2015 (1) TMI 795 - AT - Customs

Import of Polishing Material viz Stain Lacquer, Patina and Natural Wax - inputs to be used in the manufacture furniture - whether the furniture exported by the appellant would be considered as handicraft or not - Denial of benefit under Notification No. 21/2002-Cus dated 1.3.2002 - Import of goods on payment of Concessional rate of duty as also at NIL rate of duty under Notification No. 21/2002-Cus dated 1.3.2002 - held that - Admittedly respondent have produced the certificate from the Export Promotion Council for Handicrafts, as required in the said notification - Revenue, apart from making a bald statement that such certificates stand issued based upon mis-declaration made by the assessee, has not referred to or relied upon any evidence to substantiate the said allegation. The Notification requires issuance of certificate by the highest body operating in the field of export of handicraft. To allege that the said certificates were wrongly procured is in excess jurisdiction of the Customs, who have not been given any authority by the notification in question the correctness of the EPC certificates. The respondents are registered as manufacturers with the said Export Promotion Council. To allege that such certificates were obtained by mis-declaration, without any evidence, amount to casting suppressions on the said highest body dealing with export of handicraft. Whether furniture exported by the appellant was simple furniture not covered by the definition of handicraft. - Held that - We find that there is no definition of handicrafts available either in the act or under notification. Shri Sandeep Mundra of the Respondent unit, in his statement recorded on 4.10.2005, has categorical by stated that the furniture has visual appeal due to stone inlay, carving etc. and further hand embellishment & hand distressing were work done to make the furniture Artistic which are sold in the International market because of its beauty. We also note that the appellant had imported stone etc. also for use in the exported furniture. On the other hand the revenue has gone by the examination of the furniture by the customs officers, who cannot be held to be experts in the field. There is no expert opinion produced by the customs authorities. On the other hand the fact that the appellant is registered with the export promotion council in handicraft, is indicative of the fact that furniture manufacture by the appellant is handicraft, in which case the benefit of the notification No. 21/2002 would be available to them. - Decided against Revenue.

Summary

Issues involved:
Interpretation of Notification No. 21/2002-Cus for concessional duty on imported raw materials for handicraft furniture manufacturing; Determination of whether the exported furniture qualifies as handicraft; Validity of certificates issued by Export Promotion Council for Handicrafts; Jurisdiction of the department to challenge the validity of certificates; Expert opinion on the nature of the furniture; Applicability of previous tribunal decisions on defining handicraft furniture.

Interpretation of Notification No. 21/2002-Cus:
The appeals revolved around the interpretation of Notification No. 21/2002-Cus regarding the concessional duty on imported raw materials for manufacturing handicraft furniture. The appellant imported Polishing Material for manufacturing furniture for export under this notification. The main dispute was whether the exported furniture constituted handicraft or simple furniture. The Revenue contended that the concessional duty benefit was not applicable as the furniture was not handicraft. However, the appellant fulfilled the conditions of the notification, including producing a certificate from the Export Promotion Council for Handicrafts certifying the value of exports. The Tribunal found that the Revenue's contention lacked evidence and upheld the appellant's compliance with the notification.

Determination of Handicraft Furniture:
The core issue was whether the furniture exported by the appellant qualified as handicraft. While the Revenue argued that it was simple furniture, the appellant maintained it was handicraft due to visual appeal and artistic features like stone inlay and hand embellishment. The Tribunal noted the absence of a legal definition of handicraft and emphasized the appellant's registration with the Export Promotion Council for Handicrafts. The Tribunal dismissed the Revenue's reliance on customs officers' examination, highlighting the lack of expert opinion. The Tribunal concluded that the appellant's furniture manufacturing process aligned with the characteristics of handicraft, making them eligible for the notification's benefits.

Validity of Certificates and Department's Jurisdiction:
The Tribunal addressed the validity of certificates issued by the Export Promotion Council for Handicrafts and the department's jurisdiction to challenge them. The Commissioner (Appeals) emphasized that the department cannot doubt the validity of certificates unless challenged before the issuing authority. The Tribunal cited a previous judgment supporting this position and stressed that as long as valid certificates were held, the benefit of the notification should not be denied. The Tribunal upheld the importance of adhering to the certificate requirements without undue interference from the department regarding their validity.

Expert Opinion and Previous Tribunal Decisions:
The Tribunal considered expert opinions and previous tribunal decisions on defining handicraft furniture. Referring to past cases, the Tribunal highlighted that furniture with artistic features and visual appeal should be considered handicraft. It noted that certificates issued by organizations dealing with handicraft should be accepted as they come from experts in the field. The Tribunal upheld the relevance of expert opinions and previous tribunal decisions in determining whether the exported furniture qualified as handicraft.

In conclusion, the Tribunal rejected the Revenue's appeals after thorough analysis of the issues involving the interpretation of the notification, determination of handicraft furniture, validity of certificates, jurisdiction of the department, expert opinions, and previous tribunal decisions. The judgment emphasized the importance of complying with the notification's conditions, considering expert opinions, and respecting the certificates issued by competent authorities in the field of handicrafts.