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2013 (7) TMI 796 - CGOVT - CustomsClassification of goods duty drawback assessee exported High Voltage switchgear (Circuit breaker SF6) classifying the export goods under Heading 85.37 under claim for drawback - the AC contended that the export goods are not eligible for drawback under SS No. 85.37 but under SS No. 85.35 - Held that - The Tariff Items in the First Schedule to the Customs Tariff Act, 1975 and description of goods in Drawback Schedule are aligned at four digit level, the said circuit breakers exported are specifically covered under Heading 85.35 of the Drawback Schedule and therefore the same have to be classified under S.S. No. 85.35 of Drawback Schedule - the heading which provides the most specific description shall be preferred to heading providing a more general description - court relied upon Crompton Greaves Ltd. v. CCE (1996 (8) TMI 190 - CEGAT, NEW DELHI ) - Government notes as per Condition 2 of Notification No. 68/2007-Cus. (N.T.), dated 16-7-2007 and Notification No. 103/2007-Cus. (N.T.), dated 29-8-2007, General Rules for interpretation of the First Schedule to the Customs Tariff Act, 1975, shall mutatis mutandis apply for classifying the export goods listed in the said Schedule revision application decided against assessee
Issues Involved:
1. Classification of exported goods under the correct Customs Tariff Heading. 2. Eligibility for drawback rates based on the classification. 3. Finality of classification in shipping bills and its impact on drawback claims. 4. Interpretation of relevant headings and explanatory notes in the Customs Tariff and Drawback Schedule. Issue-wise Detailed Analysis: 1. Classification of Exported Goods: - The applicant exported High Voltage switchgear (Circuit breaker SF6) under 10 shipping bills between January 2008 to December 2008, classifying the goods under Heading 85.37 and claiming drawback. - The Assistant Commissioner of Customs reclassified the goods under Heading 85.35, leading to a lower drawback rate. - The applicant contended that the goods should be classified under Heading 85.37, arguing that the term "switchgear" refers to a combination of electrical disconnects, fuses, and/or circuit breakers used to isolate electrical equipment, and that the goods need not be housed in a board or console but can be mounted on any base. 2. Eligibility for Drawback Rates: - The Assistant Commissioner classified the goods under S.S. No. 85.35, attracting a drawback rate of 3.2% and 2.7%, instead of the claimed 4% and 3.6% under S.S. No. 85.37. - The applicant argued that the classification under Heading 85.37 should be maintained for drawback purposes, as the goods have been consistently exported under this classification for over a decade. - The applicant relied on various precedents and explanatory notes to support their classification under Heading 85.37. 3. Finality of Classification in Shipping Bills: - The applicant argued that once the shipping bills are finally assessed and the goods are exported, the classification adopted in these shipping bills cannot be changed without challenging the classification. - The applicant cited the case of Priya Blue Industries v. CC, where the Supreme Court held that the assessee is not entitled to a refund without challenging the assessment made in the bill of entry. - The Government observed that in the case of export goods under drawback claims, the classification is not examined from the drawback angle while finalizing the assessment of the shipping bill. The Assistant Commissioner of Customs (Drawback) must sanction the drawback claim in accordance with the relevant statutory provisions, making it necessary to determine the correct classification at his level. 4. Interpretation of Relevant Headings and Explanatory Notes: - The Government referred to the HSN Explanatory Notes and the specific descriptions in the Drawback Schedule to determine the correct classification. - Heading 85.35 refers to electrical apparatus for switching or protecting electrical circuits, while Heading 85.37 refers to boards, panels, consoles, desks, cabinets, and other bases equipped with two or more apparatus of Heading 85.35 or 85.36. - The Commissioner (Appeals) observed that a single apparatus performing the function of electric control or distribution remains classified under Heading 85.35, even if mounted on a base or in a housing. - The Government agreed with the findings of the Commissioner (Appeals), noting that the SF6 Circuit Breakers are specifically mentioned in Heading 8535.21 in the Drawback Schedule and should be classified under Heading 85.35. Conclusion: - The Government upheld the impugned order-in-appeal, agreeing that the HV switchgear (Circuit breaker SF6) should be classified under Heading 85.35. - The revision application was rejected as devoid of merit, maintaining the lower drawback rates as per the correct classification.
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