AI Drafter 
TaxTMI 
TaxTMI 
2024 (3) TMI 366
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.... the manufacture of toothpaste. In addition to the above imported goods, the appellants also imported plastic pellets (containers) required for preventing damage to the imported goods during transit. These pellets are discarded at the port of import before transportation of the imported goods to the appellants' factory in the State of Karnataka. During the disputed period viz., February, 2018 to September, 2019, the appellants had classified the imported goods under Customs Tariff Item (CTI) 3207 4000 of the First Schedule to the Customs Tariff Act, 1975, in view of the classification adopted in the domestic, international markets and paid the applicable duty at the time of import. In the post-clearance audit of the import transactions, the department had objected to the classification adopted by the appellants under CTI 3207 and proposed classification under CTH 2853, on the basis of earlier classification adopted by appellants in the past, by issue of consultative letter dated 14.10.2019. The appellants filed their detailed reply by its letter dated 11.11.2019 providing the relevant documents and explanation thereof. Subsequently, the Department had fixed the pre-notice consultat....
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....dual entry of 'other' of chemical products and preparations of the chemical or allied industries, not elsewhere specified or included. Accordingly, they claimed that classification of impugned goods under CTH 3207 which specifically covers glass frit is appropriate, as it is settled law that specific entry must be given preference over a general entry, by placing reliance on the judgement of the Hon'ble Apex Court in the case of Dunlop India Limited Vs. Union of India - 1976 (20) SCC 24. 3.2 Learned Advocate also submitted that in terms of CBEC Circular No.3/2012-Customs dated 01.02.2012, it has been clarified that the sub- heading 3207 specifically covers glass frit and other glass, in the form of powder, granules or flakes. Further, he also relied upon the decision of this Tribunal in the case of Collector of Customs & Central Excise, Rajkot Vs. Parshuram Pottery - 2000 (118) E.L.T. 231 (Tribunal) wherein he stated that it has been held by the Tribunal that the classification of glass frit is under CTH 3207. It is also stated by him that packing material containing the imported goods is not to be classified separately unless it gives the imported goods an essential character o....
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....o be classified separately; and whether the imported goods along with packing material is liable to be confiscated for alleged violations of the Customs Act, 1962. 6.2 In order to address the above issue of classification of imported goods, we would like to refer the relevant legal provisions contained in Section 12 of the Customs Act, 1962; the Customs Tariff Act, 1975 and rules framed thereunder for consideration of proper and appropriate classification of the subject goods under dispute. "Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government." "Section 1. Short title, extent and commencement. - (1) This Act may be called the Customs Tariff Act, 1975. (2) It extends to the whole of India. ....
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....ained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gu....
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....he value as is indicated in that column. 3. In any entry, if no rate of duty is shown in column (5), the rate shown under column (4) shall be applicable. ADDITIONAL NOTES In this Schedule,- (1) (a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all subheadings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) "tariff item" means a description of goods in the list of tariff provisions accompanying eight digit number and the rate of customs duty; (2) the list of tariff provisions is divided into Sections, Chapters and Sub-Chapters; (3) in column (3), the standard unit of quantity is specified for each tariff item to facilitate the collection, comparison and analysis of trade statistics." 6.3 From plain reading of the above legal provisions, it transpires th....
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....ich the impugned goods are covered as per the Customs Tariff and then classifying the impugned product under the corresponding Sub-heading, Tariff Item. Now, we may closely examine the scope of the contending classification for determining correct classification of the imported goods. The relevant tariff entries in the First Schedule to the Customs Tariff Act of contending Chapter headings 3207 and 3824 are extracted as below: Tariff Item Description of goods Unit Rate of Duty Standard Preferential Areas (1) (2) (3) (4) (5) 3207 PREPARED PIGMENTS, PREPARED OPACIFIERS AND PREPARED COLOURS, VITRIFIABLE ENAMELS AND GLAZES, ENGOBES (SLIPS), LIQUID LUSTRES AND SIMILAR PREPARATIONS, OF A KIND USED IN THE CERAMIC, ENAMELLING OR GLASS INDUSTRY; GLASS FRIT AND OTHER GLASS, IN THE FORM OF POWDER, GRANULES OR FLAKES 3207 10 -Prepared pigments, prepared opacifiers, prepared colours and similar preparations : 3207 10 10 ---Prepared organic dye-stuff pigments, dry Kg. 10% - 3207 10 20 ---Pr....
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.... xx xx xx xx - Mixtures containing halogenated derivatives of methane, ethane or propane: 3824 71 00 --Containing chlorofluorocarbons (CFCs), whether or not containing hydrochlorofluoro-carbons (HCFCs), perfluorocarbons (PFCs) or hydrofluorocarbons(HFCs) Kg. 10% - xx xx xx xx xx xx xx xx - Goods specified in Sub-heading Note 3 to this Chapter: 3824 81 00 -- Containing oxirane (ethylene oxide) Kg. 10% - xx xx xx xx xx xx xx xx 3824 9....
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....e considered view that for legal purposes, as per GIR-1, the classification of impugned goods under CTI 3207 4000 is appropriate. 9.1 On the other hand, the Revenue's contention is that in terms of GIR-4, the impugned goods shall be classifiable under CTI 3824 9990 as the description of the goods under this heading is most akin, and that these goods are not used in the ceramic or glass industry, in order to merit classification under CTI 3207 4000. From the careful reading of the GIRs, it could be seen that these are required to be followed sequentially; in other words, when the classification of goods is not possible to be arrived under the first rule GIR-1 then one need to proceed further, one by one. Further, for for invoking GIR-4, the preceding condition that "Goods which cannot be classified in accordance with the above rules..." i.e., GIR 1 to GIR 3, is to be applied. As it could be seen that in the present case, when the classification of goods can be arrived at by following GIR-1, then there is no case for invoking GIR-4 arbitrarily. Further, the learned Commissioner of Customs (Appeals) in the impugned order had taken a view that the impugned goods are not used i....
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....pecifically covers 'glass frit and other glass, in the form of powder, granules or flakes'. In the HSN explanatory notes to 3207 it has also been provided that Glass frit and all other varieties of glass (including vitrite and glass obtained from fused quartz or other fused silica) in the form of powder, granules or flakes, whether or not coloured or silvered is classifiable under sub-heading 3207. Therefore, on application of General Rules for the Interpretation (GIR) of the First Schedule to Customs Tariff GIR-1 and GIR-6, read with Chapter Note 3 to Chapter 28, 'Fused Silica' is correctly classifiable under tariff item 32074000." 10. We also find that the learned Advocate for the appellants had advanced an argument by stating that pre-consultation notice opportunity has not been given to the appellants. In this regard, we find that pre-notice consultation procedure has been prescribed in terms of the proviso to clause (a) of sub-section (1) of Section 28 ibid, read with the Pre-Notice Consultation Regulations, 2018 to provide for an effective mechanism of consultation in respect of cases not involving collusion, wilful mis-statement, suppression etc., before i....
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....nd packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provisions does not apply when such packing materials or packing containers are clearly suitable for repetitive use." 11.2 From plain reading of the above GIR-5, it is clear that certain specified type of containers which provide a specific package in terms of shape or suitability to fit the article, for long term use and is normally presented with such article, is to be classified along with such article. However, when such containers are presented separately, by giving the whole its essential character, as durable special container for packing of specific type of goods, then these could be categorized for classification separately as provided in GIR-5(a). Further, packing materials and packing containers presented along with the goods, which they contain as its contents, shall be classified along with such goods and these are not required to be classified separately in terms of GIR-5(b). In the present case, the imported goods have been presented along with the 'plastic pallets' as packing containers, an....