TaxTMI 
TaxTMI 
2023 (11) TMI 1433
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....ation, the Applicant has approached the present authority for the purpose of advancing ruling upon the "classification of the product" intended to be imported under the description "Balloons" and accordingly, determining the correct Chapter/Section Head under the provisions of the Customs Tariff Act, 1975 for the purpose of correct application of Customs Duty or any benefits thereon, as per the provisions of the Customs Act, 1962. 2. The Applicant proposes to import 'Balloons' from countries outside India. The goods will be described as "Balloons" for the purpose of import in the documents of Import. The goods shall be small, thin balloons, light weighted, elastic, made of latex rubber material and available in different unique colours. As far as the composition/material of the goods are concerned, the goods "Balloons" shall be made up of Latex Rubber mainly. Balloons will be Biodegradable and non-toxic material which naturally decomposes. Being thin layered balloons, they can be inflated with water only and shall not be fit for the purpose of filling air or gas. The balloons are intended for one-time use. By filling it with plain or coloured water, it can be used for ce....
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....ILAR RECREATIONAL MODELS, WORKING OR NOT ; PUZZLES OF ALL KINDS 950300 - 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: 95030010 --- Electronic u 70% - 95030020 --- Non electronic u 70% - --- Parts: 95030091 ---- Of electronic toys u 70% - 95030099 ---- Other u 70% - c) Customs Tariff Head 95059090 :- Thirdly, the goods used for parties, celebrations, carnivals, festivals, entertainment articles etc. are classifiable under Customs Tariff Head 9505 which states as under :- 9505 FESTIVE, CARNIVAL OR OTHER ENTERTAINMENT ARTICLES, INCLUDING CONJURING TRICKS AND NOVELTY JOKES 95051000 - Articles for Christmas festivities kg. 20% - 950590 - Other : 95059010 --- Magical equipment kg. 20% - 9505....
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.... Classification of the goods intended to be imported as "Balloons" falling under the Chapter Tariff Head 4016; or CTH 9505 but does not fall under CTH 9503 of the Customs Tariff Act, 1975- i. The description of the goods intended to be imported is "Balloons" ii. Appropriate classification of the imported product as "Balloons" as per the General Rules of Interpretation; iii. As per material composition i.e. Latex Rubber, the goods are liable to be classified under CTH 4016; iv. As per the intended use, the goods are liable to be classified under CTH 9505 v. Goods do not get classified as "Toys" under CTH 9503; A. Even the mandatory BIS requirement standards do not mention any product of the description "Latex Rubber Balloon" to classify the Applicant's Product as "Toys"; B. Without prejudice, if the importer's product is classified as "Toys" there is no requirement of BIS registration for the purpose of import of the Applicant's product as they do not fall under the BIS standards requirements. Non-Binding value of the Explanatory Notes of the CTH 4016 95 90 under entry 284 of Notification No. 50/2017-Customs inser....
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....rtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained 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 o....
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....reason, goods are, prima facie, classifiable under two or more headings, classification shall be affected as follows: 3.a. The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained 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. 3(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. 3 (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. Further, Rule 4 provided that....
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....um generis for the Goods "Balloons", it nowhere falls under the category of any working model, recreational models or puzzles etc. The Applicant's Goods i.e. "Balloons" are not the general rubber latex balloons used for the purpose of playing by the kids generally. On the contrary, the goods shall be small, thin balloons, light weighted, elastic, made of latex rubber material and available in different unique colours. The goods "Balloons" shall be made up of Latex Rubber mainly. "Balloons" will be Biodegradable and non-toxic material which naturally decomposes. Being thin layered balloons, they can be inflated with water only and shall not be fit for the purpose of filling air or gas. The balloons are intended for one-time use. By filling it with plain or coloured water, it can be used for celebrations in Holi. It can be used both by kids of any age as well as adults for the purpose of celebrations. The "Balloons" may be imported in large quantities and shall be sold in small bunches as a single pack through retail channels. The "Balloons" intended to be imported are not the regular balloons for the use of children for playing due to their size, shape and limited shelf life. ....
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....oons" are not the general rubber latex balloons used for the purpose of playing by the kids generally. On the contrary, the goods shall be small, thin balloons, light weighted, elastic, made of latex rubber material and available in different unique colours. The goods "Balloons" shall be made up of Latex Rubber mainly. "Balloons" will be Biodegradable and non-toxic material which naturally decomposes. Being thin layered balloons, they can be inflated with water only and shall not be fit for the purpose of filling air or gas. The balloons are intended for one-time use. By filling it with plain or coloured water, it can be used for celebrations in Holi. It can be used both by kids of any age as well as adults for the purpose of celebrations. The "Balloons" may be imported in large quantities and shall be sold in small bunches as a single pack through retail channels. The "Balloons" intended to be imported are not the regular balloons for the use of children for playing due to their size, shape and limited shelf life. 10. Though the Harmonized System of Nomenclature has been adopted internationally and forms the basis of the Customs Tariff Head though not binding. Applicant places ....
