2009 (12) TMI 535 - AT - Customs

Imported granules for heat shrinkable sleeves classified under Chapter 85.47, Tribunal rules

The Tribunal ruled in favor of the appellant, holding that the imported granules for manufacturing outer layers of heat shrinkable sleeves should be ... Imported consignments of granules - declared them as raw materials for manufacturing of outer layer of heat shrinkable sleeve (component for telecom cable jointing kits) - Appellant sought to classify this product under Chapter Heading 8547. The adjudicating authority rejected the said claim of classification and classified the same under heading 3901.90, after samples of the said goods were drawn and sent to Dy. Chief Chemist who opined that the samples as “black coloured granules composed of pigmented polyethylene” – Held that: - outer layer heat shrinkable sleeve in granule form will fall under chapter heading 8547 of the Customs Tariff Act - order dated 24-10-2007 - issue is now squarely covered in favour of the appellant Issues:Classification of imported product under Chapter Heading 8547 or 3901.90.Analysis:1. The appellant imported consignments of granules for manufacturing outer layers of heat shrinkable sleeves and sought classification under Chapter Heading 8547. The adjudicating authority classified the product under heading 3901.90 based on the opinion of the Dy. Chief Chemist. The ld. Commissioner (Appeals) upheld this classification, leading to the current appeal.2. The appellant argued that identical products imported by a group company were classified under Chapter Heading 8547 based on a High Court judgment. The Revenue contended that granules in primary form should be classified under Chapter 39, citing a different High Court case involving plastic sheets. The essential issue was whether the granules had the capacity to shrink on heat application, as observed by the Hon'ble Tribunal in a previous order.3. The ld. Commissioner (Appeals) referenced a High Court judgment and noted that the granules imported by the appellant did not demonstrate the same shrinkage property as sheets. The literature provided by the appellant did not clarify this aspect. The Commissioner concluded that the imported goods, polymers of ethylene, fell under Chapter 3901.90, and rejected the appeal.4. The Tribunal disagreed with the Commissioner's findings, highlighting a High Court judgment where granules for heat shrinkable sleeves were classified under Chapter Heading 8547. The Tribunal held that the issue was settled in favor of the appellant based on the High Court decision, and set aside the classification under Chapter 3901.90.5. Following the High Court precedent, the Tribunal ruled that the appellant's imported goods should be classified under Chapter Heading 85.47. The impugned order was set aside, and the appeal was allowed in favor of the appellant.