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TMI Blog2024 (3) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the above imported goods, the appellants also imported plastic pellets (containers) required for preventing damage to the imported goods during transit. These pellets are discarded at the port of import before transportation of the imported goods to the appellants' factory in the State of Karnataka. During the disputed period viz., February, 2018 to September, 2019, the appellants had classified the imported goods under Customs Tariff Item (CTI) 3207 4000 of the First Schedule to the Customs Tariff Act, 1975, in view of the classification adopted in the domestic, international markets and paid the applicable duty at the time of import. In the post-clearance audit of the import transactions, the department had objected to the classification adopted by the appellants under CTI 3207 and proposed classification under CTH 2853, on the basis of earlier classification adopted by appellants in the past, by issue of consultative letter dated 14.10.2019. The appellants filed their detailed reply by its letter dated 11.11.2019 providing the relevant documents and explanation thereof. Subsequently, the Department had fixed the pre-notice consultation hearing on 20.01.2020. On this the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd preparations of the chemical or allied industries, not elsewhere specified or included. Accordingly, they claimed that classification of impugned goods under CTH 3207 which specifically covers glass frit is appropriate, as it is settled law that specific entry must be given preference over a general entry, by placing reliance on the judgement of the Hon'ble Apex Court in the case of Dunlop India Limited Vs. Union of India - 1976 (20) SCC 24. 3.2 Learned Advocate also submitted that in terms of CBEC Circular No.3/2012-Customs dated 01.02.2012, it has been clarified that the sub- heading 3207 specifically covers glass frit and other glass, in the form of powder, granules or flakes. Further, he also relied upon the decision of this Tribunal in the case of Collector of Customs & Central Excise, Rajkot Vs. Parshuram Pottery - 2000 (118) E.L.T. 231 (Tribunal) wherein he stated that it has been held by the Tribunal that the classification of glass frit is under CTH 3207. It is also stated by him that packing material containing the imported goods is not to be classified separately unless it gives the imported goods an essential character or these are otherwise clearly suitable for rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is liable to be confiscated for alleged violations of the Customs Act, 1962. 6.2 In order to address the above issue of classification of imported goods, we would like to refer the relevant legal provisions contained in Section 12 of the Customs Act, 1962; the Customs Tariff Act, 1975 and rules framed thereunder for consideration of proper and appropriate classification of the subject goods under dispute. "Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government." "Section 1. Short title, extent and commencement. - (1) This Act may be called the Customs Tariff Act, 1975. (2) It extends to the whole of India. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a description in list of tariff provisions accompanied by a four-digit number and includes all subheadings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) "tariff item" means a description of goods in the list of tariff provisions accompanying eight digit number and the rate of customs duty; (2) the list of tariff provisions is divided into Sections, Chapters and Sub-Chapters; (3) in column (3), the standard unit of quantity is specified for each tariff item to facilitate the collection, comparison and analysis of trade statistics." 6.3 From plain reading of the above legal provisions, it transpires that in order to determine the appropriate duties of customs payable on any imported goods, one has to make an assessment of the imported goods for its correct classification under the First Schedule to Customs Tariff Act, 1975 in accordance with the provisions of the Customs Tariff Act, 1975 by duly fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f entries in the First Schedule to the Customs Tariff Act of contending Chapter headings 3207 and 3824 are extracted as below: Tariff Item Description of goods Unit Rate of Duty Standard Preferential Areas (1) (2) (3) (4) (5) 3207 PREPARED PIGMENTS, PREPARED OPACIFIERS AND PREPARED COLOURS, VITRIFIABLE ENAMELS AND GLAZES, ENGOBES (SLIPS), LIQUID LUSTRES AND SIMILAR PREPARATIONS, OF A KIND USED IN THE CERAMIC, ENAMELLING OR GLASS INDUSTRY; GLASS FRIT AND OTHER GLASS, IN THE FORM OF POWDER, GRANULES OR FLAKES 3207 10 -Prepared pigments, prepared opacifiers, prepared colours and similar preparations : 3207 10 10 ---Prepared organic dye-stuff pigments, dry Kg. 10% - 3207 10 20 ---Prepared organic dye-stuff pigments, paste Kg. 10% - 3207 10 30 ---Prepared inorganic pigments Kg. 10% - 3207 10 40 ---Prepared opacifiers prepared colours and preparations Kg. 10% - 3207 10 90 ---Other Kg. 10% - 3207 20 - Vitrifiable enamels and glazes, engobes (slips) and similar preparations: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 3824 81 00 -- Containing oxirane (ethylene oxide) Kg. 10% - xx xx xx xx xx xx xx xx 3824 99 -- Other: xx xx xx xx xx xx xx xx 3824 99 90 --- Other Kg. 10% - 8.1 It could be seen that by applying the GIR 1 - rule at (i) above, the position is made clear that Chapter Heading 3207 covers within its scope and ambit, mainly of two broad categories of goods: (i) first one i.e., "Prepared pigments, prepared opacifiers and prepared colours, vitrifiable enamels and glazes, engobes (slips), liquid lustres and similar preparations, of a kind used in the ceramic, enamelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be applied. As it could be seen that in the present case, when the classification of goods can be arrived at by following GIR-1, then there is no case for invoking GIR-4 arbitrarily. Further, the learned Commissioner of Customs (Appeals) in the impugned order had taken a view that the impugned goods are not used in glass or ceramic industry for denying the classification under CTI 3207 4000. As it could be seen from the discussion about the scope of coverage of the goods, in paragraph 8.1 above, the use of goods in ceramic, enamelling or glass industry is qualified for the first category of the goods covered under the CTI 3207 1010 to 3207 3000, and does not apply to goods covered under CTI 3207 4000. 9.2 We also find that our such view has also been supported by the clarification issued by the Ministry of Finance in CBEC Circular No.3/2012Customs dated 01.02.2012. The relevant paragraphs of the said circular are extracted below: "Circular No.03 / 2012 - Customs F. No. 524/129/2011-STO (TU) Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs 229A, North Block, New Delhi, 1st February, 2012. To All Chief Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Pre-Notice Consultation Regulations, 2018 to provide for an effective mechanism of consultation in respect of cases not involving collusion, wilful mis-statement, suppression etc., before issue of demand notice. In the present case, such consultation could not take place for the reason that the pre-consultation notice issued by the department was not received as on the scheduled date of consultation i.e., on 20.01.2020 by the appellants, but was received only on 22.01.2020 i.e., after two days of the proposed consultation. However, during the process of adjudication by the original authority and before the appellate authority, the appellants had appeared for personal hearings to explain their case. Hence, to this extent it cannot be said that the principles of natural justice was not followed by the department in adjudication process. 11.1 In respect of the issue of classification of 'plastic pallets', the authorities below had proposed classification of these goods separately under CTI 3923 1090, for the reason that the appellants had declared its value as miscellaneous charges and were paying applicable import duty under the same classification as that of the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be classified separately in terms of GIR-5(b). 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 dated 25.10.2002 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 dated 16.03.1994. Thus, we do not find any merits in the impugned order on this aspect and h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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