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....). 10.1 Thus, on perusal of the above HSN notes, it is apparent that the CTH 9505 intends to include the goods used specifically for festival celebration and in view of their intended use is generally made of non-durable material. In the present case as well, the Applicants goods i.e. "Balloons" are non-durable, have limited shelf life, are used specifically for the Holi celebrations, intended to be used for both children as well as adults. Hence, the most appropriate classification as per the Applicant shall be CTH 9505. 10.2 The last option i.e. CTH 9503 does not appear to be an optimal classification of the goods "Balloons". The said classification is opted by the Ld. Department in various imports only on the basis of the Explanation notes of the CTH 4016 95 90 mentioned under entry 284 of Notification No. 50/2017-Customs inserted vide Notification No. 02/2021-Customs dated 01.02.2021 wherein it was stated that: In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and sub-section (12) of section 3 of Customs Tariff Act, 1975 (51 of 1975), the Central Government, on being satisfied that it is necessary in the pu....
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....standing the intention of the legislature to apply a reduced rate of 10% on the products falling under CTH 4016 95 90 but it does not alter the Chapter head itself for the purpose of classification. However, the Custom Head 9503 which deals with "non-electronic toys" under the category "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". The HSN notes to CTH 9503 cover "toy balloons" and do not specifically covers the product "Latex Rubber Balloon" small in size and intended use. Under the above residual head, the goods classified, if falls under exclusions shall be understood to have the Customs duty rate of 20% only. The Explanatory Notes are merely a clarification and not the amendment in the Tariff Head specifically classifying all balloons under CTH 9503. There has been no clarification, Notification or amendment in the Tariff head itself to cover the products "Balloons" made specifically for Holi Celebrations in general. There is no amendment or alteration in the Chapter Notes even to support the intention of the legislature in a....
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....door and Outdoor Family Domestic Use. IS 9873 (Part 7): 2017 Safety of Toys Part 7 Requirements and test Methods for Finger Paints IS 9873 (Part 9): 2017 Safety of Toys part 9 Certain Phthalates Esters in Toys and Children's Products IS 15644: 2006 Safety of Electronic Toys In the present case, the Applicant's goods are water "Balloons" for Holi celebrations which are not specifically intended for the use by the children of 14 years or below. Holi Celebration is done all over north India by children, and adults both and such water balloons are an important part of the celebration, hence, such goods are more aptly classifiable under items of celebrations instead of Toys to classify the same as "Toy Balloons" to be incorporated under CTH 9503. 10.7 Without prejudice to the above submissions, Applicant further submits that even if the Ld. Department intends to classify the goods under CTH 9503, the Applicant is not mandated to comply with the BIS requirement for the same, as discussed above. The Toy (Quality Control) Order required Toys for children below 14 years to be accompanied with the BIS certificate. The App....
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.... to be classified under more than two entries, then the appropriate classification shall be the entry coming later in the list. Hence, the Applicant's goods are liable to be classified under CTH 9505. The Toy (Quality Control) Order, 2020, does not apply to all the items falling under CTH 95 hence, the goods of description "Toys" and specifically used for children aged 14 years and less are only mandated to accompany by BIS certificate. 12. Further, The 'Jurisdictional Commissioner of Customs' (ICD Tughlakabad Imports) sent the comments to CAAR, New Delhi vide letter dated 13.09.2023. They submitted that :- "A balloon is a flexible bag that can be inflated with a gas, such as helium, hydrogen, nitrous oxide, oxygen, and air. Balloons are made from materials such as rubber, latex, polychloroprene, or a nylon fabric, and can come in many different colours. A toy balloon or party balloon is a small balloon which can be used for decoration, advertising and children's toys. Toy balloons are usually made of rubber or aluminized plastic and inflated with air or helium. They come in a great variety of sizes and shapes. The applicant has claimed that the....
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....n the foregoing paras. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework having bearing on the classification of the subject goods i.e. 'Latex Balloons'. 15.1 I find 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 "Toy Balloons" made of Latex don't deserve classification under the heading 9505 as they are not purchased in market as decorative items but as toys for the purpose of play by children. I would further like to emphasize the fact that as proposed in the application that the balloons would be only sold to those above the age of 14 years is bereft of any logic and conviction. Once the balloons are sold off, its very difficult to ascertain the end-use of it. Thus, it appears as an alibi to divert the attention from the fact that the subjected goods shall be classified as "toy balloons" and thus be out of the purview of CTH 9503. Further, it has been elaborated in the application and during the personal hearing that the said goods would be used as water ....
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....ount 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) ---- (ii) ---- (iii) ---- (iv) ---- (v) ---- (vi) ---- (vii) Toy balloons and toy kites. -------- From the description of CTH 9503 as provided above and in Customs Tariff Act, 1975, read with Explanatory Notes of the HSN of CTH 9503 (paragraph 3 & 4 above), it is evident that toy balloons are classifiable under the CTH (4-digit level), more particularly under CTH 9503 0099, if made of rubber latex or any other material. I hold that the subject goods are rightly classifiable under heading CTH 9503 0099 under the heading "other" and the main heading deals with 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. 15....