1997 (2) TMI 281 - AT - Customs

Tribunal reclassifies goods, rules in favor of Revenue on tariff classification dispute

The Appellate Tribunal CEGAT, MADRAS ruled in favor of the Revenue in an appeal challenging the classification of goods as washers, retaining rings, and ... Classification Issues: Classification of goods under Tariff Headings 84.81 and 73, specifically washers, retaining rings, and steel balls.In this case, the Appellate Tribunal CEGAT, MADRAS heard an appeal filed by the Revenue challenging the lower appellate authority's classification of goods as washers, retaining rings, and steel balls under Tariff Heading 84.81. The Revenue sought assessment under Tariff Heading 73 for washers and retaining rings under 73.18 and for the valves under 73.26. The Department argued that parts of general use, as defined under Note 2 to Section XV of Base Metal, are not covered under Section XVI, where Chapter 84 falls. The Department contended that washers and similar articles fall under Heading 73.18 based on Chapter Note 2 of Section XV. Regarding steel balls, the Department referred to Chapter Note 6 to Chapter 84, which specifies parameters for classification. The Department argued that the imported steel balls did not meet the criteria under Chapter Note 6 and should be classified under Chapter Heading 73.26.The appellant firm's representative argued that the imported items played a functional role in valves and were specifically designed for valve use, thus should be classified under Tariff Heading 84.81. The Tribunal noted that the Customs Tariff is based on the Harmonized System Nomenclature (HSN) and classification should consider Section Notes, Chapter Notes, and Tariff Headings descriptions. The Tribunal agreed with the Department that washers and retaining rings should be classified under Tariff Heading 73.18 based on Section Note 1(g) of Section XVI and Section Note 2 of Section XV. The Tribunal found that the lower authority erred in classifying the goods under Tariff Heading 84.81. Regarding steel balls, the Tribunal found that they did not meet the parameters set out in Chapter Note 6 to Chapter 84 for classification under Heading 84.26. Due to the nature of the steel balls and lack of evidence provided by the appellant, the Tribunal ruled that the steel balls should be classified under Chapter Heading 73.26. Consequently, the Tribunal set aside the lower authority's order and allowed the Revenue's appeal.