falling within Chapter 68. The Tribunal followed its larger-bench view that carbon-based machine parts remain classifiable in Chapter 68, and held that Chapter 28 covers chemical elements and compounds, not articles made from them. Graphite, as a form of carbon, did not remove the goods from Chapter 68.

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Issues: Whether imported graphite/carbon parts of heat exchangers were classifiable under Heading 84.17 of the First Schedule to the Customs Tariff Act, 1975 as parts of machinery, or under Heading 68.01/16 as articles of carbon falling in Chapter 68.

Analysis: The classification depended on the interaction between Note 2(b) to Section XVI and Note 1 to Chapter 84, which excludes from Chapter 84 articles falling within Chapter 68. The Tribunal followed its larger-bench view that even machinery parts made of carbon are covered by Chapter 68 and not by Heading 84.65 or analogous machinery-part headings. It also held that Chapter 28 covers chemical elements and compounds, not articles made from them, and that graphite, being a form of carbon, did not take the goods outside Chapter 68. The goods were therefore properly classifiable as articles of carbon under Heading 68.01/16.

Conclusion: The classification under Heading 68.01/16 was correct and the claim for Heading 84.17 failed.

Final Conclusion: The appeal was rejected, and the departmental classification was sustained.

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