2001 (11) TMI 478 - AT - Customs

Summary

Issues:
Classification of imported components of printer calculator under Customs Tariff Act and Export-Import Policy.

Analysis:
1. The appeal concerned the classification of imported components of a printer calculator model under the Customs Tariff Act and Export-Import Policy. The ld. Commissioner confirmed the confiscation of the items based on the classification under ITC (HS) sub-heading 84702100 and Customs sub-heading 8470.21, considering them as consumable items requiring a license.

2. The appellants filed a Bill of Entry seeking classification under sub-heading 84.73 of the Customs Tariff Act, which covers parts and accessories suitable for use with machines. However, the department initiated proceedings to classify the items as a fully complete printer calculator under Heading 8470.21, requiring a license due to being considered consumer goods.

3. The ld. Commissioner (Appeals) confirmed the confiscation but reduced the fine, applying Interpretative Rule 2(a) of the Customs Tariff Act to classify the items as a complete printer calculator. The appellants argued that the items were not in a completely knocked-down (CKD) condition and should be classified as parts under 84.73, as they required additional processes and components to become a final product.

4. The appellant's counsel argued that Interpretative Rules of Customs Tariff should not be applied for classifying items under ITC (HS) classification, citing previous Tribunal judgments. The Commissioner acknowledged the manufacturing processes undertaken by the appellants but still applied the Interpretative Rules for classification.

5. The Tribunal reviewed previous judgments, including Wipro Ltd., L.M.L. Ltd., and K.R. Trading Co., which emphasized that Interpretative Rules of Customs Tariff should not be used to interpret ITC policy. These judgments highlighted the distinction between Customs Tariff and Export-Import Policy classifications.

6. The Tribunal concurred with the appellants, stating that the Customs Tariff Interpretative Rules should not be applied to ITC classification. The Tribunal set aside the confiscation and penalty, allowing the appeal and rejecting the application of Interpretative Rule 2(a) for classification under the ITC (HS) classification.

7. The Tribunal's decision was based on the principle that the Customs Tariff Interpretative Rules should not dictate the classification under the ITC (HS) classification. The Tribunal found merit in the appeal and overturned the impugned order, emphasizing the need for separate classification standards for Customs Tariff and Export-Import Policy.