2012 (12) TMI 554 - AT - Customs

Classification Refrigerator originating from Thailand - benefit of notification No. 85/04-Cus - assessing officer classified the goods under CTH 84181090 on the ground that the goods under importation were combined refrigerators-freezers, fitted with separate external doors and therefore, not eligible for the aforesaid exemption Held that - Classification of combined refrigerator-freezer with separate external doors would be under sub-heading 8418.10 and not under 8418.21 as was being followed by certain customs field formations. Accordingly these goods are not covered under sl.No. 50 of notification No. 85/2004-Cus dated 31-8-2004 in favor of revenue

Issues Involved:

1. Classification of imported goods under the correct Customs Tariff Heading (CTH).
2. Eligibility for concessional rate of customs duty under Notification No. 85/04-Cus dated 31-8-2004.
3. Interpretation of the term "refrigerator" in commercial parlance vs. technical sense.
4. Applicability of General Interpretative Rules for Customs Tariff classification.
5. Relevance and weightage of Circular No. 23/2008-Cus dated 29-12-2008 issued by the Central Board of Excise & Customs (CBE&C).

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:

The primary issue was whether the imported goods, described as Hitachi Brand Refrigerators from Thailand, should be classified under CTH 84181090 (Combined refrigerator-freezers, fitted with separate external doors) or CTH 84182100 (Refrigerators, household type). The appellant argued that the goods, despite having separate refrigerator and freezer compartments with separate doors, should be classified as household refrigerators under CTH 84182100. The Revenue contended that the goods fit the specific description of combined refrigerator-freezers under CTH 84181090.

The Tribunal examined the product specifications, which indicated distinct refrigerator and freezer compartments with separate external doors, and concluded that the goods were not simple refrigerators but combined refrigerator-freezers. Thus, the correct classification was determined to be CTH 84181090.

2. Eligibility for Concessional Rate of Customs Duty:

The appellant claimed the benefit of Notification No. 85/04-Cus, which provides a concessional rate of customs duty for specified goods imported from Thailand. However, since the goods were classified under CTH 84181090, they did not qualify for the exemption under the said notification, which applies to goods classified under CTH 84182100. Consequently, the appellant was not eligible for the concessional rate of duty.

3. Interpretation of "Refrigerator" in Commercial Parlance vs. Technical Sense:

The appellant argued that the term "refrigerator" should be interpreted in commercial parlance, implying that refrigerators with freezer compartments should still be classified as refrigerators. The Tribunal rejected this argument, noting that the Customs Tariff, based on the Harmonized System of Nomenclature (HSN), already incorporates commercial parlance. The Tribunal emphasized that the classification should be based on the specific description provided in the tariff heading, which in this case was combined refrigerator-freezers under CTH 84181090.

4. Applicability of General Interpretative Rules:

The appellant invoked Rule 3(c) of the General Interpretative Rules, arguing that if the goods could be classified under two headings, the heading which occurs last in numerical order should be preferred. The Tribunal clarified that the rules must be applied sequentially, and Rule 3(c) could only be invoked if Rules 1, 2, and 3(a) and (b) were exhausted. Since Rule 1 determined the classification based on the specific description in heading 841810, there was no need to proceed further to Rule 3(c). Thus, the appellant's argument was misplaced.

5. Relevance and Weightage of Circular No. 23/2008-Cus:

The Revenue relied on Circular No. 23/2008-Cus, which clarified that combined refrigerator-freezers with separate external doors should be classified under sub-heading 841810 and not under 841821. The Tribunal acknowledged that while the circular is not binding, it carries significant weight as it reflects the interpretation of the apex body responsible for implementing customs laws. The Tribunal gave due consideration to the circular, which supported the classification under CTH 84181090.

Conclusion:

The Tribunal dismissed the appeals, holding that the correct classification of the imported goods was under CTH 84181090, and the appellant was not eligible for the benefit of Notification No. 85/04-Cus. The Tribunal emphasized the importance of strict interpretation of fiscal statutes and the need to follow the specific descriptions provided in the Customs Tariff for classification purposes.

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