2004 (2) TMI 192 - AT - Customs

Summary

Issues:
Classification of vacuum cleaners imported under Bills of Entry, Confiscation of goods, Redemption fine, Penalty imposition, Application of Supreme Court decision in Nat Steel Equipment Private Ltd. case, Classification under Chapter Heading 8479.89 or 85.09, Evidence of earlier classification under 8479.89.

Classification of Vacuum Cleaners:
The appeal challenged the classification of vacuum cleaners imported by the appellant under Bills of Entry. The appellant classified them under sub-heading 8479.89 as Machines and mechanical appliances, while customs authorities sought to classify them under 85.09 as Electro-mechanical domestic appliances. The adjudicating authority and appellate authority rejected the appellant's claim that the vacuum cleaners were industrial and should fall under 8479.89. The authorities ordered confiscation of goods, imposed a redemption fine of Rs. 4,50,000, and a penalty of Rs. 50,000 under Section 112 of the Customs Act. The Commissioner (Appeals) upheld the classification and confiscation.

Application of Supreme Court Decision:
The appellant argued that the vacuum cleaners were of higher capacity and had special features for industrial use. They contended that the Commissioner wrongly applied the Supreme Court decision in Nat Steel Equipment Private Ltd. case. The appellant believed the correct classification was under Chapter Heading 8479.89 and not requiring an import license. They cited two Tribunal decisions to support their contention.

Interpretation of Domestic Electrical Appliances:
The Tribunal discussed the Supreme Court decision in Nat Steel Equipment Private Ltd. case and the interpretation of domestic electrical appliances. The decision clarified that an item need not be used only in homes to be classified as a domestic electrical appliance; it should be generally used for household purposes. Reference was made to a Gujarat High Court decision to support this interpretation.

Classification and Evidence of Earlier Imports:
The Tribunal analyzed the HSN Explanatory Notes and the goods' catalogue to determine the classification. They agreed with the Commissioner (Appeals) that the goods did not meet the criteria to be classified under Chapter Heading 8479. The Tribunal acknowledged the appellant's argument that if similar goods were previously classified under 8479.89 for home consumption, then confiscation and penalties would not be justified. However, the Tribunal found no evidence of such previous imports.

Decision and Remand:
The Tribunal affirmed the classification under 85.09 but remanded the matter to the adjudicating authority to investigate if identical goods were previously imported and classified under 8479.89. The appellant was given the opportunity to provide relevant evidence to support their claim. The appeal was disposed of with this direction.