TaxTMI 
TaxTMI 
2026 (1) TMI 1101
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....fferent kinds viz., Drawing & Writing Board, Black-White Writing Board, Drawing Colour Doodle from China and onward supplies the same for sale to customers in India. The appellants had filed Bill of Entry No.6568395 dated 07.12.2021 declaring the goods as 'Drawing Board' and self-assessed the same under Section 17(1) of the Customs Act, 1962, by classifying it under Customs Tariff Item (CTI) 9610 0000 discharging applicable Basic Customs Duty (BCD) at 10% and Integrated Goods and Services Tax (IGST) at 18%. 2.2 On the basis of intelligence, the aforesaid imported goods were kept on hold and was examined by the Customs CIU officers under the supervision of officers of DGoV. Upon examination of the imported goods covered under the B/E dated 07.12.2021 at CFS Speedy Multimode Ltd. Container Freight Station, Nhava Sheva on 23.12.2021, it was reported as follows: "The supplier's details are M/s Zhejiang Li Heng International Trading Co. Limited, China and country of origin of goods declared is China and port of loading is Ningbo. The HS Code and unit price as declared are as follows: Sr. No. Bill of Entry No. HS Code Details of Goods Total Quantity (Pcs) Un....
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....80,00,000/- respectively. Besides, the original authority also imposed penalty on the appellants-importer for Rs.4,50,42,774/- under Section 114A ibid and Rs.4,51,00,000/- under Section 114AA on the appellants. Being aggrieved with the impugned order dated 05.02.2024, the appellants have filed this appeal before the Tribunal. 3.1. Learned Advocate for the appellants submitted that the imported goods 'Colour Doodle' is a drawing board that comprises of a writing surface, i.e., a magnetic board and is clearly designed to be used for writing or drawing with pen / magnetic pen. The subject goods can in no manner be said that it is designed for the purpose of playing or amusement as it purely in the nature of slate and does not have any other feature or characteristics for playing as toy. 3.2 Learned Advocate further submitted that the classification of imported goods declared by the appellants were duly supported by the Harmonized System of Nomenclature (HSN) which provides for coverage of goods under heading 9610 which encompasses slates composed of various materials, including but not limited to wood, paperboard, textile materials, asbestos, cement, etc., coated with powdered s....
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.... 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. Customs Act, 1962 "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." Customs Tariff Act, 1975 "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. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Section 2. Duties specified in the Schedules to be levied. - The rates at which duties of customs shall be levied under the Customs....
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....s 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, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential ch....
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....respond 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." 8.1 From plain reading of the above legal provisions, it transpires that in order to determine the appropriate duties of customs payable on any imported goods, one has to make an assessment of the imported goods for its correct classification under the First Schedule to Customs Tariff Act, 1975 in accordance with the provisions of the Customs Tariff Act by duly following the General Rules for Interpretation (GIR) and the General Explanatory notes (GEN) contained therein. The First Schedule to the Customs Tariff Act, 1975 specifie....
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....ned goods, for determining correct classification. The relevant headings and their tariff entries in the First Schedule to the Customs Tariff Act of contending Chapter headings 9503 and 9610 are extracted as below: "CHAPTER 95 Toys, games and sports requisites; parts and accessories thereof Notes: xxx xxx xxx xxx xxx Tariff Item Description of goods (1) (2) 9503 TRICYCLES, SCOOTERS, PEDAL CARS AND SIMILAR WHEELED TOYS; DOLL'S CARRIAGES; DOLLS; OTHER TOYS; REDUCED-SIZE ("SCALE") MODELS AND SIMILAR RECREATIONAL MODELS, WORKING OR NOT; PUZZLES OF ALL KINDS 9503 00 - Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds: 9503 0010 --- Electronic 9503 0020 --- Non electronic --- Parts: 9503 0091 --- Of electronic toys 9503 0099 --- Other And "CHAPTER 96 Miscellaneous manufactured articles Notes : xxx xxx xxx xxx xxx Tariff Item Description of goods (1) (2) 9610 0000 SLATES AND BOARDS, WITH WRITING OR DRAWING SURFACES....
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.... or any other coating suitable for writing on, or sheeting of plastics, are covered under this heading. Further, slates or boards, incorporating counting frames, lines, squares, lists of commodities does not remove it from the scope of coverage of the product from this heading and it would continue to classify under 9610 and not in any other heading. 8.5 Broadly, we find that the chapter heading 9503 deals with "toys", whereas the chapter heading 9610 deals with products of "slates and boards" for writing or drawing. It is not in dispute that the imported goods are used for writing or drawing or scribbling and such matter written, drawn could be erased and again it could be used for a number of times. As was noted by the customs officers who had examined the goods as well as the product display that it can 'draw pictures, write messages, play games anywhere you go', such usage of the product does not obviate the nature of the product as slate or board for writing on the surface with a pen or other marker. Therefore, playing with counting frames or drawing which create amusement cannot qualify for classification as 'educational toy' under CTI 9503 0090, since only toy chemistry; ....
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....dings, we would like to examine the HS explanatory notes of the WCO, which describe in detail the scope and coverage of goods under Customs classification. The extract of HS classification in respect of relevant headings 9503 and 9610 are given below: "Harmonized Commodity Description and Coding System Explanatory Notes 95.03 - Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds. This heading covers : (A) Wheeled toys. These articles are usually designed for propulsion either by means of pedals, hand levers or other simple devices which transmit power to the wheels through a chain or rod, or, as in the case of certain scooters, by direct pressure of a person's foot against the ground. Other types of wheeled toys may be simply drawn or pushed by another person or driven by a motor. These toys include : (1) Children's tricycles and the like, but excluding bicycles of heading 87.12. (2) Two- or three-wheeled scooters designed to be ridden by children, as well as....
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....f possessing predominantly human physical characteristics (e.g., angels, robots, devils, monsters), including those for use in marionette shows. (ii) Toy pistols and guns. (iii) Constructional toys (construction sets, building blocks, etc.). (iv) Toy vehicles (other than those of group A), trains (whether or not electric), aircraft, boats, etc., and their accessories (e.g., railway tracks, signals). (v) Toys designed to be ridden by children but not mounted on wheels, e.g., rocking horses. (vi) Non-electric toy motors, toy steam engines, etc. (vii) Toy balloons and toy kites. (viii) Tin soldiers and the like, and toy armaments. (ix) Toy sports equipment, whether or not in sets (e.g., golf sets, tennis sets, archery sets, billiard sets; baseball bats, cricket bats, hockey sticks). (x) Toy tools and implements; children's wheelbarrows. (xi) Toy cinematographs, magic lanterns, etc .; toy spectacles. (xii) Toy musical instruments (pianos, trumpets, drums, gramophones, mouth organs, accordions, xylophones, musical boxes, etc.). (xiii) Dolls' houses and furniture, including....