2003 (5) TMI 278 - AT - Customs

Summary

Issues:
Classification of imported dressed fur skin of lamb under Chapter Heading 4302.13 of the Customs Tariff Act with NIL rate of duty and exemption from Additional Duty or SAD.

Analysis:
The Revenue appealed against the Commissioner (Appeals) order that classified the imported dressed fur skin of lamb under Chapter Heading 4302.13 with NIL rate of duty and exemption from Additional Duty or SAD. The Commissioner noted that Chapter 43 of the Central Excise Tariff covers only "manufactures of fur skin and artificial fur" liable to duty. The Revenue argued that the items were tanned/dressed, not raw, citing the definition of "dressing" from Chamber's Technical Dictionary. They claimed that the activity constituted manufacturing, thus subject to additional duty and SAD under Chapter 43.

The Counsel for the Appellant contended that dressing was not a manufacturing process but a treatment to remove impurities and preserve the fur skin. The imported skins were meant for tanning and re-export, not for immediate sale as manufactured items. They argued that the process should create a new marketable commodity, citing legal precedents. They emphasized that the dressed fur skin of lamb remained raw and not tanned, hence not falling under Chapter 43 for duty levy.

The Tribunal carefully considered the submissions and upheld the Commissioner's decision. It was noted that the fresh slaughtered lamb skins were dressed with oil for preservation, not for manufacturing into tanned fur skins. The Tribunal highlighted the lack of evidence from the Revenue to prove manufacturing had occurred. As the burden of proof for classification lay with the Revenue, and in the absence of evidence showing the skins had undergone manufacturing, the Tribunal accepted the importer's claim that they imported raw skins for further processing. Consequently, the Tribunal rejected the Revenue's appeal, affirming the classification under Chapter Heading 4302.13 with NIL rate of duty and exemption from Additional Duty or SAD.

This detailed analysis of the judgment highlights the key arguments, legal interpretations, and the Tribunal's reasoning leading to the decision to uphold the classification of the imported dressed fur skin of lamb under the specified Chapter Heading with the associated duty exemptions.