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Issues: Classification of imported honing sticks under Customs Tariff Act, 1975
The judgment by the Appellate Tribunal CEGAT New Delhi revolves around the classification of honing sticks imported by the appellants under the Customs Tariff Act, 1975. The primary issue at hand is whether these honing sticks should be classified under sub-heading (1) of Heading No. 68.01/16 as per the Department's classification or under sub-heading (2) of the same Heading as argued by the appellants. The appellants contended that the impugned goods, described as "honing sticks for the manufacture of ball and roller bearings," were machine-operated hones. Their argument focused on the interpretation of the expression "but excluding hand polishing stones, whet stones, oil stones, and hones" in sub-heading (2). They claimed that the term "hand" only excluded hand-operated hones from sub-heading (2), implying that machine-operated hones should remain classified under this sub-heading, attracting a lower rate of duty. They supported their argument by citing Explanatory Notes from the BTN Heading 68.05 related to hand polishing stones, whet stones, oil stones, and hones. In contrast, the Department, represented by Shri Chatterjee, contended that the Explanatory Notes from the BTN were not part of the Customs Tariff Act. They argued that based on the plain interpretation of the Tariff, the term "hand" qualified all types of hones, whether hand-operated or machine-operated, excluding them from sub-heading (2) and justifying their classification under sub-heading (1). After careful consideration, the Tribunal sided with the Department's interpretation. They emphasized that since the Explanatory Notes to the BTN were not integrated into the Customs Tariff, the classification had to rely on the plain wording of the Tariff itself. The Tribunal concurred with the Department that the term "hand" in the expression "but excluding hand polishing stones, whetstones, oil stones, and hones" excluded both machine-operated and hand-operated hones from sub-heading (2). Consequently, they upheld the Department's classification of the honing sticks under sub-heading (1) and dismissed the appeal.
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