2006 (5) TMI 9 - AT - Central Excise

Central Excise Motorized toys Conflict between galloping horse and talking parrot Classification

Summary

Issues:
Classification of motorized "galloping horse" toy and motorized "talking parrot" toy under ITC (HS) Headings 950380.00 and 950349.09 respectively.

Analysis:
1. The conflict arose between two decisions regarding the classification of motorized toys. One decision classified the motorized "galloping horse" toy under Heading 950380.00, while the other classified the motorized "talking parrot" toy under Heading 950349.09.

2. The Additional Commissioner of Customs ordered confiscation of motorized "talking parrots" for being restricted items without a valid license. The importers argued that the toy should be classified under Heading 950380.01 due to the motor, but the Commissioner (Appeals) classified it under Heading 950380.01 as it was more specific.

3. The "talking parrot" toy had a plastic body with a mechanism inside, including a motor controlled by dry batteries. The toy's movements were controlled by the motor, demonstrating specific features.

4. Importers argued that toys with motors should be under Heading 950380.01, while stuffed toys without motors should be under Heading 950341.06, demonstrated with a sample toy.

5. In a similar case, the Division Bench held that motorized toys should not be automatically classified under the broad heading of "Other toys and models incorporating motor" but rather under specific headings based on characteristics.

6. Previous decisions classified motorized toys under the residuary heading 950380.01, but the Revenue contended for a different classification.

7. Both the "galloping horse" and "talking parrot" toys were classified as "toys representing animals or non-human creatures."

8. Detailed analysis of Chapter 95 of the Tariff Act and the specific sub-headings for toys, including those with motors, emphasizing the need for specific classification based on characteristics.

9. The Exim Code specified sub-headings for toys representing animals, with restrictions on certain types, indicating the need for accurate classification.

10. The motorized "talking parrot" toy, being made of plastic covered by fabric, fell under the category of "others" under sub-heading 950349.09, not 950380.01, as per the Tribunal's decision.

11. The Tribunal overruled the earlier decision and upheld the classification of the "talking parrot" toy under sub-heading 950349.09, resolving the conflict. The appeal was to be decided based on this judgment.