TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 1754
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.... 2.1 The applicant is intending to import "Foil Balloons" and "Balloons made of Natural Rubber Latex" from Vietnam, Malaysia, Thailand and China. Foil Balloons are used for party decoration and entertainment purposes. These balloons ordinarily have shiny reflective surfaces and are often printed with colour pictures and patterns for gifts and parties. These are used for decoration for various events such as birthday, and marriage. The said Foil Balloons are of the shape of alphabets, numbers and other shapes such as heart, star etc. The said foil balloons are not used as toys but are only used for decoration and entertainment purposes. Balloons made of Natural Rubber Latex are toy balloons primarily used as children's toys and also for decoration. They come in many sizes and shapes. 2.2 The applicant is of the bonafide belief that the subject goods "Foil balloons" are rightly classifiable under heading CTH 9505 9090 under the heading "other" and the main heading deals with festive, carnival and other entertainment articles, including conjuring tricks and novelty jokes. The goods balloons made up of natural rubber latex (or) latex balloons are rightly classifiable under th....
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....y balloon which ordinarily falls under heading 9503 of the Customs Tariff Act, 1975. Due to the fragile nature of the foil balloons and its actual use, the goods cannot be used by children as a toy. 2.7 In this respect the applicant submitted that the Indian Standard applicable for toys is given in IS 9873 (Part 1):2019. The said Indian Standard categorically states that the following products are not included within the scope of the said Indian Standard. a) bicycles, except for those considered to be toys, i.e., those having a maximum saddle height of 435 mm (see Clause E.1); b) slingshots; NOTE "Slingshots" are also known as "catapults". c) darts with metal points; d) home and public playground equipment; e) compressed air- and gas-operated guns and pistols (see Clause E.1); f) kites (except for the electric resistance of their strings, which is included); g) model kits, hobby and craft items, in which the finished item is not primarily of play value; h) sporting goods and equipment, camping goods, athletic equipment, musical instruments and furniture; however, toys which are their counterparts are include....
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....tive article is the end use. 2.8 The Hon'ble Supreme Court in the case of Collector of Customs Vs. Kumudam Publications [1997 (96) ELT 226 (SC)] has held that "it is not entirely correct to say that the end use or function of the goods is irrelevant to decide the question of classification". A three Judge Bench of the Hon'ble Supreme Court had also relied upon the function and end use in determining the classification in Indian Tool Manufactures Vs. Asst. Collector of Central Excise, Nasik & Others reported in 1994 (74) ELT 12 (SC). 2.9 The Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Wockhardt Life Sciences Ltd reported in 2012 (277) ELT 299 (SC) had held that the functional utility and predominant usage of the commodity must be taken into account apart from the understanding in common parlance to determine the correct classification of the product. Applying the said test to the present case, it can be safely concluded that the goods are rightly classifiable under the heading 9505 9090. The applicant has also submitted that even by applying the common parlance test, the goods in question cannot be termed to be a 'toy'. The goods....
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.... perhaps the most popular toy of children. The HSN Explanatory Notes to the heading 9503 states that the heading 95.03 covers the following goods. D). Other toys This group covers toys intended essentially for the amusement of persons (children or adults). However, toys which, on account of their design, shape or constituent material, are identifiable as intended exclusively for animals, e.g., pets, do not fall in this heading, but are classified in their own appropriate heading. This group includes: All toys not included in (A) to (C). Many of the toys are mechanically or electrically operated. These include :. (i) Toys representing animals or non-human creatures even if 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 c....
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....sifiable under CTH 9503 0020, BIS standards on toys which includes balloons play a crucial role in ensuring the safety of toys for children. Therefore, certificate regarding conformation of the goods to the standards prescribed by BIS is required in view of the DGFT vide Notification No. 26/2015-20 dated 01.09.2017 as amended vide Notification No. 33/2015- 20 dated 01.12.2019. Ministry of Commerce and Industry has issued Toys (Quality Control) Order, 2020 instructing the mandatory requirement of the certificates mentioning that the goods are conforming to the standards prescribed by BIS in this regard. Balloons (made of natural rubber latex) are generally identified as toys in common parlance the heading which provides most specific description is 9503 and classified under CTH 9503 0020, under the heading 'Non-electronic'. Without prejudice to the contention above, in the case of Wood craft Products Ltd reported in 1995 (77) ELT 23 (SC) Supreme court held that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. 2.14 In view of the above, the applicant has submitted that the subject good "Foil balloons" are cla....
