Tariff classification as a set and strict exemption wording controlled duty treatment of composite imports and polyester polyols.

Imported stainless steel screws with plastic washers were treated as a composite import that did not fit Tariff Heading 7318.15, because the components had different descriptions and functions; assessment as a set under Section 19(b) applied, with duty chargeable at the highest rate applicable to any item in the set. Polyester polyols were also denied exemption under Notification No. 133/86-C.E. as amended, because the notification covered only polyester resins and the goods did not squarely answer that description. The ratio emphasises strict tariff classification and the confined scope of exemption notifications.

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Issues: (i) whether stainless steel screws imported with plastic washers were classifiable under Tariff Heading 7318.15 or had to be assessed as a set under Section 19(b) of the Customs Act, 1962 and the tariff interpretation rules; (ii) whether polyester polyols were entitled to the benefit of Notification No. 133/86-C.E. as amended.

Issue (i): whether stainless steel screws imported with plastic washers were classifiable under Tariff Heading 7318.15 or had to be assessed as a set under Section 19(b) of the Customs Act, 1962 and the tariff interpretation rules.

Analysis: The screws and washers were imported together, had different descriptions and performed different functions. Heading 7318 covered articles of iron or steel, and the sub-heading relied upon by the importer covered screws whether or not with nuts or washers, but only within that iron and steel tariff structure. Since the imported combination consisted of stainless steel screws with plastic washers, the goods could not be brought within Heading 7318. The matter was therefore treated as a set of articles, and Section 19(b) applied so that duty was chargeable at the highest rate applicable to any item in the set.

Conclusion: The classification under Heading 7318.15 was rejected and assessment under Section 19(b) was upheld, in favour of Revenue.

Issue (ii): whether polyester polyols were entitled to the benefit of Notification No. 133/86-C.E. as amended.

Analysis: The notification extended relief only to polyester resins, not to the whole range of goods falling under the tariff heading. Polyester polyols and polyester resins were treated as distinct products, and no material was produced to establish that the imported polyols answered to the description of polyester resins. Exemption notifications were confined to the goods specifically covered by their terms.

Conclusion: The benefit of Notification No. 133/86-C.E. was denied, and the cross appeal failed, in favour of Revenue.

Final Conclusion: The Revenue succeeded on the classification issue and the importer failed on the exemption claim, so the connected appeals were disposed of with the Revenue prevailing overall.

Ratio Decidendi: Where goods are imported together but the composite import does not satisfy the tariff description of the claimed heading, the goods may be assessed as a set under Section 19(b) of the Customs Act, 1962, and an exemption notification applies only when the goods squarely answer the specific description used in the notification.

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