1991 (2) TMI 276 - AT - Customs

Tribunal rejects reference request on imported goods classification

MANILAL COMMODITIES PVT. LTD. Versus COLLECTOR OF CUSTOMS

The Tribunal rejected the reference request to the High Court under Sec. 130(1) of the Customs Act regarding the classification of imported goods as 'Soap ... Imoprt Issues:The judgment involves seeking reference to the High Court under Sec. 130(1) of the Customs Act regarding the classification of imported goods as 'Soap Raw Material' or 'Palm Fatty Acid' based on predominant content and relevant policy provisions.Issue 1: Classification of Imported GoodsThe applicants imported an item labeled as 'Soap Raw Material' under OGL for industrial use, contested by the department as 'Palm Fatty Acid' under Serial No. 368 of Policy AM 1981. The Chief Chemist's test indicated 63.5% to 67.4% Palm Fatty Acid content. The adjudicating authority held it not importable under OGL, leading to confiscation under Sec. 111(d) of the Customs Act. The Tribunal upheld this decision, considering the predominant Palm Fatty Acid content as justifiable.Issue 2: Questions of Law RaisedThe applicants sought reference to the High Court on questions of law:(i) Validity of using 'predominant content' test for classification.(ii) Relevance of PORAM technical literature for 'Soap Raw Material' classification.(iii) Justification for not classifying based on free fatty acid content.(iv) Correctness of classifying as 'Palm Fatty Acid' under AM 81 Policy Book despite differing customs tariff headings.Issue 3: Legal ArgumentsThe applicants argued that the Tribunal erred in applying predominant content as the sole criterion for classification, as not prescribed in the Policy. They referenced relevant case law and technical specifications to support their position, emphasizing the distinction between 'Soap Raw Material' and Palm Fatty Acid.Issue 4: Tribunal's DecisionThe Tribunal rejected the reference request, stating that the factual analysis of predominant content aligning with Palm Fatty Acid justified the classification. It emphasized that the main characteristic of the imported item was as raw material for soap manufacture, supporting the use of predominant content as a valid classification test.ConclusionThe Tribunal found no legal merit in the reference request, as the classification based on predominant content was deemed appropriate and factual challenges did not constitute legal issues warranting High Court intervention. The request for reference was rejected based on the established classification criteria and factual analysis.