Classification of Natural Rubber Latex or other ballons

[MK Singh]

My query is related to the classification of Balloons used during the birthday celebration or any party functions. It is seen that NCTC vide its alert suggested classification in 9503 whereas some Advance Ruling authorities have classified this product under 9505. My query is:

(i) In the case of dispute between these two formations, which classifications is more suitable and have more legal backing?

(ii) What is the legal authority of NCTC while deciding classification? What are the legal provisions governing the classification decided by the NCTC?

Pl comments with specific rules and relevant laws.

[Shilpi Jain]

Classification has to be done as per the Customs tariff, its section notes, chapter notes and HSN explanatory notes.

Advance rulings are not having status of a supreme court rulings. AR are binding only on the person who has applied for it.

So classification whether NCTC or AR is correct will depend on analysis of the customs tariff.

[KASTURI SETHI]

Dear Querist,

A clarification dated 16.5.1994 issued by the Board is posted here.

An extract from Central Excise Tariff Act 1985,(1994-95 Budget Edition).

" Rubber balloons :- There are three competing entries for the classification of balloons under the Schedule to the Tariff. These entries are 4016.91, 8801.00 and 9503.00. Keeping in view of the end use of the products as toys, Explanatory Notes to HSN, trade usage etc, the Board is of the view that children's toy balloons are classifiable under Chapter Heading 95.03 of the Schedule to the Tariff ---- based on C.B.E. & C. Order No. 30/30/94-CX dated 16.5.1994"

For ready reference : You can search on Board's Website or in--1994(71)ELT (T 71)

[KASTURI SETHI]

"Adjudication - Classification of goods - Where two opinions are possible, assessee should be given benefit of doubt and the opinion favourable to it should be given effect to - Sections 11A(2) and 33 of Central Excise Act, 1944 - Rule 173B of Central Excise Rules, 1944. [para 15]"---------Supreme Court in the case of Poulose and Mathen Vs. CCE - 1997 (2) TMI 98 - SUPREME COURT, 

AI Summary

Classification of balloons: tariff and HSN notes govern; children's toy balloons treated as toys by board; doubt favors taxpayer. Classification of rubber balloons is governed by the Customs tariff, its section and chapter notes and the HSN explanatory notes; Advance Rulings are binding only on the applicant and do not replace tariff analysis. A Board clarification dated 16.5.1994 directs that children's toy balloons be classed under the toys heading based on end use and explanatory notes. Where two opinions on classification are possible, adjudicatory practice accords the benefit of the doubt to the assessee.