2024 (3) TMI 366 - AT - Customs

Classification of goods on the basis of use - Goods imported ground glass described as BIOMIN F-Ground Glass (Fluoro Calcium Phospho-Silicate) and BIOMIN C-Glass (Chloro Calcium Phospho-Silicate) - used in the manufacture of toothpaste - classified under Customs Tariff Item (CTI) 3207 4000 Or under CTI 3824 9990. Whether the plastic pallets which have been used for packing the imported goods, requires to be classified separately? Whether the imported goods along with packing material is liable to be confiscated for alleged violations of the Customs Act, 1962? HELD THAT - As the product under dispute is ground glass described as BIOMIN FGround Glass (Fluoro Calcium Phospho-Silicate) and BIOMIN C-Glass (Chloro Calcium Phospho-Silicate), it could be made out that these are covered more specifically by the description of CTI 3207 4000 as glass frit and glass in the form such as powder, granules or flakes . Further, the contending classification under CTI 3824 9990 as other under the residual entry of other chemical products and preparations of the chemical or allied industries , which is not elsewhere specified or included, residual entry. Further, in terms of the explanation given by the appellants the imported goods are being used in the manufacture of toothpaste, and thus these are not related to chemical or allied industry. Thus, we are of the considered view that for legal purposes, as per GIR-1, the classification of impugned goods under CTI 3207 4000 is appropriate. Classification of plastic pallets - In the present case, the imported goods have been presented along with the plastic pallets as packing containers, and thus there appears to be no requirement for a separate classification in terms of GIR-5 above. Further, the finding in the impugned order that the packing containers in this case are of repetitive use, is also contrary to the facts. In this case, the plastic pallets has been claimed in the impugned order and by original authority as packaging containers for repetitive use and hence are rightly classified separately under CTH 39 23. However, we do not find any document or detail in the Bill of entry to indicate that the plastic pallets are of durable containers for repetitive use. The CBEC in its clarification vide Circular No. 69/2002-Customs had clarified that any goods/containers used for packaging or transporting other goods, and capable of being used several times, would fall in the category containers of durable nature , which are exempt from import duty under Notification No.104/94-Customs. Thus, we do not find any merits in the impugned order on this aspect and hence the same is not sustainable. Imposition of penalty - We do not find any material evidence placed during the adjudication proceedings by the authorities below, to arrive at the conclusion that there was mis-declaration in the description of the goods or in classification of the goods, in order to claim that the appellants have violated the provisions of Section 111(m) ibid. Thus, we conclude that the products under consideration i.e., (i) BIOMIN F-Ground Glass (Fluoro Calcium Phospho-Silicate) and (ii) BIOMIN C-Glass (Chloro Calcium Phospho-Silicate) would appropriately be classifiable under Customs Tariff Item (CTI) 3207 40 00 and not under CTI 3824 99 90, as claimed by Revenue. Further, we also conclude that there no separate classification required to be adopted in respect of (iii) plastic pallets used as packing container or packing material, when presented along with the imported goods. Therefore, by setting aside the impugned order, we allow the appeal in favour of the appellants.

Summary

Issues Involved:
1. Classification of imported goods.
2. Classification of plastic pallets used for packing.
3. Confiscation of imported goods.
4. Imposition of penalty.

Summary:

1. Classification of Imported Goods:
The primary issue was whether the imported goods, 'BIOMIN F-Ground Glass (Fluoro Calcium Phospho-Silicate)' and 'BIOMIN C-Glass (Chloro Calcium Phospho-Silicate)', should be classified under Customs Tariff Item (CTI) 3207 4000 or CTI 3824 9990. The appellants argued that the goods should be classified under CTI 3207 4000 as "glass frit and other glass, in the form of powder, granules or flakes," citing CBEC Circular No.3/2012-Customs and several judicial precedents. The Tribunal agreed with the appellants, stating that the goods are more specifically covered under CTI 3207 4000 and not under the residual entry of CTI 3824 9990, which pertains to "other chemical products and preparations of the chemical or allied industries."

2. Classification of Plastic Pallets:
The second issue was whether the plastic pallets used for packing the imported goods should be classified separately under CTI 3923 1090. The Tribunal referred to General Interpretative Rule (GIR) 5, concluding that the plastic pallets, being presented along with the imported goods and not suitable for repetitive use, should not be classified separately. The Tribunal found no evidence that the pallets were durable containers for repetitive use, contrary to the findings of the Commissioner (Appeals).

3. Confiscation of Imported Goods:
The Tribunal found no grounds for the confiscation of the imported goods under Section 111(m) of the Customs Act, 1962, as there was no mis-declaration in the description or classification of the goods.

4. Imposition of Penalty:
The Tribunal held that there was no material evidence to justify the imposition of a penalty under Section 112(a) of the Customs Act. It cited the Co-ordinate Bench decision in Bharat Bijlee Ltd., which held that penalties are not warranted in matters of classification interpretation.

Conclusion:
The Tribunal concluded that the imported goods should be classified under CTI 3207 4000 and not CTI 3824 9990. It also held that plastic pallets used for packing should not be classified separately. The Tribunal set aside the impugned order of the Commissioner of Customs (Appeals) and allowed the appeal in favor of the appellants.