1997 (4) TMI 225 - AT - Customs

Summary

Issues: Classification of imported goods under Notification No. 181/87-Customs, whether shuttles are parts of looms or accessories, applicability of circular issued by CBEC, interpretation of HSN notes, consideration of expert certificate, determination of exemption eligibility under Notification No. 181/87-Customs.

In this case, the Appellate Tribunal CEGAT, New Delhi addressed the issue of the classification of imported goods under Notification No. 181/87-Customs. The dispute revolved around whether shuttles should be considered as parts of looms or accessories. The Collector of Customs (Appeals) initially rejected the claim for clearance under the notification, arguing that shuttles are parts of looms classifiable under CTH 98.06. However, the Collector (Appeals) later granted relief, stating that shuttles are accessories, not parts of looms, and therefore eligible for exemption under Notification No. 181/87. The Revenue appealed this decision, contending that shuttles are essential parts of looms and should be classified under CTH 98.06. The Respondents, in cross-objections, argued that the impugned goods are accessories as per the HSN note and CBEC circular, making them eligible for exemption under the notification.

The Revenue argued that shuttles are integral parts of looms as they carry the weft across a loom, making them essential for the weaving process. They contended that shuttles should be classified under CTH 98.06 as parts of looms, not accessories. The Respondents, on the other hand, referred to the HSN note and a CBEC circular to support their claim that shuttles are accessories to auto shuttles and not interchangeable with parts, thus qualifying for exemption under Notification No. 181/87.

The Tribunal considered expert opinions, including a certificate from the Dy. Director in the office of the Textile Commissioner, which stated that shuttles are important accessories but not integral parts of looms. The Tribunal noted that the certificate was not challenged by the Revenue and highlighted criteria for considering accessories under the HSN. Additionally, the Tribunal referenced an Encyclopaedia Britannica passage describing shuttle looms without shuttles, indicating that shuttles may not be essential parts of looms but rather accessories. Ultimately, the Tribunal upheld the Collector (Appeals) decision, concluding that shuttles are accessories, not parts of looms, and therefore eligible for exemption under Notification No. 181/87.

The Tribunal's decision was based on the correct classification of shuttles as accessories under CTH 84.48, in line with the provisions of Notification No. 181/87. By considering expert opinions, HSN notes, and the CBEC circular, the Tribunal determined that shuttles should be treated as accessories rather than integral parts of looms, affirming the exemption eligibility under the notification.