2017 (7) TMI 630 - AT - Customs

Classification of imported goods - sandalwood pieces of Tanzania Origin - classified under CTH 121190 or under CTH 44039922/440300? - Held that - it clearly emerges that the exclusion therein will affect only those types of wood, which are in form of chips, shavings, or crushed, ground, powdered etc., and further, of a kind used primarily in perfumery, etc. Discernibly, the purpose of the Chapter note is to take out from the ambit of chapter 44, only such types of wood which are used primarily for perfumery, when presented in a ready to use raw material form, as chips, shavings, ground, crushed, etc. This certainly is not the case with respect to the impugned goods - the impugned goods would then not be hit by the exclusion contained in Chapter Note 1(a) of Chapter 44. In consequence, they would continue to be classified in Chapter 44 only - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported sandalwood pieces under Chapter Sub-heading 44039922/440300 or CTH 12119050

Issue 1: Classification of imported sandalwood pieces
The case involved the classification of imported sandalwood pieces of Tanzania Origin packed in 50 Kg. jute bags under Chapter Sub-heading 44039922/440300 or CTH 12119050. The Department contended that the goods were primarily used in perfumery, thus falling under CTH 121190. The Original Authority classified the goods under CTH 12119050, which was upheld by the Commissioner (Appeals).

Analysis: The Appellate Tribunal analyzed the Chapter Note 1(a) in Chapter 44, which excludes wood used primarily in perfumery in certain forms from Chapter 44. The Tribunal noted that the imported goods were cut pieces of sandalwood in irregular shapes, with varying weights and sizes, not falling under the specific forms mentioned in the exclusion. The Tribunal found that the goods did not meet the criteria specified in the Chapter Note for exclusion from Chapter 44. Therefore, the Tribunal concluded that the imported goods should be classified under Chapter 44 and not under CTH 12119050, as determined by the lower authorities. The Tribunal allowed the appeals filed by the appellants, granting them consequential reliefs.

Issue 2: Arguments presented by the parties
During the hearing, the appellant's advocate argued that the imported goods were solely sandalwood, distinct in weight and mass, and should not be classified as sandalwood chips and dust. The advocate highlighted that customs authorities in Mumbai and Hyderabad had previously cleared identical goods under a different heading, which was not considered by the lower authorities. On the other hand, the Departmental Representative supported the impugned order, providing extracts of Chapter Notes to Customs Tariff entries Chapter 12 & 44 to justify the classification under CTH 12119050.

Analysis: The Tribunal considered the arguments presented by both sides. The appellant's advocate emphasized the specific characteristics of the imported goods, while the Departmental Representative relied on Chapter Notes to support the classification under CTH 12119050. However, the Tribunal's analysis focused on the actual nature of the imported goods and their alignment with the criteria specified in the Chapter Note for exclusion from Chapter 44, ultimately leading to a different classification decision.

In conclusion, the Appellate Tribunal, in a detailed analysis, overturned the classification of imported sandalwood pieces under CTH 12119050 and ruled in favor of the appellants, allowing the appeals and granting any consequential reliefs deemed necessary.