2019 (11) TMI 1505 - CGOVT - Customs

Classification of imported goods - Human hair, double drawn washed cleaned well dressed - Classifiable under RITC 05010010 or RITC 6703? - Power of Commissioner (Appeals) to remand the case back to the original authority is concerned - HELD THAT - It is on record that the description of the goods remained the same during the entire period i.e. prior to September, 2011, between September, 2011 to December, 2012 (12-12-2012) and after 12-12-2012. However, the respondent has been changing the classification of goods from time to time so as to avail benefit of export incentives scheme available to them from time to time. This fact has been admitted by the respondent in their letter dated 13-2-2013 addressed to Dy. Commissioner, Export Commissionerate, Air Cargo, New Customs House, New Delhi-110037. From the plain reading of the the headings, Chapter 0501 and Chapter 6703, it is observed that the main difference between the classification of the human hair in respective above-mentioned headings is the dressing of the hair or otherwise worked . It is also on record and also admitted by the respondent themselves that the impugned goods i.e. human hair are dressed. In all these cases the human hair were declared as dressed by respondent himself on the export documents. Once the human hair are dressed these automatically fall under RITC 6703 and not under 0501. It is also on record that the Director of the M/s. DCS International has himself accepted in his statement dated 30-5-2013 before the Customs authorities that they had inadvertently claimed drawback against the impugned Shipping bills since they had worked on human hair which were exported. Test from the CSFL laboratory also confirm that the human hair are worked and hence rightly classifiable under RITC 6703. Thus the contention of the Commissioner (Appeals) that classification of the impugned export goods prior to 2012 cannot be challenged as there were no samples drawn from the respective consignments is not tenable. Power of Commissioner (Appeals) to remand the case back to the original authority is concerned - HELD THAT - The remand powers of Commissioner (Appeals) stands withdrawn with effect from 11-5-2001 vide Finance Act of 2001 - Hence Commissioner (Appeals) has been authorized to act as an Adjudicating Authority and is obliged to pass necessary orders if it is found that the original Adjudicating Authority has passed an order which is not legal and proper. Accordingly Commissioner (Appeals) is directed to decide the classification in respect of sixteen Shipping bills on merits which were remanded back to adjudicating authority. The impugned export goods are rightly classifiable under RITC 6703. The order of adjudicating authority in respect of 114 Shipping Bills filed prior to 12-12-2012 is upheld. As regards the balance 16 Shipping Bills Commissioner (Appeals) order, Revision Application is allowed by way of remand to the Commissioner (Appeals) for final disposal.

Summary

Issues:
1. Classification of goods under RITC 05010010 or RITC 6703.
2. Applicability of remand powers of Commissioner (Appeals).
3. Timeliness of the revision application.
4. Correct course of action for challenging classification of goods.

Detailed Analysis:

1. Classification of Goods:
The main issue in this case was the classification of goods under RITC 05010010 or RITC 6703. The respondent had been changing the classification of goods to avail export incentives schemes. The human hair exported were found to be 'worked' and dressed, falling under RITC 6703. The respondent's own documents and statements confirmed this classification. The government upheld the classification under RITC 6703 for 114 Shipping Bills filed prior to 12-12-2012.

2. Remand Powers of Commissioner (Appeals):
The Commissioner (Appeals) remanded the case back to the adjudicating authority for 16 Shipping Bills, which was challenged by the applicant citing a Supreme Court judgment. The government clarified that the remand powers of Commissioner (Appeals) were withdrawn in 2001, and the Commissioner (Appeals) acts as an Adjudicating Authority. The Commissioner (Appeals) was directed to decide the classification for the 16 Shipping Bills on merits.

3. Timeliness of Revision Application:
The respondent argued that the revision application was time-barred. The government found that the delay in filing the revision application was due to filing an appeal in CESTAT, which was a bona fide mistake. The delay was condoned under Section 129DD(2) of the Customs Act, 1962.

4. Correct Course of Action:
The respondent contended that a Show Cause Notice for recovery of erroneously paid drawback was not the correct course of action. The government noted that this issue was not raised before the Commissioner (Appeals), and there were no findings on this aspect in the Order-in-Appeal.

In conclusion, the government set aside the Commissioner (Appeals) order and upheld the classification under RITC 6703 for 114 Shipping Bills. The case was remanded back to the Commissioner (Appeals) for final disposal regarding the 16 Shipping Bills.