2010 (1) TMI 952 - CGOVT - Customs

Export - revision application - Cotton Terry Towels - Drawback was originally sanctioned for made up articles made chiefly from textile articles not elsewhere specified Held that - Parallel entry under sub Sr. No. 6305 of the drawback schedule in question relates to made up articles made chiefly from textile articles no elsewhere specified - goods are rightly classifiable under the sub Sr. No. 6305 as made up textile articles made chiefly from textile articles drawback allowed - revision applicable thus succeeds

Summary

Issues:
Classification of exported goods for drawback sanction under different sub Sr. numbers, interpretation of Ministry's circular affecting classification, consideration of relevant judgments by lower authorities, application of Public Notice for brand rate fixation, reconsideration of classification based on High Court's directions.

Analysis:
The revision application was filed against an order-in-appeal passed by the Commissioner of Customs & Central Excise concerning the classification of exported goods for drawback sanction. Initially, the drawback was sanctioned for dyed terry towels under one sub Sr. number and for undyed towels under different sub Sr. numbers. However, a Ministry's circular later affected this classification, leading to demands being issued and confirmed by the Assistant Commissioner. The Commissioner (Appeals) upheld the findings, and subsequent appeals were dismissed. The revision application was also dismissed, leading to a further appeal before the High Court of Kerala.

The applicant argued that the change in classification was unjustified as the goods had previously been classified differently for drawback sanction. They contended that the goods should be classified as "made-up articles made chiefly from textile materials not elsewhere specified," citing consistent Tribunal decisions. The reliance on the Ministry's circular was challenged, stating that it had only prospective application and could not affect previous classifications and drawback claims.

During the proceedings, the respondent-Department argued that the goods could not be classified as made-up articles, requiring brand rate fixation. The Government reviewed all submissions, Acts, Rules, circulars, and notifications, considering the scope of cited judgments. The High Court's directions led to a re-examination of the case, focusing on the classification issue and the applicability of the Ministry's circular.

The Government noted three distinct periods of exported goods and the corresponding applicable DBK schedules. The High Court's observations highlighted the flaws in the Ministry's letter and directed the Government to reconsider the classification. After re-examining the matter, the Government concluded that the goods were rightly classifiable under a specific sub Sr. number as made-up textile articles. Consequently, the impugned orders were set aside, and the revision application was allowed, providing the applicant with consequential reliefs.

In conclusion, the revision application succeeded based on the re-consideration of the classification issue in light of the available records and the High Court's directions, leading to a favorable outcome for the applicant.