1989 (11) TMI 163 - AT - Customs

Tribunal rules for Revenue in equipment classification case, emphasizing correct tariff headings and import presentation.

The Tribunal ruled in favor of the Revenue department, setting aside the Collector (Appeals) order that classified imported equipment under Heading 85.13 ... Electronic Tax Equipment Issues:Classification of imported equipment under specific headings, assessment based on Section Note under Chapter XVI of the Customs Tariff, interpretation of relevant provisions for classification of goods.Analysis:The case involved a dispute regarding the classification and assessment of imported equipment by M/s. Calcutta Telephones. The equipment was imported in ten consignments for installation and commissioning of Electronic Tax equipment. The Asstt. Collector rejected the clarification of the respondents to assess the imports under Heading 85.13, stating that no single consignment contained a complete telephone exchange. On appeal, the Collector of Customs (Appeals) allowed the classification under Heading 85.13, leading to the department's appeal.The department contended that since the contract was not registered under the Project Imports (Registration of Contract) Regulation, 1965, the entire system imported in ten consignments should not be assessed under 84.66. The departmental representative relied on a previous judgment and argued for classification based on specific headings under chapters 84 and 85, emphasizing that goods should be classified accordingly.The respondents argued that the purchase order clearly specified the import of a complete set of Electronics Tax equipment, even though imported in multiple consignments. They supported the Collector's decision, highlighting the nature of the equipment ordered and imported.The Tribunal noted that no single consignment constituted a complete telephone exchange as per the original order. The assessment had to be based on how the goods were presented for import. The Tribunal referred to relevant tariff headings and Section Notes under Chapter XVI, emphasizing that the assessment should align with the goods' presentation for import.The Tribunal analyzed the provisions under Chapter XVI, specifically noting the classification rules for parts of machines and equipment. The Tribunal referred to the C.C.N. Explanatory Notes, which provided guidance on the classification of functional units and components. Based on this analysis, the Tribunal concluded that the Collector (Appeals) had erred in classifying the components of the exchange under Heading 85.13, treating them as a complete exchange. The appeal by the Revenue was allowed, setting aside the Collector (Appeals) order.In a separate opinion, Shri V.P. Gulati concurred with the analysis and reasoning presented in the order. The assessment was deemed appropriate based on the goods' presentation for import, and the Collector (Appeals) misdirected in classifying the components under a single heading. The persuasive value of the C.C.N. Explanatory Notes further supported the decision to set aside the Collector (Appeals) order and allow the Revenue's appeal.