1988 (10) TMI 39 - SC - Customs

Supreme Court Remands Customs Classification Case for Lack of Trade Evidence

The Supreme Court set aside the Tribunal's order in a customs classification case involving an imported Colour Scanner Chromograph C-299. The Court ... Whether the classification of the goods by the appellant under Entry 84.35 could not be sustained if the catalogue submitted was ? Held that:- There is no evidence as to how these goods are dealt with in the trade or industry. There is no technical definition of the expressions used. In that view of the matter, in our opinion, the true approach of the Tribunal should have been to find out the correct meaning of the items, i.e., the meaning attributed to the expressions used by those dealing with it in the trade. The Tribunal should now find that out. In that view of the matter we allow the appeal, set aside the order of the Tribunal and remand the matter to the Tribunal with the direction to find out how these goods are dealt with by the people who deal in them after giving both sides due opportunity of adducing evidence and then decide the question ac cording to this Judgment. Issues:Classification of imported goods under the Customs Tariff Act - Proper tariff entry for the goods in question - Classification based on trade parlance - Lack of technical definition in the Act.Analysis:The case involved an appeal under Section 130E(b) of the Customs Act, 1962, concerning the classification of an imported Colour Scanner Chromograph C-299. The appellant imported the scanner under Appendix 2 of the Import Policy for the year 1981-82. The Assistant Collector assessed the scanner under Tariff heading 90.25(i) and levied customs duty. Subsequently, a Less Charge Demand was issued under Section 28 of the Customs Act, contending that the scanner should be assessed under a different heading attracting higher duty. The Tribunal found that the goods could not be classified under Entry 84.35, which refers to 'other printing machinery,' as the scanner's functionality did not align with being ancillary to printing. The Tribunal analyzed various tariff entries, ultimately considering Entry 90.10 as the appropriate classification for the scanner.The Tribunal's decision was based on the principle of classification on the basis of trade parlance. It noted that there was no specific technical definition provided in the Customs Tariff Act for the goods in question. The Tribunal emphasized the importance of understanding how the goods are dealt with in the trade or industry to determine their proper classification. It referred to relevant case law and principles, highlighting the need to interpret tariff items based on their popular meaning in commercial understanding.However, the Tribunal acknowledged the lack of evidence on how the goods were dealt with in the trade or industry in this case. As a result, the Tribunal's approach was deemed inadequate in determining the correct meaning of the tariff items. The Supreme Court allowed the appeal, set aside the Tribunal's order, and remanded the matter back to the Tribunal. The Tribunal was directed to investigate how the goods are dealt with by those in the trade, allowing both sides to present evidence before making a decision based on the findings.In conclusion, the Supreme Court emphasized the importance of determining the proper tariff entry for goods based on how they are understood and dealt with in the trade or industry. The case highlighted the significance of interpreting tariff items in accordance with their popular meaning in commercial understanding, especially in the absence of specific technical definitions in the statute. The remand to the Tribunal aimed to ensure a thorough examination of how the goods in question are handled by those in the trade before reaching a final classification decision.