2022 (2) TMI 259 - AT - Customs

Classification of goods - hook and eye for brassieres - whether classified under CTH 83081010 as claimed by the appellant or under CTH 62129090 as part of brassieres as arrived at by the assessing officer? - HELD THAT - HSN 8308 clarifies that articles referred to in (A), i.e., hooks, eyes and eyelets may also contain parts of leather, textiles, plastics wood, horn; bone, ebonite, mother of pearl, ivory, imitation precious stones, etc., provided they retain the essential character of articles of base metal; They may also be ornamented by working of the metal. Having seen the sample of the article and having gone in to the notes of HSN, it is found that the impugned goods should fall under the specific heading i.e. CTH 83081010. The Tribunal, in the case of M/s Ajay Kumar 2019 (1) TMI 919 - CESTAT NEW DELHI , has gone in to the case in detail and held the classification under CTH 83081010 to be correct. Tribunal has considered the Chapter notes, HSN notes and international nomenclature and have held that the Hooks and eye do not lose the essential character of being articles of base metal even when attached to the piece of cloth and in terms of HSN explanatory notes it is rightly classifiable under CTH 83081010. Apex Court, high Courts and this tribunal held in a plethora of cases that HSN and the explanatory notes have a persuasive effect. Also, the international classification becomes relevant to know the trade practice of classification and to know as to how the impugned product is known in the commercial or common man s parlance. The appellants have successfully demonstrated that the import documents describe the product to be Hooks and eye for the Brassieres; other importers are also claiming the classification under the same heading. Such overwhelming evidence cannot be overlooked - the impugned goods are rightly classifiable CTH 83081010. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of imported hook and eye for brassieres.
2. Applicability of Rule 3(a) of General Rules for Interpretation of First Schedule to Import Tariff.
3. Relevance of previous case laws and HSN explanatory notes.
4. Impact of classification on duty payable and commercial viability.

Detailed Analysis:

1. Classification of Imported Hook and Eye for Brassieres:
The core issue revolves around whether the imported hook and eye for brassieres should be classified under CTH 83081010 or CTH 62129090. The appellant argued that the hook and eye should be classified under CTH 83081010, which specifically covers hooks, eyes, and eyelets. The Commissioner (Appeals) had upheld the classification under CTH 62129090, treating them as parts of brassieres.

2. Applicability of Rule 3(a) of General Rules for Interpretation of First Schedule to Import Tariff:
The appellant emphasized Rule 3(a), which states that a specific heading should be preferred over a general one. They argued that CTH 83081010 is more specific compared to the generic nature of CTH 62129090. This rule was supported by several case laws, including Tamil Nadu Newsprint and Papers Ltd. Vs. Appraiser, Moorco (India) Ltd. Vs. CC, Ascent Meditech Ltd. Vs. CC, and Zymonutrients Pvt. Ltd. Vs. CC.

3. Relevance of Previous Case Laws and HSN Explanatory Notes:
The appellant cited the CESTAT, New Delhi decision in Ajay Kumar Vs. Commissioner of Central Excise, which held that hook and eye are correctly classifiable under CTH 83081010. This decision was distinguished from the earlier Gosai Trading Co. case, which was deemed per incuriam for not considering various aspects. The HSN explanatory notes for Chapter 8308 were extensively discussed, affirming that hooks and eyes retain their classification under CTH 83081010 even when attached to cloth.

4. Impact of Classification on Duty Payable and Commercial Viability:
The appellant argued that classifying the items under CTH 62129090 would significantly increase the duty payable, making the landed cost of the hook and eye higher than the final product's price. This would adversely affect the commercial viability of the final product, a point ignored by the Commissioner.

Conclusion:
The tribunal, after hearing both sides and reviewing the records, concluded that the impugned goods should be classified under CTH 83081010. They noted that the HSN explanatory notes support this classification and that the hook and eye retain their essential character as articles of base metal. The tribunal also considered international conventions and trade practices, further supporting the appellant's classification. Consequently, the tribunal set aside the impugned orders and allowed the appeals, granting consequential relief as per law.