TaxTMI 
TaxTMI 
2025 (7) TMI 1345
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.... a personal hearing, reclassified the goods under CTH 3904 1090; denied the benefit of Notification No. 46/2011-Cus dated 1.6.2011 and demanded the differential duty of Rs.2,66,676/- along with interest. The appellant preferred an appeal before the Commissioner (Appeals) who vide the impugned order upheld the reclassification and rejected the appeal. Hence the present appeal. 3. The learned Advocate Shri Hari Radhakrishnan appeared for the appellant and Smt. Anandalakshmi Ganeshram, Ld. Authorized Representative. 3.1 The Ld. Counsel for the appellant submitted that the test report dated 25.11.2014 given by CIPET was in favour of the appellant and it stated that the sample may be considered as 'Polyvinyl chloride (PVC) resin'. He stated that hence the said goods fall under the specific CTH 3904 2110 of the Customs Tariff. However since certain doubts were raised by revenue they had sought a clarification from CIPET, through the department, and who again vide their letter dated 25.02.2015 further reiterated their stand. In spite of both the reports being available with the Original Authority the impugned goods were reclassified under CTH 3904 1090 and the benefit contained unde....
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....r CTH 3904 1090 - Poly (vinyl Chloride), not mixed with any other substances: Other [revenue]. 5. Under the Customs Tariff Act, 1975, imported goods are classified based on tariff headings/ sub-headings, section and chapter notes, and the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 (GRI). Rule 1 of the GRI 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. If the goods cannot be classified solely on the basis of GRI 1, Rules 2 to 6 provide further classification guidance in sequential order. Rule 3(a) of GRI also provides that the heading which provides the more specific description shall be preferred to headings providing a more general description. Hence if the goods to be classified are covered by the description in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading applies. 5.1 Hence a commodity cannot be classified in a residuary entry, in the presence of a specific entry, even if such specific entry requires the product to be understood in the technical sense [s....
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...., as below; "Thus combined reading of manufacturer's product literature, clarification given by the manufacturer and the two reports given by CIPET, it is very clear that the PVC resin grade SP660 is a single thermoplastic material and it is not a compound since it is not mixed with any other substance like plasticizer or non-plasticizer and is rightly classifiable under sub-heading 390410 only. In view of the above discussion and findings, I pass the following order." 8. When the matter was taken up before the Ld. Commissioner Appeals, his earlier order dated 19.01.2015 in the case of M/s Lila Polymers (supra) pertaining to the import of 'PVC Resin Suspension Grade SP660' was brought to his notice, where in it was stated; The appellants have filed the self-assessed bills of entry classifying the goods under CTH 39042110. Whereas the department has changed the classification to CTH 39041090 in the reassessment. Sample was drawn from the consignment and sent to CIPET for test. The Test report has stated as follows: Based on the above test results and visual appearance, the submitted samples may be considered as Poly Vinyl Chloride (PVC) which is single ....
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....esins without being plasticized) would fall under only CTH 39042110. Whereas the entry against CTH 39041090 which is a triple dash heading reads as "other". The other triple dash heading above viz. 39041010 reads as "Binders for pigments". The parent single dash six- digit level heading viz. 3904 00 reads as "Poly (vinyl chloride), not mixed with any other substance". A combined reading of triple dash eight-digit level heading along with Its immediately preceding single dash six-digit level heading indicates that CTH 39041090 covers Poly (vinyl chloride), not mixed with any other substance, that are other than binders for pigments. The test report has stated that the PVC does not contain any other substance like plasticizers which means that the presence of any substances other than plasticizers along with PVC is not ruled out. Therefore, the classification at the 6-digit level itself i.e. CTH 3904 00 gets ruled level i.e. 39041090 in which the department has classified the impugned goods is found not relevant to the Impugned goods. Notwithstanding the above, on a comparison with eight digit and triple dash level between CTH 39041090 and CPH 39042110 shows that CT....
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.... (emphasis added) 8.1 However the Ld. Commissioner Appeals in the impugned order differentiated his earlier order dated 19.01.2015, in the following manner; The appellant has drawn reference to the Order No. C Cus. 3 & 4/2015 dated 19.1.2015 passed by this authority in the appeals filed by M/s. Lila Polymers P Limited holding that the goods viz. PVC resin Suspension Grade are to be classified under CTH 39042110. Such a decision was taken based on the test report which certified that the sample does not contain substance like plasticizer and that it did not state that the sample does not contain any other substance altogether. whereas in the present case, the Test Report and the clarification have stated that the sample may be considered as a prime material and that it may not be considered as compound since it is not mixed with any other substance. Thus the facts of the case are different." (emphasis added) He went on to render the following findings; "The appellants have imported PVC Resin. Sample was drawn from consignments covered by one of the bills of entry referred in the impugned order in original and sent to CIPET for testing. The Test repo....
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....ng single dash reads "other poly (Vinyl Chloride) which means that it covers PVC other than not mixed with any other substance. Thus, it emerges that only those PVC mixed with any other substance can fall under the scope of CTH 390421. Whereas the impugned PVC is not mixed with any other substance, therefore, they cannot fall under the heading 390421. (emphasis added) 9. We find that as per the HSN when the imported goods are falling under a specific heading of the Customs Tariff, the goods must be classified under that heading only. This first principle of classification as also stated by the Hon'ble Supreme Court in several judgments, some referred to above, has also been stated by the Commissioner Appeals himself in his order dated 19.01.2015 in the case of M/s Lila Polymers (supra). However, in the appellant case the goods 'PVC resin grade SP660' imported by them was differentiated from the 'PVC Resin Suspension Grade SP660' imported by M/s Lila Polymers in the impugned order. 10. We find that the Ld. Commissioner Appeals in M/s Lila Polymers (supra), had classified the goods under CTH 39042110 on two grounds; (i) The test report states that the submitte....
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.... level covers the goods specifically then it should be taken as the most appropriate heading. Further the CTH chosen by the department i.e. CTH 39041090 is a residual entry. Whereas the CTH 39042110 is specific. Rule 3 (a) of the General Rules for the Interpretation of Import Tariff has laid down that "the heading which provides the most specific description shall be preferred to headings providing a more general description". Therefore, CTH 39041090 being a residual entry at eight-digit level gets ruled out. 11. Based on the discussions we feel that the Ld. Commissioner Appeals had correctly interpreted the test reports and the law in M/s Lila Polymers (supra) and should not have allowed a change in semantics to have altered his opinion so drastically and to speak in two voices on the same issue. 12. We are hence of the opinion that the impugned order merits to be set aside and the appropriate Customs tariff heading for the impugned goods held to be 39042110. 13. We are fortified in our views by the order of a coordinate Bench of this Tribunal at Kolkata in the case of M/s Surabhi Enterprises (supra) cited by revenue. In that case the only dispute as stated by revenue was....