2008 (7) TMI 289 - AT - Customs

Classification - men s long sleeve shirt with tie Shirt and Tie, both have separate and distinct identity and separate characteristics and use and are specified in different headings in the Customs Tariff Act - both the items have to be classified accordingly under their respective headings i.e. u/h 6205 and 6215 Commissioner (Appeals) has wrongly considered both the items as Shirt by misinterpreting the terms essential character of set - impugned order is set aside

Summary

Issues: Classification of goods under Customs Tariff Heading, Interpretation of Rules for classification, Benefit of Notification 105/99, Applicability of case laws

Classification of Goods under Customs Tariff Heading:
The appeal concerns the classification of goods imported by M/s. Siyaram Silk Mills Ltd. Mumbai, comprising men's long sleeve shirts with ties. The goods were claimed to be of Bangladesh origin and classified under Customs Tariff Heading (CTH) 6205. The lower authority denied the benefit of Notification 105/99 and issued an order-in-assessment. The Commissioner (Appeals) set aside this order, classifying the shirts under CTH 6205.20 based on the essential character of the goods. The Tribunal found that the shirts and ties are normally offered for sale separately, thus should be classified under their respective headings, CTH 6205 and 6215. The Commissioner (Appeals) erred in adopting Rule 3(b) for interpretation, which was deemed inapplicable.

Interpretation of Rules for Classification:
The Tribunal analyzed Rule 3(b) of the General Rules for Interpretation of the Schedule, emphasizing that goods made up of different components are normally offered for sale separately. The Tribunal disagreed with the Commissioner (Appeals) on the application of Rule 3(b) and found that shirts and ties retain their individual identities, not merging into a single entity. The Tribunal highlighted Note (X) of Rule 3(b), stating that each item should be classified separately in its appropriate heading, which was deemed applicable to the importer's case. The Commissioner (Appeals) misinterpreted the 'essential character of set,' considering both items as shirts, leading to an incorrect classification.

Benefit of Notification 105/99:
The extension of the benefit of Notification 105/99 was a crucial aspect of the case. The Commissioner (Appeals) held that the country of origin certificate issued aligned with the guidelines, preventing the lower authority from looking into the criteria provided in the Rules. However, the Tribunal focused on the proper classification of goods under the Customs Tariff Act, emphasizing the separate identities and classifications of shirts and ties under CTH 6205 and 6215, respectively.

Applicability of Case Laws:
Both parties relied on various case laws to support their arguments. The Revenue cited Soni Chemicals and Gujarat State Fertilizers cases, emphasizing the classification based on Chapter headings and relevant notes. In contrast, the importer referred to the Future Innovations Pvt. Ltd. case, which dealt with the classification of combined products. The Tribunal found the case laws cited by the Revenue applicable to the present situation, reinforcing the separate classification of goods based on Chapter headings and distinct identities of shirts and ties.

In conclusion, the Tribunal allowed the appeal filed by the Revenue, setting aside the Commissioner (Appeals) order regarding the classification of goods. The judgment focused on the proper interpretation of classification rules, the distinct identities of goods, and the applicability of relevant case laws to determine the correct classification under the Customs Tariff Heading.