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2009 (12) TMI 644 - CGOVT - Central ExciseRevision Application - drawback - petitioner classifying the goods under Chapter No. 61.05/61.01 claiming DBK @10.6%/10.2%, lower authority classified under heading 60.07 of the Drawback Schedule for DBK rate of Rs. 9/- per kg - contention of the applicant that Drawback means rebate of Customs & Excise Duties, the recovery of any erroneous rebate if any is either under the provisions of Section 11A of the CE Act and 28 of the Customs Act, 1962, and since no suppression the larger time limit is not available for the recovery of the alleged excess recovery of drawback of customs duty Held that - Govt. is of the opinion that above provisions when read within the limits and scope of applicability of the same to the relevant drawback schedules shall only mean that what is of the Most Important and legal for the purpose of classification is the precise and most - specific description irrespective of any other provisions provided for ease of reference/guidance only. There is neither any requirement nor it would be proper to jump to next provision when the classification stands concluded by Rule 3(a) of general rules for interpretation of the Customs Tariff, exported goods are 80% cotton 20% wool knitted boys sweaters i.e. sweaters blended with cotton and wool, principle of most appropriate, precise and specific description is applied to the description as appearing in the relevant Drawback Schedule, as elaborated in the proceeding paras than it can be clearly inferred that the impugned export goods are more appropriately classifiable under S-heading 6007 of the then applicable Drawback Schedules. Govt. therefore is in agreement with the conclusion of Commissioner (Appeals) and finds the order-in-original as legal and proper as per Customs & Central Excise Drawback Rules, 1995 which stipulates that All Industry Rate of DBK is applicable only when the product exported is specifically covered in the descriptions mentioned in the Drawback Schedule, orders upheld and the revision application is hereby rejected being devoid of merits
Issues Involved:
1. Scope on Interpretation of Rule 3(b) of the Interpretation of CE Tariff Schedule. 2. Scope of Rule 13(a) and 3(c) of the said Rules of Interpretation of Tariff Schedule. 3. Scope of Chapters 60 and 61 of both the CETA as well as drawback schedule. 4. Classification of excisable goods based on trade parlance, commercial scope, and marketability. 5. Absence of expert/technical opinion. 6. Intention of the Parliament in providing separate chapters for fabrics and articles made thereof in Chapters 60 & 61. 7. Time-barred demand under Section 28 of the Customs Act, 1962. Detailed Analysis: 1. Scope on Interpretation of Rule 3(b) of the Interpretation of CE Tariff Schedule: The applicant argued that the classification of blended goods should follow Rule 3(b) of the Interpretation of the CE Tariff Schedule, which states that mixtures or composite goods consisting of different materials should be classified as if consisting of the material or component that gives them their essential character. In this case, the applicant contended that since the sweaters contain 80% cotton, they should be classified under the heading for cotton sweaters. 2. Scope of Rule 13(a) and 3(c) of the said Rules of Interpretation of Tariff Schedule: The applicant also referenced Rule 13(a) and 3(c) to support their classification under Chapter 61. Rule 13(a) prefers the most specific description, while Rule 3(c) applies when goods cannot be classified by reference to Rule 3(a) or 3(b), under the heading which occurs last in numerical order among those which equally merit consideration. 3. Scope of Chapters 60 and 61 of both the CETA as well as drawback schedule: The applicant highlighted the distinction between Chapters 60 and 61, arguing that Chapter 60 relates to fabrics while Chapter 61 pertains to products made from those fabrics. The applicant's sweaters, being finished products, should fall under Chapter 61. 4. Classification of excisable goods based on trade parlance, commercial scope, and marketability: The applicant emphasized that classification should align with trade parlance and commercial scope, citing Supreme Court rulings. The goods were described and classified as "80% cotton + 20% wool knitted boys sweaters" in the shipping bills, which were accepted by customs without dispute. 5. Absence of expert/technical opinion: The applicant pointed out the lack of expert or technical opinion in the lower authority's decision, arguing that such opinion is crucial for accurate classification. 6. Intention of the Parliament in providing separate chapters for fabrics and articles made thereof in Chapters 60 & 61: The applicant argued that the separate chapters for fabrics and articles made thereof indicate Parliament's intention to classify finished goods like sweaters under Chapter 61. 7. Time-barred demand under Section 28 of the Customs Act, 1962: The applicant contended that the demand for recovering excess drawback is time-barred under Section 28 of the Customs Act, 1962, as there was no suppression of facts. Judgment Analysis: Classification of Export Goods: The core issue was the classification of "80% cotton + 20% wool knitted boys sweaters." The applicant classified them under heading 6105, while the lower authority classified them under 6007 of the Drawback Schedule. The government noted that heading 6007 covers blended knitwear, while 6105 covers only cotton sweaters. Since the goods were blended, they fell under 6007. Interpretation of Rules: The government reviewed the relevant rules for interpretation, emphasizing that Rule 3(a) prefers the most specific description. Rule 3(b) applies when goods consist of different materials, classifying them based on the material giving the essential character. The government concluded that the most specific description for the blended sweaters was under heading 6007. Legal and Proper Classification: The government upheld the lower authorities' classification, finding it legal and proper under the Customs & Central Excise Drawback Rules, 1995. The All Industry Rate of DBK applies only when the product is specifically covered in the Drawback Schedule. Time-Barred Demand: The government did not find merit in the applicant's argument regarding the time-barred demand, as the classification and recovery of excess drawback were deemed appropriate. Conclusion: The revision application was rejected, and the impugned orders were upheld, maintaining the classification of the export goods under heading 6007 of the Drawback Schedule. The government's decision emphasized the importance of precise and specific description in classification, aligning with the principles of the Customs Tariff interpretation rules.
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