Tariff classification of forklift solid tyres favours Heading 98.06 over Heading 40.12 when headings compete.

Solid tyres designed only for forklift trucks were analysed for tariff classification under the Customs Tariff Act. The article explains that Section Note 1(a) to Section XVI excluded vulcanised rubber articles used in machinery or for technical uses, so the tyres were not classified there merely because they were forklift parts. Chapter 98, through Heading 98.06 and Chapter Note 1, was treated as applicable even where the goods might also fit a more specific heading elsewhere in the Schedule. On a harmonious reading of the headings and notes, the tyres were classifiable under Heading 98.06; alternatively, where two headings were equally applicable, Rule 3(c) required use of the heading occurring last in numerical order.

---

---

Issues: Whether solid tyres designed for forklift trucks were classifiable under Heading 40.12 of the First Schedule to the Customs Tariff Act, 1975 or under Heading 98.06 read with Chapter Note 1 to Chapter 98, and whether the later heading was to be preferred when more than one heading was arguably applicable.

Analysis: The tyres were found to be designed only for forklift trucks and not interchangeable for motor vehicles. Section Note 1(a) to Section XVI excluded articles of vulcanised rubber of the kind used in machinery or for technical uses, so the tyres could not be brought under Section XVI merely because they were parts of forklift trucks. Chapter 98, however, contains Heading 98.06 covering parts of machinery, equipment, appliances, instruments and articles of Chapters 84, 85, 86, 89 and 90, and Chapter Note 1 directs that the chapter applies even where the goods may also be covered by a more specific heading elsewhere in the Schedule. On a harmonious reading of the headings and notes, the tyres were held eligible for classification under Heading 98.06. Even otherwise, where the goods were prima facie classifiable under both headings, Rule 3(c) required classification under the heading occurring last in numerical order.

Conclusion: The goods were classifiable under Heading 98.06 and not confined to Heading 40.12; the assessee's classification claim succeeded.

Final Conclusion: The assessment was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where goods are prima facie classifiable under two headings, the interpretation notes must be read harmoniously, and in case of competing equally applicable headings the heading occurring last in numerical order prevails.

---