2014 (8) TMI 282 - AT - Customs

Classification of goods - whether the imported goods described as raw jute (BWCB/BTCA) in the respective Bills of entry are classifiable under chapter subheading 530310.10 or under chapter subheading 530390.10 of the Customs Tariff Act, 1975 and consequently eligible to the benefit of Notification 21/02-Cus dated 01.03.2002 read with SAPTA Notification no. 105/99 Cus dated 08.10.2005 - Held that - Sub-heading 53.03 of CTA,1975 broadly enumerates the items, that is, jute and other textile based fibers in raw stage or processed ones; also the waste generated. To explain the said heading, the Explanatory Notes under the HSN are also designed accordingly, mentioning the items that are covered under the said heading. Under the 1st category, of the quoted explanation different types of raw fibers are considered, under category II the processed goods are covered and under category III, waste materials of the fibers have been included. The meaning of cuttings appears under category I and it is referred in the contest while explaining different types of raw fibers that are covered under the said sub-heading. It is explained to mean the butt-ends of the fibers which are cut off and marketed separately - it is clear that the raw jute cuttings are of different grades and are available in the market. It supports the contention of the Appellant that what they have imported are raw jute cuttings of different grades. No contrary evidence has been produced by the Revenue to establish that what the Appellant had imported, were not raw jute of cutting grades, but processed jute cuttings . Under the re-structured eight digit new tariff entry, the raw jute of cutting grades are not classifiable under CSH 53039010, as the jute cuttings mentioned in the said entry does not refer to raw jute of cutting grade. On the other hand, in view of the items covered under the broad heading 53.03, along with the explanation of inclusion of various items covered under the said heading as mentioned in the HSN, undoubtedly, the inference goes in favour of the assessee that what they had imported, were raw jute of cutting grade and correctly classifiable under sub-heading 53031010 of CTA, 1975. Goods imported by the Appellant, be considered as raw jute of cutting grade, therefore the benefit of the said Notification automatically flows as it continued to be applicable to raw jute only and we do not see any necessity to delve into this aspect as it would be a mere academic exercise - Decided in favour of assessee.

Summary

Issues Involved:
1. Classification of imported goods as 'Raw Jute' or 'Jute Cuttings.'
2. Eligibility for exemption under Notification No. 21/02-Cus. dated 01.03.2002 and Notification No. 105/99-Cus. dated 10.04.1999.
3. Inclusion of freight charges in the assessable value.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue was whether the imported goods described as 'Raw Jute (BWCB/BTCA)' should be classified under Chapter Sub-Heading 530310.10 or 530390.10 of the Customs Tariff Act, 1975. The appellants argued that the goods were 'raw jute of cutting grade,' which should be classified under 530310.10, while the Revenue contended that they were 'jute cuttings' and should be classified under 530390.10. The Tribunal noted that the imported goods were described in invoices as 'raw jute cutting grade' and that the explanation in the Harmonized System of Nomenclature (HSN) referred to 'cuttings' as the butt ends of fibers marketed separately. The Tribunal concluded that the raw jute of cutting grades imported by the appellants should be classified under sub-heading 530310.10, as the 'jute cuttings' mentioned in 530390.10 did not refer to raw jute of cutting grade.

2. Eligibility for Exemption Notifications:
The appellants claimed exemptions under Notification No. 21/02-Cus. dated 01.03.2002 and Notification No. 105/99-Cus. dated 10.04.1999. The Tribunal found that the goods imported by the appellants, being classified as raw jute of cutting grade, were eligible for the benefit of the said notifications. The Tribunal emphasized that the legislative history and the practice of assessment under the old tariff entry supported the classification of the goods under the new eight-digit tariff entry 530310.10, thereby making them eligible for the exemptions.

3. Inclusion of Freight Charges in Assessable Value:
The appellants contended that the Commissioner (Appeals) exceeded the scope of the appeals by remanding the issue of the inclusion of freight charges in the assessable value, which had already been decided in their favor by the adjudicating authority. The Tribunal agreed with the appellants, stating that the remand was unnecessary and bad in law since neither the appellants nor the Revenue had challenged the adjudicating authority's decision on this issue.

Conclusion:
The Tribunal set aside the orders passed by the Commissioner (Appeals) and allowed the appeals with consequential relief. The imported goods were classified under sub-heading 530310.10, making them eligible for the exemption notifications, and the issue of freight charges in the assessable value was not to be reconsidered.