Commissioner of Customs (Import) Vs Welkin Foods (Supreme Court of India)
Customs Classification of Mushroom Shelving: Aluminium Structures vs Parts of Agricultural Machinery
The Supreme Court examined whether aluminium shelving imported for mushroom cultivation should be classified as “aluminium structures” under CTI 76109010 or as “parts of agricultural machinery” under CTI 84369900. The Court undertook an exhaustive analysis of the Customs Act, 1962, the Customs Tariff Act, 1975, the General Rules for Interpretation (GRI), and the HSN Explanatory Notes, emphasising that classification must begin with GRI 1, giving primacy to the tariff headings, section notes, and chapter notes.
The Court reiterated that classification is determined at the time of import, based on the nature, character, and description of the goods as presented, and not merely on their end use. While acknowledging that end use and the common/trade parlance test may be relevant in appropriate cases, the Court clarified that such tests cannot override clear statutory headings or convert structural components into machines or machine parts when they lack the essential characteristics of machinery.
Applying these principles, the Court held that the aluminium shelves, though designed for mushroom cultivation and integrated later with other equipment, were structural in nature, lacked mechanical or moving components, and functioned primarily as a fixed supporting framework. They therefore did not qualify as machines or parts of agricultural machinery under Chapter 84. The Court set aside the CESTAT’s reasoning based on specificity, end use, and trade parlance, and concluded that the goods were correctly classifiable as aluminium structures under CTI 76109010, attracting the applicable customs duties.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
