1998 (7) TMI 244 - AT - Customs

Summary

Issues: Classification of imported goods under Tariff Heading 8711.90, applicability of Explanatory Notes to HSN, ITC policy classification, confiscation under Section 111(d), penalty under Section 112.

Classification under Tariff Heading 8711.90:
The appellants imported goods described as "Spare parts" complete body unit for Scooters and claimed classification under Tariff sub-heading 8714.19. However, authorities classified it as a complete Scooter in an unfinished form under Tariff Heading 8711.90 based on Explanatory Notes to HSN. The appellant argued that without an engine, it cannot be considered a complete Scooter. The Tribunal, considering the Explanatory Notes to HSN, agreed with the authorities' classification, emphasizing the persuasive value of these notes in alignment with the Customs Tariff of Chapter 87.

ITC Policy Classification:
The authorities held the goods liable for confiscation under Section 111(d) and imposed a penalty under Section 112 due to being in the negative list of the ITC policy, requiring a license for import. The appellant contended that as per the ITC Policy definitions of parts, the goods should be classified as parts and not in the negative list, allowing import under OGL. The Tribunal agreed with the appellant, ruling that the rules of interpretation of the Tariff and Explanatory Notes to HSN cannot be applied to interpret the ITC Policy. Confiscation and penalty were deemed unwarranted based on the understanding that the policy refers to complete motor vehicles specifically listed, not based on the Customs Tariff Act interpretation.

Conclusion:
The Tribunal upheld the classification of goods under Tariff Heading 8711.90 based on the Explanatory Notes to HSN, emphasizing their persuasive value. Regarding the ITC Policy, it ruled in favor of the appellant, stating that the rules of interpretation and Explanatory Notes do not apply to the policy. Confiscation and penalty were set aside, providing relief to the appellants. The judgment clarified the distinction between classification under the Customs Tariff Act and the ITC Policy, ensuring adherence to the specific requirements of each regulation.