2000 (10) TMI 482 - AT - Customs

Summary

Issues: Classification of price labellers under specific headings, Competency of lower authority in passing order, Classification under heading 84.22 or 96.11, Commercial parlance test for classification, Consistency in classification at different Custom Houses.

Classification of price labellers under specific headings:
The appeal involved the classification of price labellers model Nos. MX 5500P, MX 5500 EOS, and MX 5500 by M/s. Subh Subham Traders. The issue was whether these hand-operated machines should be classified under heading 9611.00 or heading 8422.30. The Asstt. Commissioner classified the imported goods under heading 9611.00 based on Interpretative Rules, emphasizing the specificity of this heading. The Commissioner (Appeals) upheld this classification, noting that heading 96.11 provides a more specific description compared to heading 84.22, as it covers devices for printing or embossing labels designed for hand operation. The Tribunal concurred with this classification, emphasizing the specific nature of the goods as labelling machines under heading 96.11.

Competency of lower authority in passing order:
The Commissioner (Appeals) addressed the competency of the lower authority in passing the classification order. It was argued that the order was without jurisdiction, illegal, and barred by res judicata. The Commissioner (Appeals) rejected these arguments, stating that the lower authority had the discretion to classify goods submitted for assessment, even if it deviated from earlier practices. Citing Section 129D of the Customs Act, it was clarified that the lower authority's decision did not violate legal propriety. The Commissioner (Appeals) highlighted that the principles of estoppel and res judicata do not apply to tax matters, allowing for revised classifications based on cogent reasons. The Tribunal supported this view, emphasizing the authority's right to reclassify goods for each consignment.

Classification under heading 84.22 or 96.11:
In a separate appeal by M/s. Impex International, the Commissioner (Appeals) determined that the goods should be classified under heading 96.11. The Tribunal reviewed the classification, considering the primary function of the imported entity as affixing labels, leading to the conclusion that it aligns more closely with a labelling machine under heading 8422.30. The Tribunal disagreed with the classification under heading 96.11, emphasizing the primary specialized function of the entity in labelling parts or containers of garments.

Commercial parlance test for classification:
The Tribunal applied the commercial parlance test to determine the classification of the imported goods. It noted that the entity, described as a labelling machine, not only stamped labels with logos but also printed prices and generated self-adhesive gummed labels. By analyzing the complex mechanism and specialized function of affixing labels, the Tribunal concluded that the goods fell under the more specific heading 8422.30. The Tribunal highlighted the importance of considering the entity's functionality beyond simple stamping in the classification process.

Consistency in classification at different Custom Houses:
The Tribunal addressed the issue of consistency in classification between Custom Houses. It noted that the imported goods were previously classified under heading 8422.30 at the Chennai Sea Port, a major Custom House. The Tribunal emphasized that this established classification should not be disregarded by the Air Custom House in Chennai, supporting the classification under heading 8422.30 for the imported labelling machines.

This comprehensive analysis of the judgment from the Appellate Tribunal CEGAT in Chennai provides detailed insights into the classification of price labellers under specific headings, the competency of lower authorities in passing orders, the application of the commercial parlance test for classification, and the importance of consistency in classification practices across different Custom Houses.