2004 (8) TMI 471 - AT - Customs

Summary

Issues: Classification of imported goods under heading 6307.90, imposition of penalty, applicability of Chapter Note 5(a)(VII) and 5(b) of HSN, and appropriateness of lower authority's classification.

Classification of Imported Goods under Heading 6307.90:
The appellants were engaged in ship chandelling and lifting accessories business, importing Polyester Webbing Slings and Polyester Round Slings for lifting heavy cargo. The Revenue classified the goods under 6307.90, requiring a license due to restrictions on imports under this heading. The appellants did not contest the classification and order on Round Slings. The lower authorities confirmed the classification, imposing a penalty and a fine. The nature of the imported entity, being a technological need satisfying product rather than a consumer item, supported the classification under 6307.90. The Tribunal upheld the lower authority's classification under 6307.90, as the goods could only be used in conjunction with a machine for lifting heavy cargo, thus necessitating a license.

Imposition of Penalty:
A fine of Rs. 4,00,000/- in lieu of confiscation and a penalty of Rs. 1.5 lakhs were initially imposed, which was reduced to Rs. 1 lakh by the CC (Appeals). The appellants did not contest the classification and order on Round Slings, leading to the reduction in penalty. The Tribunal affirmed the penalty reduction to Rs. 1 lakh, as the appellants did not challenge the classification and order concerning Round Slings.

Applicability of Chapter Note 5(a)(VII) and 5(b) of HSN:
Chapter Note 5(a)(VII) of HSN, covering cords and braids commonly used in machinery or plant, did not apply to the imported entity used for lifting heavy loads. Similarly, Note 5(b) did not cover the entities under consideration, as the ejusdem generis rule was applied, ruling out classification under Chapter 59. Examination of an alternate classification under 56.07 also proved inapplicable upon reading the HSN note. Therefore, classification under Chapter 59 was deemed unsuitable, and the lower authority's classification under 6307.90 was upheld.

Appropriateness of Lower Authority's Classification:
The Tribunal found no reason to overturn the classification determined by the lower authority, as the appeal lacked merit. The order for classification under 6307.90 was deemed appropriate based on the nature of the imported entity and the relevant HSN notes. Consequently, the appeal was dismissed, affirming the lower authority's classification and decision.

This detailed analysis of the judgment highlights the issues of classification under heading 6307.90, penalty imposition, interpretation of Chapter Notes in the HSN, and the appropriateness of the lower authority's classification decision, providing a comprehensive understanding of the legal reasoning and outcome of the case.