Advocated By :   Shri B.N. Chattopadhyay, Consultant, for the Appellant.

Shri R.K. Roy, JDR, for the Respondent.

[Order per : Dr. S.N. Busi, Member (T)]. - The issue for consideration is whether “typing correction instrument in the shape of a pen” is classifiable as “stationery article” under ITC (HS) Exim Code No. 39261009.10 as claimed by the appellants, or as “other residual products of the chemical and allied products industry of a kind classified as consumer goods” under the Exim Code No. 38249029.80, as held by the Revenue.

2. After hearing the learned Consultant for M/s. Line Writing Aids (P) Ltd., Calcutta and Shri R.K. Roy, learned JDR for the Revenue, the order impugned was set aside and the appeal was allowed. Now we proceed to record the reasons for allowing the appeal.

3. The appellants have imported 3120 dozen “type error correction instruments” of Japanese origin and filed B/E No. 1432 dated 23-7-1996 for their clearance. On inspection of the representative sample, the same was found to be of a type of white thick pen and marked with the description of the body of the pen “Uni Correction Pen”, “Rolling Ball Metal Tip”. A clip was found to be attached with the pen and by pressing the plastic tube attached with the pen, a white substance comes out through a steel ball point. The Customs felt that the same was not meant for writing as ball point pen but could be used as a corrective instrument for correction of typing error. As such, the Customs opined that a correction pen and consumer goods would be correctly classifiable under 38249029.80 of the ITC (0HS) classification and being a restricted item required import licence. The Customs did not find the Special Import Licence No. 2143510/C/XX/38, dated 12-2-1996 and 2402901 dated 10-7-1996 submitted by the appellants valid for clearance of the said goods. The appellants explained to the Customs that the item imported by them was “office stationery, i.e., type error correction instrument in the form of pen” and, therefore, should not be treated as a pen. They further explained that as the instrument was meant for correcting any typing mistakes only, it could not be treated as a writing instrument. They, therefore, sought release of their consignment against their Special Import Licence furnished in terms of the provisions of Appendix - XXXV, Sl. No. 57 of the Hand Book of Exim Policy 1992-97. Notwithstanding the above explanation, the Additional Commissioner in his Order No. 36/96 (Addl. Commr.) dated 14-8-1996 held that the item was appropriately classifiable u/h 38249029.80 and as such, required a specific licence which the appellants failed to produce. Hence, he ordered confiscation of the goods u/s 111(d) of the Customs Act, 1962 but gave option to redeem the same on payment of a fine of Rs. 2 lakh and further imposed penalty of Rs. 10,000/-. As he appellants failed to succeed at the first appellate stage, the present appeal has been filed before the Tribunal.

4. Shri B.N. Chattopadhyay, learned Consultant appearing for the appellants, submits that the Commissioner (Appeals) erred in holding that the typing error correcting pens are covered by ITC (HS) No. 38249029.80 as “other residual product of the chemical and allied products of an industry of a kind classified as consumer goods”. He argues that the impugned goods are known in the trade parlance as “stationery articles” and not as the “products of chemical and allied products”. It is well settled principle of law that goods are to be classified as are known in the trade parlance. He argues that Commissioner (Appeals)’s reliance on HSN is misplaced as it is improper to rely on the HSN when the Customs Tariff and the HSN do not correspond in all respects. He points out that the Customs Tariff heading 38.24 does not correspond with that of 38.23 of the HSN and sub-heading No. 3824.71 and 3824.79 of the Customs Tariff are not found in the HSN. He further argues that the learned Commissioner (Appeals) failed to appreciate that within the purview of “other supplies of the kind classified as stationery other than pins, clips and writing instruments” falling under ITC (HS), typing error erasing pens are included. In the terminology of “stationery”, pens, clips and writing instruments have been deliberately excluded. Pins and clips are covered by Customs Tariff Heading No. 73.19. Writing instruments are covered by the heading 96.08 of the Customs Tariff . But they are office stationery in terms of Code No. 39261009.10 of the ITC (HS) classification. However, they have been specifically excluded from the said Code Number. But “typing error correction instruments” in the form of pens being office stationery have not been excluded from Code No. 39261009.10. As such, contends the learned Consultant, the same are covered by the said Code No. covering the “office stationery” which expression has been used in the ITC (HS) Classification in a broader sense and includes various items covered by different headings of the Customs Tariff. As the “typing error correction pens” are not specifically excluded from the ITC (HS) No. 39261009. 10 as is done in respect of “pins, clips and writing instruments”, the same shall be appropriately classifiable under 39261009.10. He pleads that even if there is a scope for dispute in the wordings of the Code No. 39261009.10, the goods cannot be confiscated and penalty imposed.

5. Shri R.K. Roy, learned JDR appearing for the Revenue reiterates the reasoning contained in the order impugned.

6. We have carefully considered the arguments advanced from both sides. We are unable to subscribe to the view of the Commissioner (Appeals) that by reason of the goods being classifiable u/s.h. No. 3824.90 of the Customs Tariff, the same shall be automatically placed in the Exim Code No. 38249029.80 of the ITC (HS) Classification. A careful reading of the Exim Code No. 39261009.10 reveals that it encompasses various items falling under different Customs Tariff Headings. Therefore, it cannot be said that simply because the subject goods merit classification u/s.h 3824.90, the same must necessarily to be held to fall in the Exim Code No. 38249029.80 when the subject goods are capable of being categorised as “office stationery” for which there is an omnibus Exim Code, i.e., 39261009.10. In view thereof, we fully agree with the arguments advanced by the learned Consultant. Accordingly, we hold that for the purpose of ITC (HS) Classification, the “type correction instrument in the shape of a pen” merits to be categorised as “office stationery” and consequently classifiable under the Exim Code No. 39261009.10. In view thereof, no specific import licence is required in respect of the same. Hence, the confiscation of the goods and imposition of penalty on the appellants must be held to be unwarranted and unjustified. Accordingly, we set aside the impugned order with consequential relief to the appellants.

7. The appeal is thus allowed with consequential relief to the appellants.

Equivalent 2001 (131) ELT 0166 (Tri. - Kolkata)

Equivalent 2001 (042) RLT 0072