1988 (12) TMI 272 - HC - Customs

Summary

Issues: Interpretation of fiscal statute regarding classification of blanched and roasted peanuts under Export Tariff Heading No. 20.

In this judgment, the High Court of Madras considered four appeals arising from a common order regarding the classification of blanched and roasted peanuts under the Export Tariff. The main issue revolved around the interpretation of the term "groundnut" in Heading No. 20 of the Second Schedule - Export Tariff, specifically whether blanched and roasted peanuts fell under this category. The Revenue appealed the decision of the lower court, which held that blanched and roasted peanuts did not fall under Heading No. 20(i) of the Export Tariff.

The court noted that the respondents had exported blanched and roasted peanuts and were subjected to export duty under Heading No. 20(i) of the Export Tariff. The appellants argued that blanched and roasted groundnut should be considered as falling under the term "groundnut kernel" in Heading No. 20. They contended that the term "groundnut kernel" should encompass not only raw groundnut kernel but also blanched and roasted peanuts. However, the court agreed with the lower court's interpretation that blanched and roasted peanuts were distinct from groundnut kernels used for oil extraction and other purposes, primarily intended for direct consumption.

The court emphasized the importance of considering the functional character of the product in determining its classification, citing previous judgments that highlighted the association between an article and its primary function. The court rejected the department's argument that groundnut kernel should include blanched and roasted peanuts based on analogies with coffee and tea classifications, emphasizing the difference in primary functions between groundnut kernels and blanched roasted peanuts. The court concurred with the lower court's reasoning and conclusion, dismissing the appeals and ruling in favor of the respondents.

In conclusion, the High Court of Madras upheld the lower court's decision regarding the classification of blanched and roasted peanuts under the Export Tariff. The court rejected the department's argument and affirmed that blanched and roasted peanuts did not fall under Heading No. 20(i) of the Export Tariff. The appeals were dismissed, and no costs were awarded in the case.