2017 (2) TMI 370 - AT - Central Excise

Classification of imported goods - Solubor which is Sodium Borate classified under chapter heading 3105 of the Central Excise Tariff Act, 1985 - classifiable under 2840 or under 3105? - Held that - only because the Customs has classified the goods under Chapter heading 3105 it will not be binding on the Central Excise classification. The classification of the Central Excise has to be decided by taking into consideration the actual nature of the goods - the Ld. Commissioner (Appeals) is supposed to decide the classification of Solubor under Central Excise Tariff Act without getting influenced by the classification decided by the Customs authority in case of import of the goods - appeal allowed by way of remand.

Summary

Issues:
1. Classification of imported goods under Central Excise Tariff Act, 1985.
2. Whether repacking of goods amounts to manufacture.
3. Binding nature of Customs classification on Central Excise classification.

Analysis:
1. The appeal involved a dispute regarding the classification of imported 'Solubor' under the Central Excise Tariff Act, 1985. The appellant imported Sodium Borate classified under chapter heading 3105 but repacked and sold it as fertilizer. The original authority held that the goods were correctly classifiable under chapter 2840, considering repacking as manufacturing, thus imposing duty. However, the Commissioner (Appeals) disagreed, citing the initial classification under chapter 3105 in the bill of entry by Customs, which, according to them, prevented a review by Central Excise officers.

2. The Assistant Commissioner for the Revenue argued that Customs and Central Excise assessments differ, emphasizing that the product should be classified under chapter 2840, with repacking constituting manufacturing under chapter 28. On the contrary, the respondent's counsel contended that once goods are classified under a chapter, it cannot be changed for excise purposes. They argued that goods cleared after repacking from chapter 3105 are non-manufactured and not dutiable.

3. The Tribunal noted that Customs classification does not bind Central Excise classification, emphasizing the need to determine the goods' actual nature for proper classification. While the Revenue claimed chapter 2840 classification, the Commissioner (Appeals) solely relied on the initial Customs classification under chapter 3105. The Tribunal held that the Commissioner should decide the classification based on the goods' nature without being influenced by Customs classification. Consequently, the matter was remanded to the Commissioner (Appeals) for a fresh decision, allowing the appeals due to this procedural error.

This judgment clarifies the distinction between Customs and Central Excise classifications, highlighting the importance of determining classification based on the goods' nature rather than past Customs classifications.