TMI Blog2018 (11) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... the period under consideration, the assessee-Respondents were engaged in the manufacture of Absorbent Cotton Wool IP and Cotton Rolls . During the course of search by the Officers of Department, it was found that they were not only engaged in the manufacture of Absorbent Cotton Wool IP , but also engaged in the manufacture of Absorbent Cotton Wool IP of Rupam Girnar brands owned and marked by M/s Modern Sales Corporation Bhiwandi, District Thane (Maharashtra) and clearing the same without payment of duty. Accordingly, a show cause notice was issued demanding duty and penalties, but both the adjudicating authorities below dropped the demands on the ground that the goods are covered under Chapter sub-heading 56012110 and thus Notification No. 30/2004-CE is not applicable. Being aggrieved, the Department filed the present appeal. 3. With this background, we have heard Sh. R.K. Mishra, learned DR for the Revenue and Ms. Rinki Arora, learned counsel for the assessee-Respondents. 4. After hearing both sides and on perusal of the material available on record, it appears that an identical issue has come up for consideration before the Tribunal in the case of M/s Shanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes because appellants were selling their goods to various government hospitals and hospitals of railway and defence establishments. The first part of broad definition of Chapter Heading 3005 was not considered because the fact that the goods were not coated or impregnated with pharmaceutical substances has not been disputed. For determining the classification under Chapter Heading No. 30, the department has consulted and relied upon the Section notes, the Chapter note, the explanations of HSN and the case laws of various judicial forums. On the contrary, the appellants have pleaded that the goods in question were rightly classifiable under their respective sub-headings as claimed by them, on the basis of nomenclature. The basic submission of the appellants was that the specific entry cannot be overridden by the residuary entry. In support of their contention they have relied upon various judicial pronouncements of Hon ble Apex Court and Hon ble Tribunal, wherein it has been settled that the specific entry will prevail over the general. The next submission of the appellant was that their sales were not the retail sales as the goods were not sold for retail consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht Measures (Packaged Commodities) Rules, 1977; the samples of the goods in question produced before me and the submissions made by the appellant in the grounds of appeal and at the time of personal hearing. Before proceeding to decide the appropriate classification, let us go through the correct method to be adopted for classification. In my opinion the basics of the classification are that initially an attempt should be made to search a specific entry where the goods can be classified as per the nomenclature and the constituent material. In case no specific entry is available the next attempt should be to find the nearest entry where the goods can be classified. In case both the attempts turn to be futile then the attempt should be made to consider the end uses, the inclusion and exclusion clauses provided in the section notes, the chapter notes and the explanatory notes given the HSN. While doing so the interpretation of the said Note will depend upon the context in which the entries have been worded. If an entry is clearly worded and is broad in character, the same would lead to the conclusion. An entry is to be given its ordinary meaning. If any goods fit in within one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3005 90 70 ---Corn removers and callous removers Kg 16% 3005 90 90 ---Other Kg 16% 5202 Cotton waste (including yarn waste and garneted stock) Unit Rate of Duty 5202 10 00 -Yarn waste (including thread waste) Kg Nil -Other: 5202 91 00 --- Garneted Stock Kg Nil 5202 99 00 ---Other Kg Nil 5203 00 0 Cotton Carded or combed Kg Nil 5204 Cotton sewing thread, whether Or not put up for retail sale. Heading No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, shall be applied. Furthermore, the Rule 5 of aforesaid Rules again clarifies the position. For the sake convenience the provisions of said rules are reproduced as follows : - 5. For legal purposes, the classification of goods in the Sub-headings of a heading shall be determined according to the terms of those Sub-headings and any related Sub-heading notes and mutatis and mutandis, to the above rules, on the understanding that only Sub-headings at the same level are comparable. For the purposes of this rule, the relative Chapter and Section notes also apply, unless the context otherwise requires. The said rule is self-explanatory. The reference to Chapter notes and Section notes has been placed at last. In the present case the provisions of Rule 2, 3 or 4 are not attracted because the Chapter Sub-heading 56012110 52030000 specifically provide for the classification of goods in question without any exclusion. I further observe that my above said findings also get support from the findings of Hon ble Supreme Court in the case of Moorco (India) Ltd. v. Collector of Customs, Madras - 1994 (74) E.L.T. 5 (S.C.), which have also been relied upon by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant being specifically provided for by 90.24, the accessory imported by the appellant which was solely used for manufacture of it was liable to be classified on the same rate as the item in which it was used, namely, flow meter. The findings above clearly lay that the specific will prevail over the general. I notice that the Adjudicating Authority has referred the said judgment in the order but the same has not been appreciated in right perspective. The following case law has further strengthened my views. The findings given by Hon ble Supreme Court in above Case have further been relied by Hon ble Tribunal while deciding the case of Commissioner of Central Excise v. SPM India Ltd. 2007 (211) E.L.T. 573 (Tribunal) relating to classification in a similar situation. After relying the case law in the case of Moorco India (supra) it has been held that When there is a specific entry, there is no need to come to residual entry preferred by the Revenue. Hon ble High Court Allahabad in the case of Superintendent Central Excise v. Vacmet Corporation Pvt. Ltd. has also affirmed my view and has held that When an article falls within specific entry such goods must necessarily be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
