2024 (10) TMI 837 - AT - Customs

Classification of imported goods - propriety of the revision of the classification in accordance with settled law and procedure and the General Rules for Interpretation of the Import Tariff - HELD THAT - The finding in the impugned order of the goods being separately identifiable should have been followed by determination of the corresponding description in the First Schedule the Customs Tariff Act, 1975 instead of treating it as one article of a composite good. Overlooking this, the lower authorities have relied upon purported common parlance derived from purported consumer behaviour which is neither common parlance nor derived from any acceptable study of the marketplace. Common parlance is, at best, a mechanism for resolving ambiguity of description that impedes fitment within the tariff lines in the First Schedule to the Customs Tariff Act, 1975. It is not a substitute for determination of the appropriate tariff item which, however, does not appear to have weighed with the first appellate authority. As the exercise in classification has not been correctly carried out, we have no hesitation in holding that the impugned order is not consistent with law - as enacted and judicially determined. It would, therefore, be appropriate for the matter to be remitted to the original authority for a fresh decision - Appeal allowed by way of remand.

Summary

Issues:
Classification of imported goods under Customs Tariff Act, 1975.

Detailed Analysis:
The judgment pertains to the classification of imported goods, specifically 'low noise blocker (LNB),' by M/s Dish TV India Ltd. The dispute arose when the adjudicating authority determined a differential duty under section 28 of the Customs Act, 1962, based on their opinion that the goods should be classified under a different tariff item. The Commissioner of Customs, Central Excise & GST (Appeals) upheld this decision, leading to the appeal before the Appellate Tribunal CESTAT MUMBAI.

The main issue for consideration was the propriety of the revision of classification in accordance with the General Rules for Interpretation of the Import Tariff. The appellant challenged the re-assessment of the classification, arguing that the earlier order should have been considered as a judicial precedent. The first appellate authority's decision was influenced by findings related to a similar dispute, where the classification was altered based on observations regarding the nature and use of the imported goods.

The Tribunal highlighted the importance of correctly determining the classification of goods according to the terms of headings and chapter notes, rather than relying solely on common parlance or consumer behavior. The judgment emphasized that workability or functionality should not be the sole criteria for classification and that the onus is on the proper officer to establish the correctness of the proposed classification in line with the General Rules for Interpretation of the Import Tariff.

The Tribunal found that the lower authorities had not correctly carried out the classification exercise and had erred in relying on common parlance without proper substantiation. As a result, the impugned order was deemed inconsistent with the law and judicial precedents. Consequently, the appeal was allowed by way of remand, directing the matter to be reconsidered by the original authority in accordance with the stipulated rules and guidelines.

In conclusion, the judgment underscores the significance of adhering to the prescribed rules for classification under the Customs Tariff Act, 1975 and emphasizes the need for a thorough and accurate assessment based on legal provisions rather than subjective interpretations or consumer perceptions.