1991 (3) TMI 263 - AT - Customs

Summary

Issues Involved:
1. Classification of 'Snap Fasteners' under the Customs Tariff.
2. Eligibility of 'Snap Fasteners' for concessional duty under Notification No. 224/85-Cus.
3. Interpretation of the term "Metallic Embellishment" in the context of the Notification.
4. Applicability of subsequent amendments to the Notification.

Issue-Wise Detailed Analysis:

1. Classification of 'Snap Fasteners' under the Customs Tariff:
The respondents imported consignments of Snap Fasteners, which were assessed to duty under heading 9606.10 CTA, 1975 at 100% plus 40% with C.V. duty under Tariff Item 68. They later sought assessment under Serial No. 10 of Notification No. 224/85-Cus as "Metallic Embellishment." The Assistant Collector rejected this claim, stating that Snap Fasteners do not qualify as "Metallic Embellishment."

2. Eligibility of 'Snap Fasteners' for Concessional Duty under Notification No. 224/85-Cus:
The respondents argued that the Snap Fasteners should be assessed under the concessional rate of duty as "Metallic Embellishment" per Notification No. 224/85-Cus. The Assistant Collector disagreed, finding that Snap Fasteners serve only a functional purpose of opening and closing, lacking any quality of beautification or attractiveness necessary to be considered as "Metallic Embellishment."

3. Interpretation of the Term "Metallic Embellishment":
The appellants argued that the term "Metallic Embellishment" is not defined in the Customs Tariff Act or the Notification, necessitating a dictionary-based interpretation. The Assistant Collector and the Tribunal relied on the definitions from various dictionaries, concluding that "Metallic Embellishment" implies items that add attractiveness or decoration, which Snap Fasteners do not. The Tribunal also referenced the case of Ashish & Co. v. Collector of Customs, which held that embellishment involves a positive act of beautification.

4. Applicability of Subsequent Amendments to the Notification:
The appellants contended that the amendment to Notification No. 224/85-Cus by Notification No. 97/87-Cus, which specified items qualifying for the benefit, should be considered clarificatory and indicative of the original intent to exclude Snap Fasteners. The respondents countered that the amendment could not be applied retrospectively to their import in October 1986. The Tribunal found the Assistant Collector's interpretation consistent with the Tribunal's earlier decision in Ashish & Co., rejecting the Collector (Appeals)'s reasoning that Snap Fasteners could be considered decorative.

Conclusion:
The Tribunal allowed both appeals, setting aside the impugned Order-in-Appeal and restoring the original Orders-in-Original by the Assistant Collector. The Tribunal held that Snap Fasteners do not qualify as "Metallic Embellishment" under Notification No. 224/85-Cus, aligning with the precedent set in Ashish & Co. v. Collector of Customs.