2011 (6) TMI 573 - CGOVT - Customs

Exported goods classified as 'Leggings' instead of 'Girls Trousers' under DBK schedule 640699 rejected

The Revision Application challenging the classification of exported goods as 'Leggings' under DBK schedule 640699 instead of 'Girls Trousers' under ... Classification of goods under Drawback schedule - Harmonized System Nomenclature interpretation - reliance on physical examination over shipping bill description - drawback classification based on actual article and form - fibre content threshold for determination of cotton contentClassification of goods under Drawback schedule - Harmonized System Nomenclature interpretation - reliance on physical examination over shipping bill description - Whether the exported garments described in the shipping bills as 'Girls Trousers' (96% cotton, 4% elastane) were correctly classified by the Commissioner (Appeals) under DBK S.S. No. 611507 instead of DBK schedule 6104 01 01 or 640699. - HELD THAT: - The Government examined the physical samples and the records and noted that the controversy arose because the exported items did not conform to the declared nomenclature. The Original Authority classified the goods as 'Leggings' under DBK 640699 after physical examination, while the Commissioner (Appeals) after detailed reconsideration and inspection of a representative sample reclassified the goods under DBK 611507 as tight fitting, stretchy single piece knitted garments akin to tights/leggings. The Revision Application relied on declared description and on fibre content arguments (claiming 96% cotton) and on distinctions between tariff headings for trousers and hosiery; however the Government accepted the Commissioner (Appeals)'s application of the Harmonized System explanatory notes and tariff interpretation, and gave primacy to the article's actual form and physical characteristics over the shipping bill description. The Government found the appellate reasoning in paragraphs 4.5-4.12 of the impugned order to be reasoned and proper and saw no ground to interfere. [Paras 8, 9, 10]The classification under DBK S.S. No. 611507 by the Commissioner (Appeals) is upheld and the Revision Application is rejected.Final Conclusion: The Central Government rejected the Revision Application and upheld the Order in Appeal: the exported garments were correctly classified by the Commissioner (Appeals) under DBK S.S. No. 611507 and there is no interference with that classification. Issues:Classification of exported goods under DBK schedule, Distinction between different tariff schedules, Content of exported goods for classification.Classification of exported goods under DBK schedule:The Revision Application was filed against the Order-in-Appeal, challenging the classification of exported goods as 'Leggings' under DBK schedule 640699 instead of 'Girls Trousers' under schedule 6104. The applicant argued that the goods were specific to a particular sex and should be classified as unisex under Chapter 6115. They contended that the garments exported were 'trousers' made of 96% Cotton and 4% Elasthane, falling under the category of goods made out of 'Cotton' according to the recent Drawback Schedule. The applicant sought to set aside the Order-in-Appeal and have their goods classified under DBK schedule 6104 01 01.Distinction between different tariff schedules:The applicant further argued that there is a clear distinction between tariff schedules 6103, 6104, and 6115. They emphasized that the goods exported were Girls' Trousers, which should be classified under 6104. The Commissioner (Appeals) acknowledged this view based on the observation of the samples provided. The applicant contended that even though the garments were tight-fitting trousers, they should still be classified as 'trousers' under 6104 and not under 6115. The applicant provided detailed references from the Harmonized System of Nomenclature (HSN) to support their argument.Content of exported goods for classification:The applicant highlighted that the exported goods were made of 96% Cotton and 4% Elasthane, meeting the criteria for classification under DBK schedule 6104 01 01 as goods made of 'Cotton.' They referenced a circular clarifying the classification of items based on fiber content, stating that goods with 85% or more Cotton should be classified as such. The applicant argued that the Order-in-Appeal classifying their goods under 611507 was incorrect. Despite the arguments presented by the applicant, the Government upheld the Order-in-Appeal, stating that the goods were rightly classified under DBK S.S. T. No. 611507, as determined by the Commissioner (Appeals).In conclusion, the Revision Application was rejected for lacking merit, and the Government upheld the Order-in-Appeal as legally sound and appropriate based on the detailed examination and reasoning provided by the Commissioner (Appeals).