2004(02)LCX0026

IN THE CESTAT, SOUTH ZONAL BENCH, BANGALORE

Justice K.K. Usha, President and Shri K.C. Mamgain, Member (T)

EUREKA FORBES LTD.

Versus

COMMISSIONER OF CUSTOMS, BANGALORE

Final Order No. 838/2004, dated 26-2-2004 in Appeal No. C/34/99

Cases Quoted

Ingersoll-Rand (India) Ltd. v. Collector — 1988(06)LCX0062 Eq 1989 (039) ELT 0454 (Tribunal) — Referred..... [Para 2]

Karnataka Umbrella Manufacturers v. Collector — 1998(09)LCX0152 Eq 1999 (108) ELT 0216 (Tribunal)  — Referred [Para 2]

Nat Steel Equipment Pvt. Ltd. v. Collector — 1988(01)LCX0006 Eq 1988 (034) ELT 0008 (S.C.) — Distinguished [Paras 2, 3]

Viswa & Co. v. State of Gujarat — 17 STC 581 — Relied on................................................ [Para 3]

Advocated By :        Shri Rajesh Chander Kumar, for the Appellant.

Shri Kumar Santosh, SDR, for the Respondent.

[Order per : Justice K.K. Usha, President]. - In this appeal at the instance of the assessee challenge is against the order passed by the Commissioner (Appeals), dated 5-11-1998. One of the issues arising for consideration relates to classification of vacuum cleaners imported by the appellant under Bills of Entry No. 01561, dated 17-8-1998 along with other accessories. The appellant was classifying the vacuum cleaners under chapter sub-heading 8479.89 as Machines and mechanical appliances of the Schedule to the Customs Tariff Act, 1985, whereas the customs authorities sought to classify the same under 85.09 as Electro-mechanical domestic appliances. The adjudicating authority as well as the appellate authority rejected the contention raised by the appellant that the vacuum cleaners are industrial vacuum cleaner and therefore would come under 8479.89. It was also held that since the goods come under 85.09 it requires import licence being consumer goods falling in the restricted category. Adjudicating authority passed orders to confiscate 58 items of appliances classifying under sub-heading 85.09 and a redemption fine of Rs. 4,50,000 was imposed. Penalty was also imposed to the extent of Rs. 50,000 under Section 112 of the Customs Act. Commissioner (Appeals) upheld the above finding both on classification as also on confiscation.

2. Appellant contended that vacuum cleaners imported by them are of higher capacity and having special features required in the industrial establishment. According to the appellant the Commissioner has wrongly applied the ratio of the decision of the Supreme Court in the case of Nat Steel Equipment Private Ltd. v. Collector of Central Excise - 1988(01)LCX0006 Eq 1988 (034) ELT 0008 (S.C.). It is further contended that the appellant was under the bona fide belief that the correct classification of the goods was under Chapter Heading 8479.89 and without requiring any import licence. Under these circumstances, it is submitted that no order should have been passed to confiscate the goods. Redemption fine and penalty are also not warranted. In support of the above contention, the appellant placed reliance on two decisions of this Tribunal in Ingersoll-Rand (India) Ltd. v. CCE - 1989 (039) ELT 454 and Karnataka Umbrella Manufacturers v. CC, Bangalore - 1999 (108) ELT 216.

3. It is true that the decision of the Supreme Court in Nat Steel Equipment Private Ltd. v. C.C.E. was rendered while considering the Item 33C of the old Tariff and the Explanation thereto, but the ratio of the decision was that for an item to come under domestic electrical appliances it need not be one actually used in home or house. It must be of a kind that is generally used for household purpose. Reference was also made to the decision of the Gujarat High Court in the case of Viswa & Co. v. The State of Gujarat (17 Sales Tax Cases 581) rendered by Bhagwati, J as Learned Chief Justice then was. It was held in the above case as follows :

“A domestic electrical appliance, in our opinion, would be an electrical appliance of a kind generally used for domestic purposes. It may also be used at places other than the home or the house, but that would not destroy the character of a domestic electrical appliance which attaches to it by reason of its being a kind of an electrical appliance generally used for the household. There are several electrical appliances, which are generally used in the household, such as electric irons, electrical sewing machines and electrical cooking-ranges which are also used in other establishments. But these electrical appliances do not therefore cease to be domestic electrical appliances. It is of course not necessary that an electrical appliance, in order to satisfy the description of a domestic electrical appliance, must be actually used in the home or the house. What is necessary is that it must be of a kind which is generally used for household purposes and if that test is applied, there is no doubt that electric fans are domestic electrical appliances and the Tribunal was therefore right in holding that they fall within entry 52 of Schedule B.”

4. Even going by the HSN Explanatory Notes relied on by the appellant we do not find that the relevant goods can be classified under Chapter Heading 8479. On going through the catalogue in respect of the relevant goods we are in full agreement with the Commissioner (Appeals) that the material in the catalogue would not show; that the goods are intended to operate at a level in excess of household requirement.

5. We therefore hold that the authorities below have correctly classified; the goods under Chapter Heading 8509 but we find merit in the contention of the appellants that if similar goods were being cleared for home consumption by the Customs Department accepting classification under 8479.89 then confiscation, imposition of redemption fine and penalty would not be justified. But apart from such a contention taken in the Memo. of Appeal we do not find any material to show that, as a matter of fact, identical goods were imported on earlier occasion and were classified under 8479.89.

6. Under these circumstances while affirming the classification of the goods under 8509 we remand the matter to the adjudicating authority for examining the question whether identical goods were imported on earlier occasion by the appellants and its classification under 8479.89 was accepted by the Customs Department. It will be open to the appellants to produce relevant evidence in support of the above contention.

7. The appeal stands disposed of with the above direction.

Equivalent 2004 (170) ELT 325 (Tri. - Bang.)