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....oil balloons are sold only for the purpose of toys, whether or not having decorative purpose. Thus, in the normal course of trading in balloons there is no difference of use as toys or for decoration. Further, as per Analytics Report 46/2021-22 dated 29.10.2021 issued by NCTC (National Customs Targeting Centre) Mumbai had confirmed that balloons made of latex/ rubber or foil/ mylar or plastic, also commonly known as party or decoration balloons need to classified under heading 9503. 3.3 However, the HSN explanatory notes, under Heading 9505 reads with festive, Carnival and other entertainment articles, including conjuring tricks and novelty jokes. The cargo under 9505 indicates that the goods covered under that head are associated with festivals as ornaments or decorative items. These items are not available as play things for kids as they are placed on Christmas trees or as decorative items of celebration. This chapter entry extends to only those decorations that are used for religious festivals and carnivals. Further, the goods "Foil Balloon" and "Balloons made of Natural Rubber Latex" liable to classification under CTH 95030090 are to be in conformity with BIS standards vide ....
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....erit classification under CTI- 9505 9090. He further submitted that regular balloons are made of latex/rubber and merit classification under chapter heading 9503 0020. It was asked to Sh. Radhakrishnan to provide the declaration of the constituting materials comprising the foil balloon. He submitted that Foil balloon is not toy balloon but it is used for decoration for various events like birthday, marriages etc. He relied upon case laws in the case reference: 75483- 75484/2023 dated 17/05/2023- order passed by Hon'ble CESTAT Kolkata and the Advance Ruling: CAAR/MUM/ARC/61/2023 dated 5/9/2023. He also relied upon case law CC v/s Kumudam Publication 1997(96) ELT 226(SC), 1994(74) ELT (12) SC, 2012 (277) ELT 299(SC). Sh. Ravi Verma, Appraiser Gr VI from the Chennai Customs submitted that department has not accepted the order of Hon'ble CESTAT dated 17/05/2023 and CAAR Mumbai order dated 05/09/2023 and filed appeal. He also submitted that in NSC meeting it is comprehended that any balloon may fall under CTH 9503, more particularly 9503 0090. On specifically asked, the department informed that no stay of the operation was granted in any of the above appeals by the compete....
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....e first schedule of the Customs Tariff Act, 1975. 7. I find that "Foil Balloons" are used for party decoration and for entertainment purposes. These balloons ordinarily have shiny reflective surfaces and are often printed with colour pictures and patterns for gifts and parties. "Foil Balloons" are used for decoration for various events such as birthday, marriage, new-year eve celebration and many other joyous programmes. The said foil balloons are available in various shapes such as alphabets, numbers, heart, star etc. The said foil balloons are not used as toys but are only used for decoration and entertainment purposes. "Foil Balloons" are very fragile and non-durable goods which are not purchased in the market for the purpose of play by children. "Foil Balloons" are used like festoons also as explained in the application. Some images of the Foil Balloons submitted by the applicant are as under: They are decorated on the wall on various joyous occasions. the rejoinder of applicant that Toy Balloons mentioned in paragraph (D)(vii) of the Explanatory Notes to heading 9503 refer to latex/rubber balloons is correct and grounded in facts. I am also of the view that "Foil Balloon....
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.... they are durable, light-weight and can hold their shape for a longer period compared to traditional latex balloons. 10. Further, to find out correct classification of the "Balloons made of natural rubber latex" relevant portion of heading 9503 is reproduced as under: 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 00 10 --- Electronic 9503 00 20 --- Non electronic --- Parts: 9503 00 91 ---- Of electronic toys 9503 00 99 ---- Other CTI 9503 0020 specifically covers Non electronic toys and the applicant is in agreement with this classification when the subject goods i.e. balloons are made of Latex/Rubber. Illustrative image of the latex balloons as submitted by the applicant is as under: 11. Further, as per the FINAL ORDER NO. 75483-75484/2023 dated 17.05.2023 of CESTAT, Kolkata, the CESTAT has held that decoration foil balloons do not fall under the purview of BIS. CESTAT while arriving at this decision has relied upon a clarification from the De....