1993 (6) TMI 98 - CGOVT - Customs

Summary

Issues:
1. Review of order-in-appeal by the Central Government.
2. Classification of exported goods (laces) under the drawback schedule.
3. Interpretation of 'made-up articles' under the Central Excise Tariff.
4. Consideration of relevant tariff provisions for classification of goods.
5. Application of Circular No. 15/77 and Note 6 of Section XI to the explanatory notes to B.T.N.

The judgment involves a review proposal initiated by the Central Government concerning the classification of exported goods (laces) under the drawback schedule. The Collector of Customs (Judicial), Bombay proposed the review of order-in-appeal No. 963/91-BCH passed by the Collector of Customs (Appeals), Bombay. The respondents argued that the laces were covered by the term 'made-up' and should be classified under sub-serial No. 2702(5) of the drawback schedule based on Circular No. 15/77. They contended that the review application by the Collector was time-barred and that once goods were allowed for export under a claim of drawback, the claim could not be rejected subsequently.

The Central Government analyzed the case, noting that the revision application by the Collector was technically time-barred but could be initiated suo motu under Section 129DD(4) of the Customs Act. The Government agreed that the reference to a different sub-serial number by the Collector was irrelevant and that allowing goods for export under a drawback claim did not automatically entitle the exporter to the claim. The key issue was whether laces of running length qualified as 'made-up articles' under sub-serial No. 2702(5) of the drawback schedule.

The Central Government found that laces did not meet the definition of 'made-up articles' under the Central Excise Tariff as they were not ready for specific end use. Despite considerations in other contexts, such as grant of CCS, the goods did not align with the relevant tariff provisions for drawback classification. The judgment emphasized that laces required additional processing, such as stitching and joining with other materials, before being ready for use, distinguishing them from items like dusters or towels. The impugned order-in-appeal was deemed legally flawed, and the Assistant Collector's orders were reinstated under Section 129DD of the Customs Act.

In conclusion, the review proposal succeeded, and the judgment clarified the classification of laces under the drawback schedule, emphasizing the importance of aligning goods with the definitions provided in the relevant tariff provisions for accurate classification and eligibility for drawback claims.