Customs, Excise and Gold Tribunal - Mumbai
Collector Of Customs vs East Punjab Traders on 4 January, 1991
Equivalent citations: 1992(38)ECR600(TRI.-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. This is an appeal from the Collector of Customs, Bombay directed against the order of the Collector (Appeals) bearing No. 1166/90 BCH dated 7.8.1990. The Collector (Appeals) in the aforesaid order while upholding the classification of the imported goods under heading 9616.10 of the Customs Tariff as was held by the Dy. Collector of Customs, had held that the impugned goods are not consumer goods in terms of entry No. 145 Appx. 2 Part B of the AM 88-91 but are covered by entry No. 5 87A of Appx 3 Part A of the aforesaid Policy and directed for consideration of the additional licence reportedly held by the Respondents covering the entries in Appx. 3A (No. 587A of Appx. 3 Part A).
2. The facts for purpose of disposal of the appeal can be stated as below:
The respondents imported 'Sprayer heads' for bottles and claimed clearance against the entry No. 587A, which reads "Plastic extruder moulded/fabricated components or products". They have also claimed assessment under Tariff Heading 8424.20 of the Customs Tariff. On examination, the goods were found to be composite article made of plastic and metallic parts having a spray mechanism for spraying liquids. It was also found to be suitable for fitment as a mount on any bottle suitable for P.P. Cap and is suitable for spraying of liquids and toilet sprays. It was, therefore, alleged that the imported goods would not merit clearance under No. 587A of Appx. 3 Part A. It was also alleged that it is a ready utility item and hence categorised as a consumer item, hit by entry No. 145 of Appx 2 Part B of AM 88-91 and hence it is not eligible for clearance against the additional licence. The Department also objected to classification under C.T.H. 8424.20, since the classification must be only under C.T.H. 9616.10. In the adjudication proceedings held by the Dy. Collector assessment under C.T.H. 9616.10 was confirmed. It was also held that the goods cannot be cleared against the additional licence covering sr. No. 587A of Appx. 3 Part A. Hence the goods were ordered confiscation but allowed redemption on payment of fine of Rs. 1,44,000/-. When the matter was taken in appeal before the Collector (Appeals), while the classification order by the Dy. Collector was confirmed, the respondents were given the benefit of availment of the additional licence covering sr. No. 587A of Appx. 3 Part A.
3. Before going into details of the appeal, it would be necessary to set out the following position:
Shri Nankani, on behalf of the respondents, while opposing the stay application filed by the Department, submitted that they have not challenged the classification confirmed by the Collector (Appeals) and they have not filed any appeal against the same. Hence, the matter is only relating to consideration from the ITC angle. It is also to be mentioned that the additional licence claimed to be available with them have not been produced before us. Even the Collector (Appeals)'s order only directs consideration of this licence purporting to cover Appx. 3A items.
4. Shri Arya, the ld. SDR contended, by producing a sample of the product imported that the item is not wholly or exclusively made of plastic. It is to be fitted with a reservoir and is a complete sprayer head. He also referred to the sale literature of the very same product to show that it is described as multi purpose sprayer and the goods imported is multi purpose sprayer head. This item is sold in complete set with bottle or without bottle as is evident from the sale catalogue. Since it is a composite article, it cannot be construed as plastic extruder moulded/fabricated components or products. Hence, it cannot be said to be figuring in Appx. 3 Part A. He also contended that even if it is held to be figuring in Appx. 3A against sr. No. 587A, it is a consumer item ready to use as such by fitting into any bottle for P.P. Cap and its use is a multi purpose one and hence directly goes for consumption by the consumers. It does not need any processing. It, therefore, comes in the category of consumer goods and hence hit by sr. No. 145 of Appx. 2 Part B. He also contended that the respondents, having accepted the classification under C.T.H. 9616.10 applicable to scent sprays and toilet sprays, cannot get the benefit under ITC angle; because as per the Import Trade Control Order, Tariff heading under the Customs Tariff would also be applicable to the items mentioned in the Import Trade Control schedule. Once the classification under 9616.10 is accepted, it automatically follows that the goods are not eligible to be construed as plastic moulded items for purpose of ITC policy.
