TMI Blog2020 (10) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Interpretation are not intended for resolving difference of opinion between importer and assessing officer but for guiding the assessing authority in clarifying for itself when in doubt over two headings. From the impugned order, the adjudicating authority did not appear to have been beset with such dilemma. Furthermore, the said Rules, except for rule 6, are concerned with headings and hence the first mandate to an assessing authority is to determine the appropriate heading at the four-digit level. Thereafter, the six-digit and eight-digit level are to be ascertained with reference to the descriptions. The deemed erasure of any other heading thereafter precludes comparison with any tariff item that is not within the determined sub-heading. Hence, the rival entries must lie within the same group. Under the primary residuary grouping at the - level, the distinction among the three sub-headings is determined by the incorporation of refrigerating unit , at the first instance, in air conditioning machines and the incorporation of valve for reversal of heat or cooling cycle subsequently. As these sub-headings and tariff items within the residuary category are so disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (AR) for the respondent ORDER The appellant, M/s International Aircon Pvt Ltd, is a distributor of Mitsubishi air-conditioners and, having effected imports against bills of entry no. 9062207/28.04.2015, 9055056/27.04.2015, 9059263/28.04.2015 and 9059428/28.04.2015 of which the first three, upon examination, were found to be at variance with declaration that these were all capable of cooling only, came under wider investigation of imports of like description carried out at Jawaharlal Nehru Port Trust, Air Cargo Complex, Mumbai, Kolkata Port and Inland Container Depot, Ahmedabad culminating in issue of notices dated 25th April 2016 and 9th August 2016 that were adjudicated by common order-in-original no. 30/2017-18/Commr/NS-V/CAC/JNCH dated 12th July 2017 of Commissioner of Customs (NS-V), Jawaharlal Nehru Custom House, Nhava Sheva that is impugned before us. 2. In the bills of entry pertaining to the live consignments, several model variants of air-conditioners, valued at ₹ 55,71,557, the benefit of notification no. 85/2004-Cus dated 31st August 2004 (at sl no. 49), exempting all goods under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order to the detriment of the appellant herein. 5. It is common ground that heading no. 8415 of the First Schedule to Customs Tariff Act, 1975 covers the entirety of air-conditioners of every kind corresponding to description as Airconditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated and apt for the technology that drives such equipment. While split system is the description that attaches to tariff item no. 84151010 of the First Schedule to Customs Tariff Act, within the group described as window or wall types, self-contained or split system corresponding to sub-heading no. 841510 (at six digit level) of the First Schedule to Customs Tariff Act, 1975, split air-conditioner two tonnes and above are descriptions found corresponding to tariff item no. 84158110, 84158210 and 84158310 of the First Schedule to Customs Tariff Act, 1975 with the residuary described as others in tariff item no. 84158190, 84158290 and 84158390 of the First Schedule to Customs Tariff Act, 1975. These first and last pairs of descriptive dichotomies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uipment were additional evidence since these would, invariably, have had heating capability. Concluding that these machines were capable of both heating and cooling, he submits that the adjudicating authority had correctly held such to be outside the scope of classification under tariff item no. 84151010 of the First Schedule to Customs Tariff Act, 1975 as the corresponding description did not provide for such an option for wall mounted split systems with consequent shift of classification. He points out that the adjudicating authority had followed the generally accepted principle of most apt description which, according to him, is the one which specifically refers to split air-conditioner against tariff item no. 84158110 or 84158190 of the First Schedule to Customs Tariff Act, 1975. 8. Learned Authorized Representative also points out the appellant could not, by any stretch of imagination, have sought to classify ceiling mounted split systems or the ceiling suspended split systems under heading no. 84151010 of First Schedule to Customs Tariff Act, 1975 which corresponds only to wall or window in the description besides the further infirmity of having incorporated op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule to Customs Tariff Act, 1975, which has elaborated upon sub-heading no. 841510 giving extensive scope for appreciation of split systems specifying even ceiling as the location of the indoor unit while excluding ducted central air-conditioning systems. 13. Learned Authorized Representative also submitted that the appellant could not be allowed to claim that the misdeclaration was bona fide. He placed reliance on the decision of the Tribunal in Hotline CPT Ltd v. Commissioner of Central Excise, Indore [2016 (333) ELT 356 (Tri-Del)], of the Hon ble High Court of Bombay in McKinsey Co Inc v. Commissioner of Central Excise [2019 (20) GSTL 198 (Bom)] and of the Hon ble Supreme Court in Commissioner of Customs (Preventive) v. Afloat Textiles (I) P Ltd [2009 (235) ELT 587 (SC)] to support this contention. 14. The argument of Revenue that the expansion of the description corresponding to tariff item no. 84151010 of the First Schedule to Customs Tariff Act, 1975, by Finance Act, 2016 is demonstrative of legislative intent to classify ceiling mounted and ceiling suspended air-conditioning units in other sub-headings does not find favour with us. That would have been acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng no. 841581 and not under sub-heading no. 841583. Furthermore, in re ETA General Pvt Ltd, the classification that was adopted by the assessing authority, and approved by the Tribunal, finally zeroed in on a sub-heading that explicitly excludes refrigerating unit which renders it inapplicable as a precedent for deciding this appeal. 16. It is not the problem of fitment within the description corresponding to the sub-headings that has generated this dispute; it was the availment of the privilege afforded by notification no. 85/2004-Cus dated 31st August 2004 which, at sl. no. 49, exempts all goods classifiable under heading no. 841510 of the First Schedule to Customs Tariff Act, 1975 from levy of basic customs duty. The adjudicating authority appears to have accepted the convenience of ready fitting descriptions at the eight digit level of tariff items to be in consonance with the mandate of rule 3 of General Rules for Interpretation which alludes to the most specific description being preferable to a general description. The primary influence was the availability of heating and cooling options in the wall mounted type and the location of the indoor unit on the ceiling which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only is such an exercise bereft of logic but is also inconsistent with The General Explanatory Notes to Import Tariff which lays down the hierarchical precedence, and significance of - , - - , and - - - in the second column of the Schedule. 18. Under the primary residuary grouping at the - level, the distinction among the three sub-headings is determined by the incorporation of refrigerating unit , at the first instance, in air conditioning machines and the incorporation of valve for reversal of heat or cooling cycle subsequently. As these sub-headings and tariff items within the residuary category are so distinguished and the expression refrigerating unit is not defined, it cannot be supposed that it refers to the cooling unit for if it did, the first heading would have no place within the description of air conditioning machines . It, therefore, is intended for some component other than the normal cooling facility built into all air conditioning machines and, by not subjecting that expression to the test of existence in the impugned goods, the show cause notice has tripped upon itself in its haste to carry the impugned goods beyond the scope of eligibility ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
