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2022 (4) TMI 890 - AAR - CustomsMaintainability of Advance Ruling application - time limitation - classification of goods - aerosol valve - to be classified under 8481 or 8424 or 9616? - HELD THAT - It is observed that the instant application relates to on-going activity of import of aerosol valves which is included in the portfolio of activities being carried out by the applicant for last several years. In view of lack of clarity regarding the appropriate classification of the goods being imported by them the question posed for ruling is regarding the correct classification of the aerosol valves with the applicant contending that the most appropriate classification is sub-heading 8424 89 90 with possibility of it being classified under Heading 8481 but definitely not under 9616 as has sometimes been contended by the department but not pressed. In the instant case of on-going activity a ruling by this Authority shall impart certainty to the issue of appropriate classification provided that the jurisdiction of this Authority is not ousted by proviso to Section 28-I(2) of the Customs Act - it is found that proviso one is not applicable in the instant case on the ground that it has been so claimed by the applicant and confirmed by the concerned Commissioner of Customs and DRI Regional Unit Jaipur. The second proviso prescribes that this Authority shall not allow an application where the question raised in the application is same as in a matter decided already by the Appellate Tribunal or any court . As mentioned in the application the applicant had cited reference to three CESTAT cases claiming that certain judicial decisions put the aerosol valve in category of 8481 or 8424. However in their additional submission they have clarified that the impugned goods are different from those which were subject matter of the said three Tribunal decisions. Classification of goods - aerosol valve - HELD THAT - The applicant has described various components of the goods in question as valve actuator valve cup stem stem gasket spring housing and dip tube. Moreover applicant has furnished copies of few bills of entry filed by them wherein items under import had been declared as aerosol valve components of aerosol valve (actuator diptube) etc. In view of the forgoing it is observed that the goods (sample of which has been supplied by the authorized representative of the applicant) in respect of which ruling on classification has been sought is not a simple or mere valve. Accordingly for the impugned product classification under Tariff Heading 8481 does not appear appropriate. As regards Heading 9616 it refers inter alia to Scent sprays and similar toilet sprays and mounts and heads therefore . I find that Collins dictionary defines scent spray as a perfume that comes in aerosol bottle. Having gone through the product description given by the applicant and viewed the sample provided to this office I find that the product in question is a component of spray mechanism capable of spraying fluid (aerosol) from a bottle/container. Therefore I am of the considered opinion that goods in question can also be mounted on bottle/can of Scent spray for delivery of Scent/perfume which can be containerized under pressure. Thus when the goods in question are used as mounts and heads for dispersing or spraying of Scent then in the light of Rule 1 and 6 of the General Rules for the Interpretation of Import Tariff these would be classifiable under Heading 9616 - thus in the instant case the impugned goods with general purpose use do not merit classification under Heading 96.16 which has very precise scope. The third Heading 8424 covers inter alia mechanical appliances (whether or not hand operated) for projecting dispersing or spraying liquids or powders. The features of the goods in question are consistent with the scope of the said Heading 8424 inasmuch as these are components of hand operated mechanical appliances meant for spraying liquids (aerosols). Therefore impugned goods merit classification under Heading 8424 in the light of Rule 1 and 6 of the General Rules for the Interpretation of Import Tariff; and specifically under sub-heading 8424 89 90. Application disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Authority for Advance Rulings (Customs) relate primarily to the classification of imported goods under the Customs Tariff Act, 1975. Specifically:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of the Application under Section 28-I(2) of the Customs Act Relevant legal framework and precedents: Section 28-I(2) of the Customs Act bars the Authority from allowing an application where the question raised is either pending before any Customs officer, Tribunal, or Court, or has already been decided by such authorities. The proviso aims to avoid duplication and conflicting rulings. Court's interpretation and reasoning: The Authority examined whether the present application was barred under this proviso. The applicant contended, and the Commissioner of Customs and Directorate of Revenue Intelligence (DRI) confirmed, that no such question was pending or decided in the applicant's case. Although judicial precedents on similar goods exist, the applicant argued that the impugned goods differ materially from those considered in those cases. Key evidence and findings: The Authority reviewed three Tribunal decisions cited by the applicant involving metered valves, solenoid valves, and nozzles, none of which directly addressed the specific aerosol valve components imported by the applicant. The departmental cited case involved spray pump parts classified under Heading 9616, which the Authority distinguished based on product differences. Application of law to facts: Since the question raised was not pending or decided in the applicant's case, the proviso's bar was not attracted. The Authority held that the application was maintainable and proceeded to consider the classification issue. Treatment of competing arguments: The department argued reliance on prior Tribunal decisions to disallow the application, but the applicant successfully distinguished their goods from those cases. The Authority accepted the applicant's distinction and maintained the application's admissibility. Conclusions: The application was held maintainable under Section 28-I(2) provisos. Issue 2: Correct Classification of the Imported Goods (Aerosol Valves) Relevant legal framework and precedents: Classification is governed by the Customs Tariff Act, 1975, and the Harmonized System of Nomenclature (HSN). The General Rules for Interpretation (GRI) 1 and 6 and Chapter Notes provide guidance. The relevant headings under consideration were:
Precedents cited by the applicant included Tribunal rulings in cases involving metered valves and solenoid valves classified under 8424 or 8481, rejecting classification under 9616. Court's interpretation and reasoning: The Authority undertook a detailed product analysis, including examination of physical samples and product literature. It was noted that the goods are mechanical, hand-operated aerosol valves comprising components such as valve, actuator, valve cup, stem, gasket, spring, housing, and dip tube. The valves function as pressure-reducing devices mounted on containers to spray liquids under pressure. The Authority observed that:
Key evidence and findings: The physical sample and product descriptions confirmed the mechanical and functional characteristics of the valves as pressure-reducing spray devices. The applicant's submissions, supported by expert opinions and departmental comments, reinforced the distinction from pumps classified under 9616. Application of law to facts: Applying GRI 1 and 6, and Chapter Note 2, the Authority concluded that the aerosol valves are best classifiable under Heading 8424, sub-heading 8424 89 90. The alternative classification under 8481 was acknowledged but considered less appropriate. Classification under 9616 was rejected due to the product's general-purpose nature and functional dissimilarity to scent spray mounts and heads. Treatment of competing arguments: The department contended for classification under 9616 based on some prior investigations and interpretations. The applicant rebutted this by highlighting functional and structural differences, supported by judicial precedents rejecting 9616 classification for similar products. The Authority accepted the applicant's arguments and rejected the department's contention. Conclusions: The impugned goods are classifiable under CTH 8424 89 90. 3. SIGNIFICANT HOLDINGS The Authority's crucial legal reasoning includes the following verbatim excerpts:
Core principles established include:
Final determinations:
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