2001 (1) TMI 332 - AT - Customs

Summary

Issues Involved:
1. Classification of Brine Shrimp Eggs.
2. Applicability of Chapter Notes and Rules of Interpretation.
3. Commercial Identification and Use of Imported Goods.
4. Relevance of ITC (HS) Classification.

Summary:

1. Classification of Brine Shrimp Eggs:
The primary issue revolves around whether Brine Shrimp Eggs imported from the USA should be classified under sub-heading 2309.90 or 0511.91 of the Customs Tariff. The Assistant Commissioner initially classified the goods under sub-heading 0511.91, but the Commissioner (Appeals) restored the classification to 2309.90. The Commissioner (Appeals) argued that the goods are prawn feed, which falls under Heading 23.09, as they have lost the essential characteristics of the original material due to processing.

2. Applicability of Chapter Notes and Rules of Interpretation:
The Commissioner (Appeals) cited Chapter Note 1(b) of Chapter 3 and Rule 3(a) of the Rules of Interpretation, stating that fish products unfit for human consumption are classifiable under Chapter 5. The appeal by the revenue argued that the goods are more specifically covered under Heading 05.11, which pertains to products of fish or crustaceans, molluscs, or other aquatic invertebrates. The Tribunal agreed with the revenue, stating that the goods, in their imported condition, are not edible and thus fall under Heading 0511.99.

3. Commercial Identification and Use of Imported Goods:
The Commissioner (Appeals) held that the goods are commercially known as prawn feed and are not fertile eggs for hatching in their natural state. The revenue contested this, arguing that the goods are described as shrimp eggs in commercial invoices and cannot be used as prawn feed in their imported form. The Tribunal found that the goods require significant processing before they can be used as prawn feed, thus supporting the classification under Heading 05.11.

4. Relevance of ITC (HS) Classification:
The Commissioner (Appeals) stated that ITC (HS) Classification is relevant only for licensing purposes and not binding for classification under Customs Tariff. The revenue argued that the ITC (HS) Classification, which is based on the Harmonized System of Nomenclature (HSN), should be considered. The Tribunal did not find it necessary to delve into this argument, as the classification was determined based on the chapter notes and the condition of the goods at the time of import.

Conclusion:
The Tribunal set aside the order of the Commissioner (Appeals) and allowed the appeal of the department, concluding that the Brine Shrimp Eggs should be classified under Heading 0511.99, as they are not edible in their imported condition and require further processing to be used as prawn feed.