Forgings retain forged identity: Rule 2(a) cannot shift classification to Chapter 87 without essential character as parts.

Steel forgings produced by drop forging and subjected to further machining, such as trimming, facing, boring, milling, drilling, tapping, threading, grinding, broaching, hardening and tempering, were held to retain their forged identity. Rule 2(a) of the Interpretative Rules could not be applied because the goods had not acquired the essential character of parts for Chapter 87 classification. Classification under Chapter 87 was rejected, and the claim for Chapter 72 with Notification No. 208/83 was accepted, with the tariff dispute decided in favour of the assessee.

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Issues: Whether steel forgings manufactured through drop forgings were classifiable under Chapter 87 by applying Rule 2(a) of the Interpretative Rules, or under Chapter 72 with the benefit of Notification No. 208/83.

Analysis: The classification dispute turned on whether the goods, though subjected to trimming, facing, boring, milling, drilling, tapping, threading, grinding, broaching, hardening and tempering, had ceased to remain forged goods and acquired the essential character of parts for classification under Chapters 84 to 87. Relying on earlier Tribunal decisions, the Tribunal held that the goods continued to remain in the forged state and that Rule 2(a) could not be invoked because the goods had not acquired the essential character necessary for classification as parts under Chapter 87.

Conclusion: The classification under Chapter 87 was rejected and the claim for classification under Chapter 72 was accepted; the appeal was allowed in favour of the assessee.

Final Conclusion: The impugned classification order was set aside, and the assessee succeeded on the tariff classification issue.

Ratio Decidendi: Forgings that retain their forged identity and do not acquire the essential character of a part cannot be classified by applying Rule 2(a) under Chapter 87.

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