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TMI Blog2018 (11) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case are that, during the period under consideration, the assessee-Respondents were engaged in the manufacture of "Absorbent Cotton Wool IP" and "Cotton Rolls". During the course of search by the Officers of Department, it was found that they were not only engaged in the manufacture of "Absorbent Cotton Wool IP", but also engaged in the manufacture of "Absorbent Cotton Wool IP" of "Rupam" & "Girnar" brands owned and marked by M/s Modern Sales Corporation Bhiwandi, District - Thane (Maharashtra) and clearing the same without payment of duty. Accordingly, a show cause notice was issued demanding duty and penalties, but both the adjudicating authorities below dropped the demands on the ground that the goods are covered under Chapter sub-heading 56012110 and thus Notification No. 30/2004-CE is not applicable. Being aggrieved, the Department filed the present appeal. 3. With this background, we have heard Sh. R.K. Mishra, learned DR for the Revenue and Ms. Rinki Arora, learned counsel for the assessee-Respondents. 4. After hearing both sides and on perusal of the material available on record, it appears that an identical issue has come up for consideration before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dental or veterinary purposes" because appellants were selling their goods to various government hospitals and hospitals of railway and defence establishments. The first part of broad definition of Chapter Heading 3005 was not considered because the fact that the goods were not coated or impregnated with pharmaceutical substances has not been disputed. For determining the classification under Chapter Heading No. 30, the department has consulted and relied upon the Section notes, the Chapter note, the explanations of HSN and the case laws of various judicial forums. On the contrary, the appellants have pleaded that the goods in question were rightly classifiable under their respective sub-headings as claimed by them, on the basis of nomenclature. The basic submission of the appellants was that the specific entry cannot be overridden by the residuary entry. In support of their contention they have relied upon various judicial pronouncements of Hon'ble Apex Court and Hon'ble Tribunal, wherein it has been settled that the specific entry will prevail over the general. The next submission of the appellant was that their sales were not the 'retail sales' as the goods were not sold for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Weight & Measures (Packaged Commodities) Rules, 1977; the samples of the goods in question produced before me and the submissions made by the appellant in the grounds of appeal and at the time of personal hearing. Before proceeding to decide the appropriate classification, let us go through the correct method to be adopted for classification. In my opinion the basics of the classification are that initially an attempt should be made to search a specific entry where the goods can be classified as per the nomenclature and the constituent material. In case no specific entry is available the next attempt should be to find the nearest entry where the goods can be classified. In case both the attempts turn to be futile then the attempt should be made to consider the end uses, the inclusion and exclusion clauses provided in the section notes, the chapter notes and the explanatory notes given the HSN. While doing so the interpretation of the said Note will depend upon the context in which the entries have been worded. If an entry is clearly worded and is broad in character, the same would lead to the conclusion. An entry is to be given its ordinary meaning. If any goods fit in within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd mill neps Kg 8% 5602 Felt, whether or not impregnated, coated, covered or laminated. It is well settled what is not excluded would be held to be included. In this regard, I would like to quote the provisions of Rule 1 of the Rules for the Interpretation which clearly provides that "1. The titles of Sections and chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provisions hereinafter contained." In the aforesaid rule there is no ambiguity and it has clearly been held that the classification has to be determined according to the terms of headings and in case of any ambiguity the Rule 2, 3 or 4 as the case may be, shall be applied. Furthermore, the Rule 5 of aforesaid Rules again clarifies the position. For the sake convenience the provisions of said rules are reproduced as follows : - "5. For legal purposes, the classification of goods in the Sub-headings of a heading shall be determined according to the terms of those Sub-headings and any related Sub-heading note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comparing various Chapter Headings has further noticed that "Flow meters are specifically covered in Tariff Heading 90.24. Specific excludes general, is the well-known principle. Heading 90.29 permits levy on parts or accessories which are used solely in the manufacture of one or more of the articles falling within Heading 90.24. The Assistant Collector held that the accessories imported by the appellant were used solely for the meter manufactured by the appellant. Therefore, if the meter manufactured by the appellant can be said to satisfy the description of Tariff Heading 90.24, then by virtue of Tariff Heading 90.29 the rate of duty on the components imported by the appellant could be levied as in Tariff Heading 90.24. On the finding recorded by the Assistant Collector the end-product manufactured by the appellant being specifically provided for by 90.24, the accessory imported by the appellant which was solely used for manufacture of it was liable to be classified on the same rate as the item in which it was used, namely, flow meter." The findings above clearly lay that the specific will prevail over the general. I notice that the Adjudicating Authority has referred the said ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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