2024 (1) TMI 405 - AT - Customs

Change in classification of goods imported - Glass Beads Chatons - It was argued that while glass beads classifiable under Heading 70181020, the chatons are classifiable under heading 70181090 in the category others - HELD THAT - It is apparent that the custom tariff itself was different when decision of Tribunal in the case of M/s. Art Beads Pvt Ltd 2013 (9) TMI 463 - CESTAT MUMBAI was given and the same was the condition when the decision of Hon ble High Court of Bombay was given in the case of M/s Starlite Corporation 1985 (12) TMI 61 - HIGH COURT OF JUDICATURE AT BOMBAY . In both these cases the classification was not being examined under the new custom tariff and in both these cases the explanatory notes given in HSN were not brought to the knowledge of the Courts. In these circumstances, the decisions given in the context of new custom tariff purely relying on the decision of Tribunal in the case of M/s. Art Beads Pvt ltd and that of Hon ble High Court of Bombay in the case of M/s. Starlite Corporation ignoring explanatory notes to the HSN on cannot be relied. In view of clear definition of beads provide in HSN, which is a most reliable guide for the purpose of classification under the custom tariff cannot be ignored. Thus, relying on the definition of the beads given in the HSN notes, it is held that piercing is a necessary requirement for anything to be classified as beads. There is no disputes that the product imported by appellant is not pierced. Therefore, the same cannot be classified as beads. Appeal dismissed.

Summary

Issues Involved:
1. Classification of imported goods as "Glass Beads Chatons" versus "Chatons".
2. Reliance on previous judgments and HSN explanatory notes for classification.

Summary:

Issue 1: Classification of Imported Goods
The appellant, M/s. Asia World Exports, challenged the reclassification of their imported goods from "Glass Beads Chatons" under Heading 70181020 to "Chatons" under Heading 70181090. The appellant argued that the goods, described as conical shaped stones resembling artificial diamonds without any piercing/hole, should be classified as beads. The revenue contended that beads must be pierced and thus classified the goods as chatons.

Issue 2: Reliance on Previous Judgments and HSN Explanatory Notes
The appellant relied on the Tribunal's decision in the case of Art Beads Pvt Ltd, where similar goods were classified as beads, and this decision was not contested by the revenue. They also cited the Supreme Court's decision in the case of M/s. VMB Impex, which upheld the Tribunal's classification. However, the Tribunal noted that these previous decisions did not consider the HSN explanatory notes, which clearly define glass beads as "small pierced balls". The Tribunal emphasized the importance of HSN notes, as highlighted in cases like M/s. Hewlett Packard India Sales Pvt Ltd and M/s. Theremax Ltd, which state that HSN should be a guiding principle for classification disputes.

Given the clear definition of beads in the HSN notes, the Tribunal concluded that piercing is a necessary requirement for classification as beads. Since the imported goods were not pierced, they could not be classified under Heading 70181020 as beads.

Conclusion:
The appeal was dismissed, and the goods were classified as chatons under Heading 70181090. The judgment emphasized the significance of HSN explanatory notes in resolving classification disputes.