2020 (3) TMI 669 - CGOVT - Customs

Classification of imported goods - Sputtering Targets - whether classified under Central Excise Tariff Heading 8543 or under 7115? - Duty Drawback - HELD THAT - Section Notes and Chapter Notes of Schedule to Customs Tariff Act, 1975 are in line with the General Rules for the Interpretation of the Harmonized System of Nomenclature. Therefore a combined reading of Rule 3(a) of HSN and Chapter Note 1(b) of Chapter 71 of the Schedule to the Customs Tariff Act (CTH), 1975 makes it clear that the impugned items merit classification under Chapter 71 - Although a notification cannot decide the classification of an item it is observed that silver sputtering target have been mentioned under Chapter 71 under Notification No. 8/2003-Customs, dated 13-1-2003 by C.B.I. C. Apex Court in PANKAJ JAIN AGENCIES VERSUS UNION OF INDIA 1994 (7) TMI 89 - SUPREME COURT has held that Machinery parts not specifically described in a heading of Customs Tariff Act, 1975/Central Excise Tariff Act, 1985 do not for that reason become excluded from levy of statutory duty. Such parts to be classified in an appropriate heading by applying relevant Section Notes and Chapter Notes - Therefore the impugned goods will fall under Chapter 71 of Schedule to CTA, 1975 in light of the above judgment of the Apex Court. The Government does not find any deficiency in the Commissioner (Appeals) s order - revision application dismissed.

Summary

Issues:
Classification dispute regarding duty drawback claim under Central Excise Tariff Heading 7115 for 'Sputtering Targets' instead of 8543.

Analysis:
1. The applicant claimed duty drawback under Central Excise Tariff Heading 7115 for 'Sputtering Targets' but classified them under 8543. The revision application challenged the rejection of the drawback claim and sought its sanction under 8543.
2. Despite multiple personal hearing dates, the applicant failed to appear initially but later presented arguments relying on Chapter Note 1(b) of Chapter 71 of CE Tariff Act, 1985 and Chapter Note 3(k) to support classification under 8543. Documents from international authorities and customs rulings were submitted to justify the classification.
3. The applicant cited the Supreme Court judgment in Pankaj Jain Agencies v. UOI to argue that machinery parts not specifically described in a tariff heading do not become excluded from levy of duty, advocating for classification under Chapter 85 for 'Sputtering Targets.'
4. The Commissioner (Appeals) upheld the rejection of the drawback claim, considering the nature of the goods as consumables with independent identity, not forming part of the machine under Chapter 85. No new evidence contradicting this observation was presented by the applicant.
5. Rule 3(a) of the General Rules for Interpretation of the Harmonized System of Nomenclature and Chapter Note 1(b) of Chapter 71 of the Customs Tariff Act were cited to support classification under Chapter 71 for the impugned goods. The Apex Court's ruling in Pankaj Jain Agencies v. UOI was referenced to affirm the classification under Chapter 71.
6. The Government, after reviewing all relevant records and the Commissioner (Appeals)'s order, concluded that the impugned goods merit classification under Chapter 71, rejecting the applicant's revision application due to the absence of deficiencies in the Commissioner (Appeals)'s decision.