G.S. Auto International Ltd vs Collector Of Central Excise Chandigarh on 15 January, 2003
In G.S. Auto v. Collector of Central Excise, 2003 (152) ELT 3 (SC), the
Supreme Court has held that in the matter of classification of goods, the
proper test to be applied is not the functional test (i.e. the function which the
product performs) but the test of commercial identity. In determining
whether the goods fall under a particular entry or not, the Court should
consider how the goods are known and are classified by the men usually
dealing or trading in the said product. In the present case, the catalogues of
international manufacturers of repute show that similar goods are classified
as fibre tip pens / disposable pens. The goods are exported by the petitioner
by branding them as "fibre tip pens" in the export bills and are accepted by
the purchasers as such. In the affidavit in reply dated 26th November 2008
filed on behalf of the respondents by Mr. V.S. Wayal, Assistant Commissioner
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of Customs, he has annexed a copy of a copy of a literature/brochure relied
upon by the respondents. The brochure firstly describes what are disposable
pens and how they help trim operating costs. Then drawings of such
disposable pens are given at pages 111 to 113 (internal pages 5 to 7 of the
affidavit) of the compilation. It is thus clear that even the respondents
construed this product as "pens" (i.e. writing instruments) but seeks to
exclude them only on the ground that they are not used by hand. We do not
find any justification for applying the test of use by hand for determining
whether the petitioner's product is "fibre tip pens". In our opinion, the
respondents applied the test which is unsustainable in law for holding that
the petitioner's product was not "fibre tip pens".