TMI Blog2012 (12) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (GR.VA ) /2009 ( JNCH ) /IMP-87 to 98 dated 31-8-2009 passed by the Commissioner of Customs (Appeals) Mumbai-II. As the issue involved in all these appeals are common, they are taken up together for consideration and disposal. 2. The appellant M/s Hitachi Home Life Solution India Ltd., Ahmedabad, filed 12 bills of entry during May and June 2009 declaring the goods under importation as Hitachi Brand Refrigerator originating from Thailand and classifying the goods under CTH No.84182100 and claiming the benefit of notification No. 85/04-Cus dated 31-8-2004 which provides for a concessional rate of customs duty on specified goods imported from Thailand under the Free Trade Agreement between India and Thailand. The assessing officer classified the goods under CTH 84181090 on the ground that the goods under importation were combined refrigerators-freezers, fitted with separate external doors and therefore, not eligible for the aforesaid exemption. The appellant preferred an appeal before the lower appellate authority who rejected their appeals. Hence the appellant is before us. Thus the issue before us for decision is whether the goods under importation are combined refrigerators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation, the heading which provides the most specific description shall be preferred to headings providing a more general description. Once a product is covered under rule 3 ( a), the question of invoking rule 3 ( c) does not arise at all. (c) Heading No. 8418 covers Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other air conditioning machines of heading 85.15. This shows that the classification is based on the function of the equipment. This heading is further sub-divided into seven sub-headings based on the functionality. The first sub-division is combined refrigerator-freezers, fitted with external doors; the second sub-division is refrigerators, household type; the third and fourth sub-division covers freezers of different types; the fifth sub-division covers other furniture for storage and display, incorporating refrigerating or freezing equipment; the sixth sub-division covers other refrigerating or freezing equipment; heat pumps and the last and seventh sub-division covers parts of the above. For the purposes of classification, the product has to be categorized under the sub-division which is the most specific base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cooling system Air Jet flow Refrigerator Compartment Convertible compartment - Tempered glass shelves * 3-way flexible shell * Slide out chilled case * Vegetable compartment 2-way humidity controller - High-moisture radiation cooling * Slide type double deck drawer * Freezer compartment Front jet freezing - Movable twist ice tray - Twist ice tray - Automatic ice maker * Tempered glass shelf - Slide type double deck drawer * General Features Electronic control * Eco -thermo sensor * Nano titanium * Lock Key - Refrigerant R 600a (CFC JFC Free) Colour Stainless steel ST PCM - 5.2 From the illustrative product specification given above, it can be easily seen that the equipment consist of separate refrigerator and freezer compartments and there are separate external doors for these two compartments. Further the capacity for these are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is very relevant to see how the customs tariff treats these two products refrigerator and freezer for the purpose of classification. Heading 8418 of the Customs Tariff is reproduced below:- 8418 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 8415 8418 10 - Combined refrigerator-freezers, fitted with separate external doors: 8418 10 10 --- Commercial type - 8418 10 90 --- Other - - Refrigerators, household type: 8418 21 00 -- Compression-type - 8418 29 00 -- Other - 8418 30 - Freezers of the chest type, not exceeding 800 I capacity: 8418 30 10 --- Commercial type electrical - 8418 30 90 --- Other - 8418 40 - Freezers of the upright type, not exceeding 900 I capacity: 8418 40 10 --- Electrical - 8418 40 90 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apacity ; (5) - Other furniture (chests, cabinets, display counters, showcases and the like) for storage and display, incorporating refrigerating or freezing equipment ; (6) - Other refrigerating or freezing equipment; heat pumps: ; and `(7) - Parts:. The scheme of classification in the Customs Tariff as enumerated above clearly reveals that Combined refrigerator-freezers with separate external doors, Refrigerators, household type and freezers of different types have been classified separately. Thus the tariff does not treat them as a single entity but distinct and different entities, for the purpose of tax treatment. The entry -Combined refrigerator-freezers, fitted with separate external doors have been further sub-divided into two categories 1) Commercial type and 2) Other. Thus such equipment which are used in households will merit classification under sub-heading No. 8418 10 90 and we hold accordingly. 5.7 The appellant has argued that the product in question merits classification equally under both sub-headings, namely, 8418 10 90 and 8418 21 00 and therefore, following rule 3(c) of the General Interpretative Rules, the entry occurring numerically later should be preferred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable. (c) When goods can not be classified by reference to (a) or (b), they shall be classified under the head which occurs last in numerical order among those which equally merit consideration. 4. Goods which can not be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5.... 5.8 A reading of the rule makes it absolutely clear that the rules have to be applied sequentially. Only if the preceding rule does not apply, the subsequent rule can be invoked for the purpose of classification. Therefore, if rule 3(c) has to be invoked, rules1, 2, 3(a) and 3 (b) have to be exhausted. One can not jump to rule 3 (c) directly. Rule 1 stipulates that classification shall be determined according to the terms of the headings. According to the terms of heading 8418, there is a specific classification proposed for Combined refrigerator-freezers, fitted with separate external doors under CTH 841810. If the impugned goods satisfies this description (terms), there is no need to go any further down in the rules. We have already seen from the product catalogue that the impugned goods satisfy the descrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omposition of the goods. Even then, the apex court classified the product under rule 3 (a), that is, specific heading to be preferred over general heading and not under the residual rule 3 (c). In the case before us, the dispute is not based on composition of the material. Therefore, the ratio of this judgment can not be imported for the purpose of classification. Even when one applies the ratio, the specific description has to be preferred over the general heading. In the case before us, it has already been held that heading no.841810 is most specific and not heading no. 841821. Thus this judgment does not support the case of the appellant at all; on the contrary, it supports the case of revenue. 5.10 It is a well settled position in law that in interpretation of fiscal statues, the principle of strict interpretation should be followed. The principle of strict interpretation of taxing statutes is best enunciated by Rowlatt J in his classic statement: "In a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the customs duty applies to import and export transactions in commodity trade and the tariff takes into account the commercial parlance while classifying the products. The Indian Customs Tariff is based on the Harmonised System of Nomenclature (HSN in short). According to World Customs Organisation web site - "HSN is a multi-purpose international product nomenclature developed by the World Customs Organization. It comprises about 5000 commodity groups, each identified by a six digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification. The system is used by more than 200 countries and economies as a basis for their Customs Tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HS." In other words, the commercial parlance in international trade is already built into the Customs Tariff. Therefore, when the commodity classification is done under the HS code, it automatically satisfies the trade parlance test. 5.13 If we apply the above principle to the facts of the present case, without any iota of doubt, it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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