9911796707
TMI Blog2023 (8) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner is holder of 'Import Export Code' and is stated to be a regular exporter of CP Sanitary Bathroom Fitting in brass (Basin Mixer, Bath Mixer, Sink Mixer etc.), commonly known as sanitaryware under All Industry Rates Drawback Scheme [AIR DS]. It is stated that the subject goods are made of more than 90% brass and are chrome plated and are exclusively used in bathroom, kitchen etc. Suffice to state that after effecting the export of the consignment, the petitioner had claimed duty drawback @ 11% or Rs. 83 per kg (whichever was lower) on 07 September 2011, by classifying the goods under drawback heading No. 741902 Customs Tariff Act, 1975, as amended upto date [CTA], while on the other hand, the Department asserted that the goods would be covered under sub heading 848180 of the 'CTA' thereby attracting drawback @ 7.3% or Rs. 43.10 per kg. It was further alleged by the Department that the petitioner had deliberately classified the goods in question under Chapter heading No. 7419 with the sole intention of availing extra drawback, and thus, the petitioner had contravened the provisions of Section 75 of the Act read with Customs Central Excise Duties and Service Tax Drawback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sionary Authority found that the view was supported by the Explanatory Notes for Chapter heading 8481, which provides as follows: "In general, taps, valves, etc., are of base metal or plastics, but those of other materials (other than unhardened vulcanized rubber, ceramics or glass) are also covered by the heading. (12) Mixing taps and valves with two or more inlets and a mixing chamber. The heading also covers thermostatically controlled mixing valves incorporating an adjustable tension thermostatic element, which actuates the plugs or stoppers regulating the admission of fluids at different temperatures into the mixing chamber......." 6. The impugned order dated 08 July 2022 has been assailed by filing the instant Writ Petition inter alia on the grounds that even before issuance of the Show Cause Notice, although the Department had found that the consignment contained sanitary wares and articles, it had adjudicated that the articles were essentially mixers of different kinds classifiable under Chapter heading 8481 of the CTA; and that the Revisionary Authority passed the impugned order in a mechanical manner, failing to conduct any independent analysis or assign reasons for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brochures/catalogues submitted were not decisive to permit a divergent classification; and the petitioner did not render correct classification of the goods in the shipping bills and hence drawback applicable to the product exported came under item No. 848101 of the Drawback Schedule. It was further stated that General Interpretative Rules (GIR) are to be applied for interpretation of Tariff and as per Rule 1, the titles of Sections and Chapters are provided for ease of reference only; and for legal purposes, classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes. It was further submitted that Section XV covers Chapters 72 to 83 and Section XVI covers Chapter 84 and 85. Section note l(f) of Section XV of the Customs Tariff reads as follows: "this Section does not cover articles of Section XVI (machinery, mechanical appliances and electrical goods)" Further Chapter heading of Chapter 84 read as follows: "Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Part thereof" And description of goods under Chapter heading 8481 of the Customs tariff reads as "Taps, cocks, valves and similar appliances for pipes, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 120% 0.02% 21.8% 741902 Artware/Handicraft of copper Kg 0.11% 145% 0.02% 26.4% 12. Further, the item 'sanitaryware' is specifically described in Section XIII of Chapter 28 vide item No. 68159920. Section XVI in Chapter 84 of the CTA is titled as "Nuclear Reactor, boilers, machines and mechanical appliances; and parts thereof" and the relevant subheading 8481 is tabulated as under: Tariff item Description of goods Unit Drawback when cenvat facilities has not been availed Drawback when cenvat facilities has been availed Drawback Rate Drawback cap per unit in Rs. Drawback rate Drawback cap per unit in Rs. 1 2 3 4 5 6 7 848102 Valve for LPG Cylinder, Hand Wheel type, made of Brass Kg 0.066% 60% 0.02% 18.2% 848103 Industrial valves (cast or forged body) 0.02% 0.02% 848104 Valves of Brass/Gun metal Kg 0.066% 60% 0.03% 27.3% 13. A careful perusal of the clause in Rule 1(d) of Chapter 84 manifests that there is specific exclusion of the category of goods dealt with under original heading of 7321 or 7321 or similar articles of other base material in chapter 74 to 76 or 78 to 81. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner pertaining to use or application in "nuclear reactors, boilers, machineries and appliances". The respondent has clearly overlooked even the brochures pertaining to the items that amply demonstrates the essential features of the sanitary wares and use of brass so as to make the articles more elegant and durable for the use of end consumers. 17. It is apparent that the respondent in a mindless manner has failed to even consider the common parlance and manner in which the articles are known, bought and sold in the marketing world. In the cited case of O.K. Play (India) Pvt. Ltd. (supra), the assessee was engaged in the manufacture of toys and he cleared certain items viz., Activity Desks and Chairs, Fun Fliers, Play Table, Play Pool, Rockers, Slides and Swings without payment of duty claiming exemption from payment of excise duty under chapter Heading 95.03. The Department sought to penalise the assessee for importing rather furniture items suffixing the items with the word 'baby' so as to claim that the items were 'toys'. The Supreme Court agreed with the plea of the Department that the mere fact that an article was meant for exclusive use of children would not place it in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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