TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1215
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..../Es) filed during the period 15.04.2021 to 19.11.2021 and self-assessed the same with applicable Basic Customs Duty (BCD) of 7.5% ad valorem and additional duty of Customs (CVD) at applicable rates in terms of Section 17(1) of the Customs Act, 1962. The officers of the Customs Audit wing during the premises-based audit of assessment of imported goods, had objected to the classification of the imported goods and had raised a query seeking reply from the appellants as to why the imported goods should not be classified under CTI 9616 1020 with applicable Basic Customs Duty (BCD) of 20% ad valorem. After detailed analysis of the reply submitted to the audit objections and being not satisfied with such reply, the department had issued Show Cause Notice (SCN) dated 22.07.2022, for revising the classification of imported goods and by demanding differential duty along with interest and for imposition of penalty on the appellants. In adjudication of the said SCN, the original authority had come to the conclusion that the imported goods are used for medicaments which work on the principle of spray forming mechanism and that the goods are part of a bottle that is to hold the liquid form of me....
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....and, learned Advocate had relied upon following decisions of the Tribunal in the respective cases mentioned below: (i) Commissioner of Customs, Bombay Vs. CIPLA Ltd. - 1998 (102) E.L.T. 739 (Tribunal) (ii) Perfect Aerosol Valves Pvt. Ltd. Vs. Commissioner of Customs, (NS-V), Nhava Sheva in the Final Order No. A/85500/2024 dated 22.04.2024 of Tribunal, Regional Bench, Mumbai. 4.1 Learned Authorised Representative (AR) reiterated the findings made by the Commissioner of Customs in the impugned order and submitted that issue of classification of impugned goods, has been examined in detail by the learned Commissioner of Customs. He stated that the appellants have described the imported goods as 'crimp pump' but claimed the classification under CTH 8413 50 which is meant for positive displacement pumps such as dosage pumps. From the sample photograph of the product, he submitted that the goods have both features of spray and pumps; pumps alone do not form aerosols on their own. He further stated that since the impugned goods by their way of functioning and other mechanism are very akin to the 'similar toilet spray', and these are rightly classifiable under CTI 9616 1020. 4.2 Learn....
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....under the Customs Act, 1962 (52 of 1962), are specified in the First and Second Schedules. xxx xxx xxx xxx THE FIRST SCHEDULE - IMPORT TARIFF (Refer Section 2) THE GENERAL RULES FOR THE INTERPRETATION OF IMPORT TARIFF Classification of goods in this Schedule shall be governed by the following principles: 1. The titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a ref....
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....and 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 provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use. 6. For legal purposes, the classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub headings and any related sub headings Notes and, mutatis mutandis, to the above rules, on the understanding that only sub headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires. THE GENERAL EXPLANATORY NOTES TO IMPORT TARIFF 1. Where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by "-", the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, however, the description of an article or group of articles is preceded by "- -", the said article or group of articles shall be taken to be a sub-classification....
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....nternationally traded goods, i.e., 'Harmonized Commodity Description and Coding System' (HS). Accordingly, goods are to be classified taking into consideration the scope of headings / sub-headings, related Section Notes, Chapter Notes and the General Rules for the Interpretation (GIR) of the First Schedule to the Customs Tariff Act, 1975. Rule 1 of the GIR provides that the classification of goods shall be determined according to the terms of the headings of the tariff and any relative Section notes or Chapter notes and thus, gives precedence to this while classifying a product. Rules 2 to 6 provide the general guidelines for classification of goods under the appropriate sub-heading. In the event of the goods cannot be classified solely on the basis of GIR 1, and if the headings and legal notes do not otherwise require, the remaining Rules 2 to 6 may then be applied in sequential order. Further, while classifying goods, the foremost consideration is the 'statutory definition', if any, provided in the Customs Tariff Act. In the absence of any statutory definition, or any guideline provided by HS explanatory notes, the trade parlance theory is to be adopted for ascertaining a....
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....Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548. 3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines de....
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....under CTI 9616 1010; (ii) the second one i.e., "mounts and heads for scent sprays and similar toilet sprays" covered under CTI 9616 1020; and (iii) the third one i.e., "powder-puffs and pads for the application of cosmetics or toilet preparations" covered under CTI 9616 20 00. 8.3 Broadly, we find that the chapter heading 8413 deals with "various types of pumps and other similar mechanical appliances for liquids, along with their respective parts". Whereas, Chapter heading 9616 deals with products of "Scent sprays and similar toiler preparations along with mounts, heads, powder-puffs and pads" as a part of miscellaneous manufactured articles. The scope of coverage of Chapter 8413 is large enough to cover all types of pumps and other similar appliances, irrespective of its application in dispersal of medicament liquid or other use; Whereas the scope of coverage of goods under chapter heading 9616 is restrictive to scent sprays, toilet sprays which are of cosmetics in nature and those items such as mounts, heads, powder-puffs and pads which are essential for its application have alone been included with such items. 8.4 The learned Commissioner of Customs had come to the conclus....
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....fore learned adjudicating authority had held that classification under this heading is more specific, and appropriate over the contending heading as claimed by the appellants under 8413 5010/ 8413 5090, which is appropriate for mechanical devices. 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 invoking GIR-2(a), the preceding rules i.e., GIR 1, is to be exhausted. As it could be seen that in the present case, when the classification of goods can be arrived at by following GIR-1, by detailed analysis of the specific customs tariff items under the respective headings, then there is no case for invoking GIR-2(a) arbitrarily. Further, the learned Commissioner in the impugned order had not examined and discussed the terms of headings and the scope of contending tariff entries, read with relevant section or chapter notes, before going ahead for adoption of GIR 2(a). Thus, it is not feasible to determine appropriate classification by application of GIR-2(a) alone, by ....
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....w : 9.2 In careful reading of the above HSN explanatory notes, it is understood that heading 8413 covers under its scope inter alia, most of the machines and appliances for pumping, dispensing, raising or otherwise delivering the liquid contained that needs to be displaced/dispersed from the container to the desired place, irrespective of whether they are operated by hand or any kind of power, reciprocating or rotary or centrifugal pumps, under five different categories as described therein covered under heading 8513 of HSN Explanatory Notes. 9.3 From the plain reading of above HSN explanatory notes to heading 9606, it is understood that this heading covers under its scope, all preparations of a kind used in cosmetics and more specifically scent sprays, toilet sprays. Thus, these are essentially required for applying cosmetics like spray formation of the liquid that is used as scent or other similar perfume etc. This does not cover all types of mounts and heads or pumps or other appliances, for dispersal or spray of liquids as the phrase 'therefor' appearing in HSN description of 9606.10 and in the entries at CTH 9616 10 at the six digit level of the First Schedule to the Customs....