End-use-based tariff classification governs mobile storage systems, requiring segregation of clearances and fresh duty computation.

Mobile storage systems and their components were examined for tariff classification under Heading 9403 as furniture or Heading 7308 as steel structures, with the notes indicating that classification turns on statutory chapter notes, the goods' design and intended commercial end use. The analysis treated mobility as non-decisive where the articles functioned as floor-placed storage furniture, while recognising that large shelving for shops, workshops and storehouses could fall under Heading 7308. Where the same goods may answer different headings depending on declared end use, clearances must be segregated and the duty recomputed on that basis.

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Issues: (i) Whether mobile storage system and components thereof were classifiable under Heading 9403 as furniture or under Heading 7308 as steel structures, and whether the classification depended on the goods' design and end use; (ii) Whether the duty demand required confirmation or had to be set aside and redetermined after segregation of clearances under the two headings.

Issue (i): Whether mobile storage system and components thereof were classifiable under Heading 9403 as furniture or under Heading 7308 as steel structures, and whether the classification depended on the goods' design and end use.

Analysis: The classification was examined with reference to Chapter Note 2 of Chapter 94, Section Note 1(k) of Section XV, and the HSN explanatory notes. The goods consisted of mobile blocks on rails, used as shelving/storage systems, and the notes to Chapter 94 showed that mobility was not decisive where the articles were designed for floor placement and use as furniture. At the same time, the HSN notes under Heading 7308 covered large-scale shelving for shops, workshops and storehouses, so the commercial and end use of the system was material. The reasoning accepted that the same type of entity could fall under different headings depending on whether it was tailored for use in dwellings, offices, hospitals and similar premises or for use in shops, workshops and storehouses.

Conclusion: The classification was not fixed universally under only one heading and had to be determined with reference to end use; the matter was decided in favour of a use-based classification approach.

Issue (ii): Whether the duty demand required confirmation or had to be set aside and redetermined after segregation of clearances under the two headings.

Analysis: Since the classification could fall under either Heading 7308 or Heading 9403 depending on the customer's declared end use, the demand could not be sustained without fresh working out of clearances. The record showed that the authority had to segregate the clearances and rework the duty on that basis, with supporting documents to be produced by the assessee.

Conclusion: The confirmation of demand was set aside and the matter was remanded for redetermination.

Final Conclusion: The appeals succeeded only to the extent that the existing duty confirmation was vacated and the classification and demand were sent back for fresh decision on the basis of end use and segregation of clearances.

Ratio Decidendi: For storage systems of this kind, tariff classification under the excise schedule depends on the statutory chapter notes and the intended commercial end use, and where the same goods may fall under different headings, the duty demand must be redetermined accordingly.

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