TaxTMI 
TaxTMI 
2012 (10) TMI 422
X X X X Extracts X X X X
X X X X Extracts X X X X
....awback scheme. The classification of goods, for the purpose of claiming duty drawback, appeared not to be in consonance with the drawback schedule as the appellants had declared the aforesaid export goods to be Handicrafts/Artware of the constituent materials and accordingly claimed drawback separately on the constituent materials treating the goods as composite articles. Since the goods exported by the appellants fall in the category of goods finding specific entry under the drawback schedule, therefore, apparently there was no ground to consider the goods as composite goods as provided for under the Drawback Schedule and claim the drawback on the basis of constituent material. Moreover, when there is a specific entry for a product, the goods are required to be classified on the basis of the material providing the essential character to the goods and in such type of cases, the option to claim drawback separately on the constituent material is not available. However, appellants sought to claim drawback on each constituent, used in the process of manufacturing and for this purpose FOB and weight of each input was shown separately on the invoice. 2.1 The adjudicating authority ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore the jurisdictional Commissioner of Customs (Appeals) who after due consideration of submissions as made therein rejected the same thereby upholding the above order-in-original. 3. In this Revision Application, the applicants have made the following main grounds of submissions :- 3.1 The Department representatives presented misleading information which was wholly incorrect. The correct position is furnished here under for the kind perusal of the Hon'ble government for favour of delivering a just and judicious decision and to help the genuine export trade house and to restore the proper amount of drawback for which the applicant is eligible. 3.2 The issue pertains to categorization of the goods exported by the applicant. The department has referred to note (14) of the general notes to drawback rates read with M.F. & C.A., (D.R.) Circular No. 9/2003-Cus., dated 17-2-2003 which is reproduced for ready reference. In the case of applicant most of the goods exported are considered the items of handicraft in the common parlance and the buyers places orders keeping in view the same aspect, we therefore quote the said items as handicrafts. The technical authority func....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the two orders in original appealed against by the applicant. But unfortunately the jurisdictional Assistant Commissioners classified all the items made of Brass, iron, aluminum, glass under Chapter heading 940599 thus slashing down hugely and causing enormous loss to the applicant and to the business of export to a very large extent which has a very adverse telling effect on the export of handicrafts particularly in the times of world wide recession. 3.4 The jurisdictional adjudicating Assistant Commissioner has held the opinion that classification of goods as handicrafts on the basis of certificates issued by the EPCH cannot be considered as handicrafts though the board has issued specific directions in the matter of handicrafts made of brass/iron. This clarification was issued while taking note of the decision of the Hon'ble Supreme Court in the case of M/s. Louis Shoppe and others a manufacturer of Wood furniture. But the Assistant Commissioner has denied accepting such certificates on the wrong pleas. 3.5 We have correctly classified planters, decorative planters, decorative crane, decorative turtle, lizard, wreath hanger made of aluminum under 761601, iron 73602....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... handicrafts from CFS Star track and CFS Albatros in two different chapters on the same date in the month of Feb., 2009. The factual position in the matter was that when we had furnished an invoice before Assistant Commissioner Star Trek, Dadri classifying the goods as builders hardwares and the identical goods to the same overseas buyer as handicraft before the Assistant Commissioner ICD Albatros. In this connection we wish to place before the Hon'ble Government that this issue pertains to our invoice no. DC/EXP/099844 dated 31-1-2009 through which the following goods were exported; Parts of domestic decorative articles used as tableware and kitchenware other handicraft of iron & Aluminum classified under Chapter 44219060, 732602, 761601 but the Assistant Commissioner Start Trek of his own classified all the above said goods under Chapter heading no. 83021090. Under the force of his threat of authority we did not resist and had no option but to accept the thrusted opinion. The adjudication authority against the fact placed before the Hon'ble Commissioner that the applicant had classified the goods as builder hardwares. On the contrary the items said to be identical and presented b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... revealed that board has issued the above circular on the basis of above judgment of Hon'ble Supreme Court, but later on, Board vide its Circular No. 56/99, dated 26-8-1999 has clarified that to accept the certificates issued by the EPCH for handicrafts by way of endorsement on the body of the shipping bills that the goods covered by such shipping bills are handicrafts. (ii) The above circular has been issued by the Government of India, Ministry of Finance, Department of Revenue, New Delhi. The instruction issued by the Board/Ministry are bindings on the officer of the Deptt. The Hon'ble Supreme Court in the case of C.C.E., Vadodara v. Dhiren Chemicals Industries reported in 2002 (143) E.L.T. 19 (S.C.) has held that C.B.E.C. circulars are binding on revenue even if placing different interpretation than given by Supreme Court. (iii) The applicant pleaded before the Adjudicating authority as well as before the Commissioner (Appeal) Noida that the certificates granted by the competent authority in term of the Board's Circular No. 56/99 has a binding effect over the lower field formations. In this connection the applicant relied upon the deci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he products in the case of Hindustan Ferodo Ltd. v. Collector, 1997 (89) E.L.T. 16 (S.C.). (ii) In the case of M/s. Voltas Ltd. v. Commissioner of Customs, Mumbai - 2005 (182) E.L.T. 117 (Tri.