1994 (9) TMI 189 - AT - Customs

Issues Involved:
1. Classification of the imported Razor Blade Coater machine.
2. Applicability of exemption Notification No. 118/80-Cus.

Detailed Analysis:

1. Classification of the Imported Razor Blade Coater Machine:
The appellants imported a Razor Blade Coater machine in 1984 and sought its classification under Heading No. 84.17(1) of the Customs Tariff Act, 1975, with an alternative classification under Heading No. 84.59(2). The Assistant Collector of Customs classified the machine under Heading No. 84.59(1), and this decision was upheld by the Collector of Customs (Appeals).

Arguments by the Appellants:
- The appellants argued that the machine should be classified under Heading No. 84.17 or alternatively under Heading No. 84.59(2).
- They contended that the machine treats metal (the blade) by coating it, which should fall under Heading No. 84.59(2).
- They relied on the Tribunal's decisions in Collector of Customs, Bombay v. Dura Foam Industries (P) Ltd. and Coates of India Ltd. v. C.C., suggesting that Heading No. 84.59(2) was more specific and should be considered before Heading No. 84.59(1).

Arguments by the Respondents:
- The respondents maintained that the machine was correctly classified under Heading No. 84.59(1) as miscellaneous machinery.
- They argued that the blade was not a metal for the purposes of Heading No. 84.59(2) and that coating did not constitute treatment of metal.

Tribunal's Analysis:
- The Tribunal examined the descriptions under Heading Nos. 84.17, 84.59(1), and 84.59(2).
- Heading No. 84.17 was found inapplicable as it primarily concerns machines for treating materials by processes involving changes in temperature, which was not the primary function of the Razor Blade Coater.
- Heading No. 84.59 is a residual entry covering machines not specified elsewhere in Chapter 84. Sub-heading 84.59(2) specifically includes machinery for treating metals.
- The Tribunal noted that the machine in question performs a process akin to polishing and plating, which are treatments of metal.
- It was concluded that the blade is a metal good, and the machine improves its quality through a treatment process, thus fitting under Heading No. 84.59(2).

Conclusion on Classification:
- The Tribunal held that the machine was correctly classifiable under Heading No. 84.59(2) of the Tariff.

2. Applicability of Exemption Notification No. 118/80-Cus:
The appellants also sought the benefit of exemption under Notification No. 118/80-Cus., which provides concessional rates for goods used in the electronic industry.

Tribunal's Analysis:
- The exemption is applicable to goods used in the electronic industry.
- The Tribunal defined electronics and noted that the razor blade manufacturing industry does not fall under the electronic industry.
- The appellants were not registered as an electronic industry, and thus, the benefit of the exemption was not applicable.

Conclusion on Exemption:
- The Tribunal held that the benefit of exemption Notification No. 118/80-Cus. was not available to the appellants.

Final Judgment:
The appeal was partly allowed. The Razor Blade Coater machine was classified under Heading No. 84.59(2) of the Tariff, but the benefit of exemption Notification No. 118/80-Cus. was denied.

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