2024 (4) TMI 77 - AT - Customs

Classification of imported goods - Sea Squad Swim Seats - Arm Bands - Bio Fuse Fitness Fin - Swimming Goggles - other Headgear of rubber or plastics - Fabric hats - to be classifiable under CTH 9506/9004/6505/6506 respectively or otherwise? - benefit of Customs N/N. 12/2012-Sl. No. 503 and C.Ex. N/N. 1/2011-Sl. No. 126 and Customs N/N. 21/2012-Sl. No. 1 with effective rate of duty (BCD-Nil CVD-6%) - HELD THAT - CTH 95062900 covers any item as long as they are categorised as water sports equipment. Once the items are accepted as used for swimming, be it for recreation or otherwise in the swimming pool, classification of these items under CTH 95069990 as meant for Outdoor games is not correct. The impugned orders have accepted the fact that the items in question are meant for kids and used for swimming but the finding that they are not used for competition but used for fun and so not classifiable as water sports equipment is not a logical finding. If kids swim for pleasure and not for competition, it does not become an activity other than swimming. Having held that the items under consideration viz. Sea Squad Swim Seats, arm bands and bio fuse fitness fins are meant for kids while swimming and the more specific heading would be 95062900 and not 95069990 which heading covers various outdoor games like boxing, badminton, hockey which are distinguishable from swimming. The impugned orders have erred in classifying Sea Squad Swim Seats, Bio-Fuse Fitness Fin and arm Bands under 95069990 as they were meant for recreation of babies/ kids in relation to swimming and the classification of these items under the category of outdoor games under CTH 95069990 is legally incorrect. CTH 95069990 falls under 950691 which covers Articles and Equipment for general, physical exercise, gymnastic or athletic . Once having agreed that the Swim squad seats, bio fuse fitness fin and arm bands meant for kids to remain afloat in water, it cannot be thereafter held that these items can be classified for use in Outdoor games - Generally, swimming is considered as a sport rather than a game. It does not mean that no game is played in swimming. Water polo is played in water which is considered as a game. Further the items under consideration cannot be used for any of the Outdoor games specifically listed out under 950691. These items can only be used for swimming and so the classification under 95069990 is incorrect - these items are more appropriately classifiable under 95062900. The impugned order in 3rd appeal has erred in classifying Head Gear, Fabric hats and Swimming Goggles under CTH 95069990. Instead goggles are classifiable under 90049090, headgear under 65069100, Fabric hat under 65050090 which are specific headings for these items which has never been disputed by the Department or the Assessee in earlier imports. Accordingly, the head gears, swimming goggles and fabric hats are not classifiable under CTH 95069990. Thus, appropriate classification of Sea Squad Swim Seats, Arm Bands, Tech Paddles, etc., is under CTH 9506 2900 of Customs Tariff Act, 1975 - The impugned order set aside - appeal allowed.

Issues Involved:
1. Classification of imported goods under Customs Tariff Act, 1975.
2. Application of Customs Notification No. 12/2012 and Central Excise Notification No. 1/2011.
3. Interpretation of General Rules of Interpretation for classification.
4. Consistency in classification by the Department.

Summary:

Issue 1: Classification of Imported Goods
The main issue involved in these appeals is the classification of imported Sea Squad Swim Seats, Arm Bands, Bio Fuse Fitness Fin, Swimming Goggles, other Headgear of rubber or plastics, and Fabric hats. The Assessee claimed classification under CTH 95062900, while the Original Adjudicating Authority classified them under CTH 39269099. The lower Appellate Authority reclassified them under CTH 95069990.

Issue 2: Application of Customs Notification No. 12/2012 and Central Excise Notification No. 1/2011
The Assessee claimed the benefit of Customs Notification No. 12/2012-Sl. No. 503 and C.Ex. Notification No. 1/2011-Sl. No. 126, which provide for a nil rate of Basic Customs Duty (BCD) and a reduced rate of Countervailing Duty (CVD). The Original Adjudicating Authority denied these benefits by classifying the goods under CTH 39269099, which attracts higher duties.

Issue 3: Interpretation of General Rules of Interpretation for Classification
The Assessee argued that the items should be classified under CTH 95062900 as they are specific to swimming activities and should not be classified under a more general heading like CTH 95069990 or CTH 39269099. The lower Appellate Authority failed to apply the General Rules of Interpretation correctly, which state that a specific heading should be preferred over a general one.

Issue 4: Consistency in Classification by the Department
The Assessee contended that the Department had previously classified similar items under CTH 95062900 and extended the benefits of relevant notifications. There was no change in the nature of the imported items to justify a different classification.

Judgment:
1. Classification of Imported Goods: The Tribunal held that the appropriate classification for Sea Squad Swim Seats, Arm Bands, and Bio Fuse Fitness Fin is under CTH 95062900, which covers water sports equipment. The classification under CTH 95069990 for "Outdoor games" was deemed incorrect as swimming is considered a water sport, not an outdoor game.

2. Application of Notifications: The Tribunal found that the items qualify for the benefits under Customs Notification No. 12/2012 and Central Excise Notification No. 1/2011, as they are correctly classifiable under CTH 95062900.

3. General Rules of Interpretation: The Tribunal emphasized that the specific heading (CTH 95062900) should be preferred over the general heading (CTH 95069990 or CTH 39269099), aligning with the General Rules of Interpretation.

4. Consistency in Classification: The Tribunal noted that the Department had previously classified similar items under CTH 95062900 and extended the benefits of the notifications, supporting the Assessee's argument for consistency.

Conclusion:
The Tribunal set aside the impugned Orders-in-Appeal Nos. 1601 & 1602/2013 dated 19.11.2013 and No. 1118/2014 dated 30.06.2014. The appeals filed by the importer appellant were allowed with consequential relief, and the appeals filed by the Department were rejected.

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