-Mum.), the Hon'ble CESTAT, West Zonal Bench, Mumbai held that where exemption is granted based on certified opinion of expert the adjudicating authority cannot question its correctness by his personal opinion vide para 8. (iii) In the case of Sunint Auto Pvt. Ltd. v. Commissioner of Customs, Delhi, 2005 (183) E.L.T. 209 (Tri.-Del) the Hon'ble CESTAT, Northern Bench New Delhi held that personal opinion of Commissioner (Appeals) cannot be relied over expert opinion vide para 4. (iv) In the case of Ramayan Impex v. Commissioner of Customs (Exports), Nhava Sheva - 2005 (189) E.L.T. 446 (Tri.-Mumbai), the Hon'ble CESTAT, West Zonal Bench, Mumbai held that personal assessment by adjudicating authority is not acceptable vide sub para (e) of para 3. (v) From the aforementioned judgments, it can be inferred that when it comes to the question of classification of goods there is no room for personal opinion of the departmental officer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fter discussions with the certificate issuing authority. The exports should not, in the mean time, be held up. Para 5. Doubts have also been expressed relating to interpretation of note and condition (3) of the Drawback Schedule Notification No. 103/2008-Cus. (N.T.), dated 29-8-2008. The note and condition provides as follows :- "Notwithstanding anything contained in the said Schedule, all art ware or handicraft items shall be classified under the heading of art ware or handicraft (of constituent material) as mentioned in the relevant Chapters." The essence of this condition is that while the Drawback Schedule is aligned with the Customs Tariff at the 4 digit level, this alignment is not applicable to Art ware/Handicraft items. Art ware/Handicraft item made of a particular constituent material has to be classified under the heading of Art ware/Handicraft (of that constituent material) as mentioned in the Chapter relevant to that constituent material. It may be noted that according to this note, the art ware/handicraft items may fall in a heading/sub-heading in a chapter other than the chapter in which they fall according to Hamonized System of classification. To illustrate, a ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elied upon the below mentioned judgment for mandatorily observation of Board's instructions Circulars along with certificate of relieving statutory bodies :- (i) Hon'ble Supreme Court (i) 1997 (94) E.L.T. 460 (S.C.) (ii) 1996 (87) E.L.T. 19 (S.C.) (iii) 1996 (88) E.L.T. 638 (S.C.) and (iv) 1997 (89) E.L.T. 441 (S.C.). (ii) Hon'ble Supreme Court in the cases of C.C.E. v. Usha Martin Industries, 1997 (94) E.L.T. 460 (S.C.) = (1997) 7 SCC 47; (iii) Ranadey Micronutrients v. C.C.E. - 1996 (87) E.L.T. 19 (S.C.) = (1996) 10 SCC 387, (iv) C.C.E. v. Jayant Dalal (P) Ltd. - 1996 (88) E.L.T. 638 (S.C.) = (1997) 10 SCC 402, and (v) C.C.E. v. Kores (India) Ltd. - 1997 (89) E.L.T. 441 (S.C.) = (1997) 10 SCC 338. (B) :- Thereafter it was submitted that further for the sake of perusal of the Joint Secretary we enclose herewith the copies of the shipping bills and the invoices in respect of export of the same goods along with photographs thereof and a consolidated list of all such documents pertaining to the pre and post period of dispute from the various ICD's as an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....notes that the lower authorities have specifically relied upon and concluded their findings for the purpose of above disqualification from declared handicraft category basically on their below mentioned observations as given in their discussion & findings portions of impugned order :- (a) For finalizing the classification of goods as Handicrafts under Drawback Schedule, certificates issued by various organizations i.e. EPCH/Development Commission or Handicrafts/Metal Handicrafts service Centre (Ministry of Textiles, Government of India) etc. cannot be the sole basis. (b) Although the (Applicant) party failed to reply satisfactorily the department's query relating to individual processes of manufacturing of each of respective items and their general manufacturing processes i.e. (i) Designing. (ii) Pattern making by hand. (iii) Sheet cutting as per design. (iv) Pressing as per design. (v) Sound Casting/scrapping. (vi) Soldering/glass cutting and fitting. (vii) Chemical colouring etc. al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dgments for the correct and binding applicability of C.B.E.& C.'s Circular No. 3/2010-Cus., dated 12-2-2010 which is in continuation of earlier Board's Circulars No. 128/39/95-CX., dated 25-5-1995 No. 280/114/96-CX., dated 19-12-1996 (regarding applicability of above Apex Court decision in Louis Shoppe Case) and No. 56/99-Cus., dated 26-8-1999. Paras 4 & 5 of this circular stipulates as under :- "4. It is hereby clarified that the assessing authorities should normally accept the certificates issued by the Development Commissioner (Handicrafts)/EPCH. A decision to reject the certificate issued by the Development Commissioner (Handicrafts)/EPCH certifying the goods as artware/handicraft should be taken only with the approval of the Commissioner of Customs/Central Excise and after discussions with the certificate issuing authority. The export should not, in the mean time, be held up. 5. Doubts have also been expressed relating to interpretation of note and condition (3) of the Drawback Schedule notification No. 103/2008-Cus. (N.T.), dated 29-8-2008. The note and condition provides as follows : "Notwithstanding anything contained in the said Schedule, all artware or handic....