5. Shri Nankani on the other hand contended that only rivet and springs are extraneous materials other than plastic in the items imported. It has been held by the Special Bench in the case of Nikon Systems (P) Ltd. that the plastic cabinet for T.V. sets with metal screws would be construed as plastic moulded components or products. He also contended that sr. No. 587A covers not only components but also products. The term 'product' is wider in its ambit to cover even composite products like this. He also cited the decision of this Bench (single Member), wherein it has been held that the very same item, sprayer head, has been accepted as plastic moulded/extruder components or products and on that ground upheld the order of confiscation passed by the Dept. However, in that case decided by this Bench, the issues are not identical. There, the claim was made for clearance under OGL and the Department held that plastic extruder, moulded components are figuring at Appx. 5 sr. 500 and hence they cannot be permitted for import. In this case, they are holding additional licence permitting Appx. 3A items. Since as per the aforesaid decision, this can be construed as plastic extruder moulded components or products, the goods are to be allowed against the additional licence covering Appx. 3 items.
6. He also contended that it is not a consumer item. According to definition of consumer goods, it would mean consumption goods which can directly satisfy human needs without further processing. In this case, it cannot go into consumption directly, it has to be fitted with a bottle or a container. Hence, it cannot be construed as a consumer goods. On this, a query was put to him; as to whether safety razor blade could be construed to be consumer items or otherwise, he agreed that it is a consumer item, since it can be used as such for cutting purpose. He also cited the decision of the Tribunal in the case of Resham Singh Brothers Cegat WRB wherein it has been held that tyres and tubes for commercial vehicle cannot be held to be consumer goods. He also referred to para 21(C) of ITC Policy and contended that sr. 587A of Appx. 3A is an item with a specific description of plastic moulded extruder components or products, which will prevail over an item with a generic description against sr. No. 145 of Appx. 2B. Acceptance of the classification does not in any way affect the ITC angle. The classification has been held on following the rules of interpretation of Chapter notes. It is not the case of the Department that multi purpose sprayer head is specifically mentioned in the ITC schedule for purpose of holding the Customs tariff classification against them from ITC angle.
7. After hearing both the sides, we find that the short points to be looked into in this appeal are;
(i) whether the items imported could be construed to be covered by sr. No. 587A of Appx. 3 Part A;
(ii) whether it could come within the purview of consumer items hit by sr. No. 145 of Appx. 2 Part B; and
(iii) whether sr. No. 587A is a specific entry covering the goods imported and it will prevail over the entry against sr. No. 145 of Appx. 2 Part B.
8. After carefully considering the arguments on both the sides, we find that as per the citations made by the learned advocate in the case of Nikon Systems (P) Ltd. Cegat SB-A and also the decision of this Bench (Single Member) in order No. 569-572 dated 22.6.1989, it was held that even such articles with some metallic screws or rivets could be construed to be plastic extruded/moulded components or products. Hence, there is no reason for us to differ from the view taken for applying the ratio to the present case. All the same, in this case, there is a specific allegation that the goods are consumer items and cannot be imported because of the entry No. 145 Appx. 2 Part B. Hence, we consider it necessary to treat this as a major issue to be decided in this appeal.
9. 'Consumer goods' as per the definition contained in the Import Policy means-" consumption goods which can directly satisfy human needs without further processing, it would include consumer durables also". This is a specific definition given under the Policy and this would be available for interpretation of sr. No. 145 of Appx. 2 Part B. sr. No. 145 Appx. 2 Part B reads-" All consumer goods however, described, of industrial, agricultural or animal origin, not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence".
