TMI Blog2012 (8) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... ber (T)]. Heard both sides. 2. The respondents filed a Free Shipping Bill for export of the impugned goods declaring the same as New wooden furniture components (sofa frames) . The impugned goods were taken from Kerala to Tuticorin Port in a stuffed container. On suspicion, the consignment was examined by the officers of the Special Intelligence and Investigation Branch (SIIB) of Tuticorin Custom House and it was found that the export items were sawn timber of country wood made from Aini trees and Jackfruit trees. In all 16,250 pieces of sawn timber were found in the container. 3. The original authority while adjudicating the case has held that the impugned goods were nothing but sawn timber which is prohibited for export under the Foreign Trade Policy and hence he has confiscated the goods under Section 113(d) of the Customs Act, 1962; has imposed a redemption fine of Rs. 50,000/- while allowing redemption for domestic use; and has also imposed a penalty of Rs. 50,000. On appeal by the respondents, the lower appellate authority has held the impugned goods to be wooden furniture components (sofa frames) and hence, has set aside the order of confiscation and imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the wood pieces with the help of an air gun. It is only for the ease of transportation that the subject goods have been stacked in the container in an unassembled condition. It is also submitted that applying the general rules of interpretation, it can be safely concluded that the subject goods are parts of furniture and not merely sawn wood. (2) The General Rules of Interpretation is applicable even for the interpretation of the export policy. Note 2 of the General Notes to the Export Policy states that the export policy of a specific item will be determined by the description and nature of restriction in the Schedule. It further provides that the code number is illustrative of classification but does not limit the description by virtue of the standard description of the items against the code in the import part of the ITC HS Classification. However, it is pertinent to note that the export policy is divided into two tables viz., Table A - Goods falling in more than one chapter of ITC HS classification and Table B - Goods falling within specific chapters of ITC HS classification. From this categorization, it becomes clear that the chapter heading of the product is very much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riff Act, 1975 shall mutatis mutandis apply for classifying the export goods listed in the Drawback Schedule. Therefore, the general rules of interpretation are applied for determining the classification of the export goods under the drawback schedule. There cannot be two assessments, one for drawback and the other for determining the export policy of a product. It may be kindly noted that in the instant case, though free shipping bill has been filed, the goods are eligible for drawback under the drawback schedule. The Board, vide its circular dated June 3, 2008, (page 29 of type set of paper - II) issued in respect of clarifying doubts regarding covering of items in the export schedule has clarified that the guiding principles enunciated in the rules for interpretation of the first schedule may be followed by assessing officers in deciding whether a particular iron/steel product will attract export duty. From the above, it is clear that the general rules of interpretation is applicable for determining the classification of the export goods. (4) The Department would not have raised any objection in the present case had the exporter exported the subject goods in fully assembled co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, 15, 16 and 17 has clearly stated that his knowledge that the subject goods can be used for making false roofing is purely hearsay. Further, his answer to question No. 26 clearly reveals the fact that he is not aware how the subject goods can be made into one sofa frame and has admitted the fact that only a carpenter would know the detail. From the above, it is clear that the statement of the carpenter or the Forest Ranger can have no bearing to determine the classification of the subject goods. The respondent has demonstrated that the subject goods are sofa frame (parts of furniture). (7) In any case no penalty can be imposed on the respondent in as much as there was no mala fide intention to export the goods in violation of the export policy. Investigations on similar lines were conducted earlier by SIIB, Tuticorin, Custom House in 2008. After investigation, the goods were found to be rightly classifiable under 9403 and accordingly the export cargo was released by SIIB. This factual position is not disputed. Therefore, the present shipping bill was filed only on the bona fide belief that the subject goods are classifiable as furniture parts. It is submitted that it is a sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not been specifically made applicable to the Export Licensing Schedule by any referential legislation. On the contrary, Note 2 to the Export Policy specifically states that the export policy of a specific item will be determined mainly by the description and nature of restriction in the Schedule and that the code number is merely illustrative. Hence, the argument advanced on behalf of the respondents that the goods entered for export should be taken out of the scope of Sl. No. 146 in the Export Licensing Schedule by application of the Interpretative Rules in the Import Schedule and allowed free export is not tenable. 9. We also find that under Schedule-1 to the ITC (HS) Classification of Export and Import Items dealing with Import Policy, the Item Description has been explained in the beginning. It is stated thereunder that Col. 2 for Item Description contains the ITC (HS) description against respective codes and that the coverage of the commodity is based on the Harmonised System of Nomenclature developed by the World Customs Organization (WCO). Further, it is also stated under Schedule-1, Import Policy, in the beginning that the said document is based on the HSN developed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wild animals and animal articles, dress materials, military stores, samples/exhibits etc. Listing of such general items under Table-A in no way dilutes the importance of General Note 2 to Export Policy. In respect of this Table also, the description has to be given due importance. 12. Further, the goods entered for export clearly meet the specific description under Sl. No. 146 of the Export Licensing Schedule which covers sawn wood. The opinion gathered by the original authority from the forest official and the carpenter in the trade also point out that the sawn and sized wooden pieces are of a variety used for making pallets, false roofing and similar items. We find that the lower appellate authority has not taken such opinion into consideration. Further, the fact that the seller and the buyer are furniture manufacturers cannot be a relevant criterion for determining as to whether the impugned goods fall within the description under Sl. No. 146 as has been done by the lower appellate authority. 13. The learned counsel for the respondents has laboured hard to pick holes in the evidence given by the carpenter and the forest official. The evidence collected from them is of gener ..... X X X X Extracts X X X X X X X X Extracts X X X X
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