Handicrafts classification turns on hand-made character and substantial ornamentation, not just in-lay work or labour records.

Goods qualify as handicrafts when they are predominantly made by hand and display substantial ornamentation or artistic carving; the test is not confined to in-lay work. Photographs showing carved designs and substantial ornamentation supported classification as handicrafts, while the rejection of an expert certificate from a handicrafts organisation was found unjustified. Records of wages or labour accounting were not decisive in applying the handicrafts test. On that basis, the goods were treated as handicrafts and eligible for exemption under Notification No. 76/86 rather than being classified as furniture under Heading 9403.00 of the Central Excise Tariff.

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Issues: Whether the goods manufactured by the assessee were handicrafts eligible for exemption under Notification No. 76/86 dated 10-2-86, or furniture classifiable under Heading 9403.00 of the Central Excise Tariff.

Analysis: The applicable test for handicrafts required the goods to be predominantly made by hand and to possess visual appeal by way of ornamentation or similar artistic work of a substantial nature. On the evidence of photographs, the furniture showed carved designs and ornamentation of substantial character. The insistence that ornamentation must be only in-lay work was rejected as too narrow. The rejection of the expert certificate was also found unjustified, as it came from an organization dealing with handicrafts and supported the claim that the products were mainly hand carved. The extent of wage records or labour accounting was held not decisive for applying the handicrafts test.

Conclusion: The goods were held to be handicrafts and the assessee was entitled to exemption under Notification No. 76/86.

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