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TMI Blog2012 (8) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 of penalty, leading to this appeal by the Department. 4. The learned DR Ms. Indira Sisupal arguing for the Department states that under the Foreign Trade Policy, all goods other than these figuring under the entries in the Export Licensing Schedule, are freely exportable. However, the Export Licensing Schedule under Chapter 44, against Sl. No. 146 clearly prohibits export of the following :- "Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end jointed of a thickness exceeding 6 mm other than sawn timber made exclusively out of imported logs/timber." She states that the impugned goods are clearly sawn and sized timber and not wooden furniture parts as claimed by the respondents and hence these are cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iption 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 relevant to ascertain whether the product falls under Table A or Table B of the export policy. Sl. No. 146 of the export policy, which is invoked by the Department in the present case, falls under Table B of the export policy and therefore, only such goods which are classifiable under chapter 4407 can be brought under the prohibition. Since the exporter has been able to demonstrate that the subject goods are in fact sofa frames and not merely sawn wood, Sl. No. 146 of the export policy cannot be attracted. During the hearing of the stay petition, this Hon'ble Tribunal had taken a prima facie view that the exporter has to establish not only that the subject goods are parts of furniture but will also have to prove that the goods d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les 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 condition. It is also pertinent to note that 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. (5) The respondent has produced the photograph of the subject goods, packing list, invoice and technical drawings in support of their case. The packing list and invoice clearly shows how many bundles of one seater, two seater and three seater sofa frames have been stuffed in the container. The subject goods are not merely sawn wood and are identifiable as furniture parts by reason that they have been cut to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 settled law that in matters involving legal interpretation, penalty is not imposable. 6. We have considered arguments from both sides. A copy of the coloured picture of the impugned goods submitted by the learned counsel is appended herewith as the same puts in correct focus the kind of goods which are sought to be exported in this case which is not so obvious from a black and white picture. Many of the arguments raised on behalf of the respondents were dealt with us in detail at the time of hearing the stay application filed by the Department. 7. We find that the Interpretative Rules being referred to by the learned counsel for the respondents is actually a part of the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by WCO as further elaborated by the Ministry of Finance, Government of India. As such, the import policy is fully based on the HSN including its Section Notes, Chapter Notes and the Interpretative Rules in toto, except for a few adaptations which have been made in the descriptions to comply with the existing import policy as stated in the beginning of the Schedule-1 dealing with the import policy. 10. In contrast, under Schedule-2 dealing with Export Policy, it has been explained that the "Item Description" against each code gives the specific description of goods, which are subject to export control. It has also been stated therein that this description does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 general nature and even if the same is not taken into consideration, the fact remains that what have been presented for export are sawn and sized wooden pieces tied in a bundle and the same very much conform to the description of sawn wood under Sl. No. 146 of the Export Licensing Schedule and therefore, remain in the prohibited category which cannot be permitted to be exported. 14. In view of the foregoing and specially because of the fact that the impugned goods conform to the description under Sl. No. 146 of the Export Licensing Schedule, we are of the view that the impugned order passed by the lower appellate authority cannot be sustained and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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