2010 (11) TMI 735 - CGOVT - Customs

Revision application Classification - lamp holders - Drawback Held that - As per provisions of Notification No. 68/07(NT) dated 16-6-07 the General Rules for the Interpretation of the First Schedule of the Customs Tariff Act, 1975 shall mutatis mutandis apply for classifying the export goods listed in drawback schedule. As per Rule 3 of General Rules for the interpretation of customs tariff the goods are to be classified in the heading which provides the most specific description rather than in a heading providing a more generic description. In view of the provisions of said rules, the lamp holders being specifically mentioned in Heading 8536 are to be classified in the CTH 8536 as held by lower authorities. The argument of the applicant that by classifying goods in CTH 8536 he gets lower drawback has no legal force and same cannot be entertained in these proceedings. As such, Government finds no infirmity in the impugned order-in-appeal and upholds the same, revision application thus rejected as being devoid of merits

Summary

Issues: Classification of exported goods for duty drawback under Customs Tariff Act and Duty Drawback Schedule.

Analysis:
1. Classification Dispute: The applicant, M/s. Ajanta Electricals, exported lamp holders made of brass and claimed duty drawback under CTH 8538. However, the AC, Export classified the goods under CTH 8536, reducing the duty drawback from 18% to 4%. A penalty was imposed for seeking the wrong classification.

2. Appeal and Revision: The applicant appealed to the Commissioner of Customs (Appeals), who set aside the penalty but upheld the classification decision. Subsequently, a revision application was filed before the Central Government challenging the classification under CTH 8536.

3. Grounds of Revision: The revision application contended that the classification under CTH 8536 was erroneous. The applicant argued that lamp holders should be classified under CTH 8538 02 based on the manufacturing process and duty paid. They also highlighted discrepancies between the Duty Drawback Schedule and the Customs Tariff Act.

4. Duty Drawback Scheme: The applicant emphasized the objective of the duty drawback scheme to relieve exported goods of duties and taxes to enhance competitiveness in the international market. They argued that the duty drawback should at least equal the excise duty paid on the goods.

5. Legal Interpretation: The Government analyzed the classification dispute based on the Customs Tariff Act and Duty Drawback Schedule. They referred to the specific descriptions under CTH 8536 and CTH 8538, emphasizing the most specific classification rule for goods.

6. Decision: The Government upheld the lower authorities' classification under CTH 8536, rejecting the applicant's argument for classification under CTH 8538 02. They emphasized the application of General Rules for classification and dismissed the revision application as lacking legal merit.

In conclusion, the judgment resolved the classification dispute by affirming the classification of lamp holders under CTH 8536 for duty drawback purposes, based on specific descriptions and legal provisions. The detailed analysis considered the manufacturing process, duty paid, and alignment between the Duty Drawback Schedule and Customs Tariff Act. The decision highlighted the importance of specific classification rules and upheld the lower authorities' classification decision, rejecting the revision application.