Classification of forged goods turns on whether machining has created identifiable machinery parts; unfinished forgings remain under Chapter 72.

Forged goods do not become machinery parts merely because they are ready for further machining; they acquire that character only when machining and finishing give them a definite shape, name, character and use as identifiable parts. Here, the products were die forgings that had undergone only skin cutting, proof machining and some customer-side processes, without precision machining or completion into distinct parts. They therefore remained classifiable as forgings under Chapter 72 and did not qualify as machinery parts; the concessional treatment linked to that classification followed accordingly.

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Issues: Whether the impugned forged products were classifiable as forgings under Chapter 72 and entitled to the concessional rate under Notification No. 174/88-C.E. dated 13-5-1988, or whether they had already assumed the character of machinery parts.

Analysis: The goods were manufactured as die forgings and had not undergone precision machining. The record showed only processes such as skin cutting, proof machining and further customer-side machining, threading and boring before use. Forged products do not cease to be forgings merely because they are ready for further machining; they assume the character of machine parts only when machining and other finishing processes give them a definite shape, name, character and use as such parts. On the facts found, the products had not crossed that stage and remained forged products under Chapter 72.

Conclusion: The forgings were not machinery parts and were classifiable as forgings under Chapter 72, with the consequence that the Revenue's classification was unsustainable and the assessee's claim succeeded.

Ratio Decidendi: Forged goods do not acquire the character of machinery parts until they are precision machined or otherwise processed into identifiable parts with a distinct commercial identity; goods remaining at the forging or proof-machining stage continue to be classifiable as forgings.

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