2017 (12) TMI 1016 - AT - Central Excise

Classification of goods - synthetic web equipment - appellant claims that the synthetic web equipment supplied by the appellant to Defence and Paramilitary forces were exclusively meant for use by those personnel and such goods are not at all sold in the market and it shall be classifiable under the Tariff heading 63079090 - whether goods classifiable under CETH 6307.9090 or under CETH 4202.1990? - Revenue says that Tribunal has already taken a view to hold that the goods in question would fall in Tariff Heading 4202.1990, in the case of MKU Pvt. Ltd. 2012 (7) TMI 832 - CESTAT NEW DELHI . Held that - When the decision cited by Revenue is read, that does not throw light as to whether common parlance theory was considered by Tribunal to classify the goods following the ratio laid down by the Apex Court in the aforesaid judgments. For non consideration of such principle, the decision of the Tribunal is per incurium and cannot be said to be a precedent on the subject - There is no dispute by Revenue that the goods in question are as per the literature placed on record by the learned counsel and used by military and paramilitary personnel. The goods of the appellant shall fall under Tariff Heading 6307.9090 - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of goods under Tariff Heading 6307.9090 vs. 4202.1990

Issue 1: Classification under Tariff Heading 6307.9090
The appellant argued that the synthetic web equipment supplied to Defence and Paramilitary forces, exclusively for their use, should be classified under Tariff Heading 6307.9090. The appellant demonstrated the goods before the Tribunal, emphasizing that they are not sold in the market. The observation was made that the goods are not commonly bought and sold, which is a primary test for classification. Reference was made to the principle that goods should be classified based on how they are understood in trade and common parlance, as established by the Apex Court. The Tribunal found that the goods presented by the appellant fell under the Tariff Heading 6307.9090, rejecting the Revenue's argument.

Issue 2: Contradiction with Tariff Heading 4202.1990
The Revenue contended that the goods should be classified under Tariff Heading 4202.1990, contradicting the appellant's classification. The Tribunal noted that there was no dispute regarding the nature of the goods as per the literature provided by the appellant, which are used by military and paramilitary personnel. However, the Revenue cited a previous decision involving a different company to support their classification under Tariff Heading 4202.1990. The Tribunal found that the previous decision did not consider the common parlance theory for classification, as mandated by the Apex Court, rendering it per incuriam and not a precedent on the subject. Consequently, the Tribunal upheld the classification of the goods under Tariff Heading 6307.9090, invalidating the previous adjudication.

Conclusion
The Tribunal allowed all three appeals, determining that the goods supplied by the appellant for Defense and Paramilitary forces should be classified under Tariff Heading 6307.9090. The decision emphasized the importance of considering common parlance and trade understanding in classifying goods, as established by legal precedents. The judgment clarified the correct classification of the goods, resolving the dispute between the parties involved.