End-use based classification requires factual verification before treating goods as parts or general use items.

Classification of the disputed goods depended on whether they were specially designed and used only as parts or components of the specified plant, or whether they were general iron and steel items of wider use. The record showed that the lower authorities relied mainly on material composition without properly verifying the end-use claim or examining supporting evidence such as customer orders. Because the claimed end use had not been tested and no contrary use had been established with evidence, fresh factual verification was required. The matter was remanded for de novo consideration, with the classification claim to be accepted if the asserted end use was verified and no contrary evidence emerged.

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Issues: Whether the disputed items were to be classified on the basis of their claimed end use as parts/components of the relevant system or on the basis of their constituent material as parts of general use.

Analysis: The classification dispute turned on whether the goods were specially designed for the assessee's specified plant/system and used only for the stated end purpose, or whether they were general iron and steel items capable of other uses. The record showed that the lower authorities had proceeded mainly on the material composition of the goods without verifying the assessee's end-use claim or examining customer orders and other supporting evidence. Since the end-use assertion had not been tested and the Revenue had not shown with evidence the precise other use of the items, a factual verification was necessary before a final classification could be affirmed.

Conclusion: The classification issue was remanded for fresh verification and de novo consideration, and the assessee's classification claim was to be accepted if the claimed end use was verified and no contrary evidence was shown.

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