Classification of hydraulic gear pumps under Section XVII exclusions supports waiver of pre-deposit and stay of recovery.

Note 2(e) to Section XVII excludes machines and apparatus of Heading Nos. 84.01 to 84.79, and their parts, from the expressions "parts" and "parts and accessories" for Chapter 87; on that basis, hydraulic gear pumps were treated as excluded from Section XVII. The Tribunal relied on the HSN Explanatory Notes and held that the applicants had shown a strong prima facie case for classification relief. The earlier decision on steel and aluminium water tanks was distinguished because those goods fell under Chapter 73 and were not affected by Note 2 to Section XVII. Pre-deposit of duty and penalty was dispensed with and recovery stayed pending appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the duty demand and penalty arising from classification of hydraulic gear pumps.

Analysis: The order records that Note 2(e) to Section XVII excludes machines and apparatus of Heading Nos. 84.01 to 84.79 and their parts from the expression "parts" and "parts and accessories" for Chapter 87. The HSN Explanatory Notes were relied upon to indicate that pumps are excluded from Section XVII by virtue of that note. The Tribunal also found that the cited earlier decision concerning steel and aluminium water tanks was distinguishable on the basis that the goods there were from Chapter 73 and were not excluded by Note 2 to Section XVII.

Outcome: The applicants were found to have a strong prima facie case, and pre-deposit of duty and penalty was dispensed with with stay of recovery pending the appeal.

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