10. The main contention of Shri Nankani is that it is only a head for spray. Absence of a bottle is great impediment and without the presence of bottle, it is not an item of consumption nor it can directly go into consumption without fitment to a bottle, and hence it cannot directly satisfy the human needs. Though no further processing is called for, it cannot be used as such without fitment to the bottle and hence it is not a consumer item. We are unable to appreciate this argument, mainly, for the reason that the sale catalogue described it as a multi purposes sprayer and the item imported is a head for multi purposes sprayer. It is also observed that the sale is offered in complete set including bottle as also head separately. Thus the marketing of the item is done individually and also as a composite unit with bottle. It is also specifically alleged that any person having a bottle of the required size for fitment to the PP Cap can fit this sprayer heads for use. Hence, for getting a toilet sprayer or scent sprayer or (garden sprayer as is claimed by the respondents), what is required is the sprayer head essentially and it can be fitted to any bottle with the circumference of the PP Cap. In this view of the matter, it goes directly for satisfying the human need. Any person having a bottle can go for sprayer head. It is also not disputed that the head itself needs no further processing before fitment to the bottle. Hence, we are of the view that it is specifically covered in the Import Policy as a consumer goods, since it goes directly to the consumption. We also take the opportunity to draw parallel from analogous goods like safety razor blade, sewing machine needles etc. We also put the query with regard to the safety razor blades. Though these blades cannot be directly used for the purpose, it is intended for without attachment to safety razor, it is admittedly an item of direct consumption and it is marketed as a consumer product. It is needless to purchase the safety razor, while purchasing these blades. Sometimes they are sold with blades and blades are also sold separately as consumer goods. Likewise, in the case of sewing machine needles, those who have machines already, purchase needles as a direct consumption item. Likewise, in this case, those who have bottle or container ready for fitment, purchase only sprayer heads. Thus the impugned goods is more comparable to these goods like safety razor blades rather than tyres and tubes referred to by the learned advocate.
11. Now the question that is to be looked into, is, whether, sr. No. 587A is specifically covering this item and hence would get excluded from the purview of sr. No. 145 Appx. 2B. Shri Nankani contended that since plastic extruder moulded components or products are specifically covered under Appx. 3A, sr. 587A, it gets excluded from sr. No. 145A Appx. 2B. We are unable to agree with this preposition, mainly because of the fact that sr. No. 587A reads-"Plastic extruded moulded/fabricated components or products". Under this umbrella a wide assortments of goods can come. As seen from the citation made by the Id. advocate himself, it covers even plastic cabinets for T.V. set. In these circumstances, we are unable to agree with him that sr. 587A is an entry for a specific item. Even as para 21-(c) an item with a specific description in Appx. 2 Part B or Appx. 3 Part A will prevail over an item with a generic description in any of these Appendices. As per para 21(d)-an item with a generic description in Appx. 2 Part-B will prevail over an item with a generic description in Appx. 3 Part A. Shri Nankani referred to only para 21(c) for purpose of interpretation. We are of the view that sr. No. 587A is not a specific entry covering the item imported. It is a generic item covering a wide assortment of plastic extruded/moulded goods. Though S.No. 145A of Apx. 2 Parts is also a generic entry, as per para 21(d), the item with generic description in Appx. 2 Part B will prevail over an item with generic description of Appx. 3 Part A. Thus applying the principle laid down in para 21(d) of the Import Policy and especially in the context of the specific definition for "consumer goods", we have no hesitation to hold that sprayer head, which directly goes to satisfy human needs, being a consumer item, would prevail over the generic description of plastic moulded/extruded components or products. In this view of the matter, we uphold the order of the Dy. Collector of Customs, holding the goods liable to confiscation. The Collector (Appeals) has erred in not taking into account the aforesaid factors but has merely held that sprayer head without a bottle is not a consumer item, since it cannot be used as such. The Dy. Collector has clearly indicated that the item as such can be purchased and it can fit into any suitable bottle for spraying liquids. These contentions are not rebutted even at this stage before us. Shri Nankani pleaded as an alternative argument that in any case, if the Department's appeal is accepted by this Bench, the redemption fine imposed to the extent of 150% is excessive and harsh and taking into account the heavy demurrage charge consequent on the delay in adjudication, suitable relief may be given. Taking note of this argument, while upholding the order of confiscation of the impugned goods and setting aside the order of the Collector (Appeals) on the ITC angle, we would deem it proper to direct the Department to permit the respondents to redeem the goods on payment of fine of Rs. One lakh only.
12. The appeal from the Department is allowed subject to the aforesaid modification in the quantum of redemption fine.