2001 (7) TMI 1286 - HC - Customs

Summary

Issues Involved:
1. Classification of 'necktie' for drawback purposes.
2. Whether 'necktie' is a readymade garment.
3. Whether 'necktie' is a 'made up' article.

Summary:

1. Classification of 'necktie' for drawback purposes:
The primary issue in this writ application u/s 226 of the Constitution of India is whether the authorities were justified in classifying 'necktie' exported by the petitioner as "made-up articles" under Heading No. 6203(C) of the drawback table. The petitioner exported consignments of polyester neckties and claimed a drawback under Heading No. 6204, arguing that neckties are readymade garments. However, the Assistant Commissioner of Customs classified them under Heading No. 6203(C). The petitioner's appeals to the Commissioner of Customs (Appeal) and the Central Government u/s 129 (DD) of the Customs Act were dismissed, leading to this writ application.

2. Whether 'necktie' is a readymade garment:
Mr. Banerjee, counsel for the petitioner, argued that a necktie should be classified as a readymade garment under Heading 6204 based on its plain dictionary meaning. He further contended that if not a readymade garment, it should fall under Heading No. 6201. The court examined various dictionary definitions and concluded that a 'necktie' is a decorative material worn around the neck and is an accessory of clothing, not a garment itself. The court rejected the petitioner's contention that a necktie is a readymade garment, noting that it is not meant for covering the human body but is a decorative article.

3. Whether 'necktie' is a 'made up' article:
The court noted that the term 'made up' is not defined in the Drawback Schedule but is defined in the Customs Tariff Act, 1975, and the Central Excise Tariff Act, 1985. The authorities had classified the necktie under Heading 6203(C) by treating it as a 'made up' article. However, the court found that the use of the term "namely" in Clause 6203(A) indicates the exhaustiveness of the list of 'made up' articles. The court held that 'tie' or 'necktie' not being listed in Clause 6203(A), cannot be classified under Clause 6203(C) simply because it appears along with 'shawls' and 'scarves' in other statutes. The court concluded that the appropriate classification for 'necktie' should be under Serial No. 6201, which covers all other articles of apparel or clothing accessories not specified elsewhere.

Conclusion:
The court set aside the orders of the authorities below, directing the Assistant Commissioner of Customs to reclassify the disputed consignments of 'necktie' under Heading 6201 of the Drawback Rules within three months. The writ application succeeded, and no orders as to costs were made.