2019 (1) TMI 919 - AT - Customs

Tribunal classifies imported hook and eye fastening strips under CTH 8308 10 10, overturning Customs decision

AJAY KUMAR Versus C.C. -NEW DELHI

The Tribunal classified the imported 'hook and eye fastening strips' under Customs Tariff Heading (CTH) 8308 10 10, agreeing with the appellant's argument ... Classification of imported goods - hook and eye fastening strip Nylon 60 - goods containing essential character of brassieres or not - whether classified under CTH 8308 10 10 or under Tariff Heading 6212 90 90 - adoption of HSN - Held that:- The samples of the imported goods consists of a set of hook and eye incorporated into a textile backing. One strip has three parallel rows with the brackets and other strips have a row with two hooks. Some samples were having only one hook and three eyes on the two different strips. If the eye and hook which is made of base metal with some part containing that of textile, plastic etc., would be classifiable under that heading, if it retains the character of hook and eye. The eye and hook retain their character even after being placed on the cloth plastic leather strip. The bra cannot be functional without hook and eye loop. It is manifestly clear that main function of the hook and eye is to fasten the bra and the strips are only used for holding them - This classification is also based on HSN description, accordingly, we find that the classification of hook and eye more appropriately covered by 83 081010 by adopting the international classification also. The ld. Tribunal in the case of Gosai Trading Company [2007 (5) TMI 33 - CESTAT, KOLKATA] had not an occasion to examine the issue above the classification of the impugned good in detail considering the Section, Chapter and Heading entries vis-a-vis HSN Explanation and other Tariff clarification internationally decided. In view of that, we treat the ratio laid down in the Gosai Trading case as per incuriam and respectfully disagree with the same. The classification of the hook and eye fastening strips, imported by the appellant will be rightly covered under heading 8308 10 10 - appeal allowed - decided in favor of appellant. Issues Involved:1. Classification of 'hook and eye fastening strips' under the correct Customs Tariff Heading (CTH).2. Interpretation of the Harmonized System of Nomenclature (HSN) Explanatory Notes.3. Applicability of previous judgments and principles of sub silentio and per incuriam.Detailed Analysis:1. Classification of 'hook and eye fastening strips' under the correct Customs Tariff Heading (CTH):The primary issue in this case is the classification of the imported goods, 'hook and eye fastening strips,' under the appropriate Customs Tariff Heading. The appellant classified the goods under CTH 8308 10 10, which pertains to 'hooks, eyes, and eyelets.' However, the Customs authorities reclassified the goods under CTH 6212 90 90, arguing that the goods are parts of brassieres and should be classified accordingly.The appellant argued that the imported goods do not have the essential character of brassieres and thus should not be classified under CTH 6212 90 90. They contended that the goods are merely strips of nylon material with hooks and eyelets stitched on them and do not possess the essential characteristics of finished articles like brassieres.2. Interpretation of the Harmonized System of Nomenclature (HSN) Explanatory Notes:The appellant emphasized the HSN Explanatory Notes to support their classification under CTH 8308 10 10. According to the HSN Explanatory Notes, products that retain the essential character of articles of base metal, even if they contain parts of textiles, plastics, etc., should be classified under the heading for base metal articles. The appellant argued that the hook and eye fastening strips retain the essential character of hooks and eyes and should therefore be classified under CTH 8308 10 10.The Tribunal noted that the HSN Explanatory Notes are a reliable guide for resolving classification disputes and are internationally accepted. The Tribunal agreed with the appellant's interpretation that the hook and eye fastening strips retain the essential character of hooks and eyes and should be classified under CTH 8308 10 10.3. Applicability of previous judgments and principles of sub silentio and per incuriam:The Customs authorities relied on the previous judgment in the case of M/s Gosai Trading Company vs. Commissioner of Customs, Kolkata, where the Tribunal classified similar goods under CTH 6212 90 90. The appellant argued that the Gosai Trading Company case did not consider the HSN Explanatory Notes or the General Rules for the Interpretation of the Tariff, and therefore, the judgment should not be binding.The Tribunal examined the principles of sub silentio and per incuriam, which state that a decision made without considering relevant statutory provisions or binding authority is not authoritative. The Tribunal found that the Gosai Trading Company judgment did not thoroughly examine the HSN Explanatory Notes and thus should not be considered binding. The Tribunal held that the previous judgment was made per incuriam and should not be followed in this case.Conclusion:The Tribunal concluded that the hook and eye fastening strips imported by the appellant should be classified under CTH 8308 10 10, as they retain the essential character of hooks and eyes. The Tribunal set aside the impugned order and allowed the appeal with consequential relief.Operative part of the order pronounced in open court.