The Hindu Business Line : `Misplaced' CD towers & displaced buffaloes

THE case of Asian Plastics that came up before the Mumbai tribunal recently was an unusual one, though the dispute with the taxman was about the much too common classification issue.

The company wanted to classify its products - CD towers and audiocassette stands - under Chapter 39 as household articles of plastics, but excise officials thought that 94.03 would be the right heading for the goods.

Chapter 39 is titled `plastics and articles thereof, rubber and articles thereof', while 94 is about `miscellaneous manufactured articles'. Heading 94.03 reads `other furniture and parts thereof'.

Jyoti Balasundaram and M. Moheb Ali heard the case and observed that Note 2 to Chapter 94 of the Central Excise Tariff Act states that articles referred to in heading 94.01 to 94.03 (covering seats, medical, surgical, dental or veterinary furniture and other furniture) are to be classified in those headings only if they are designed for placing on the floor or ground. "Items in dispute are not such as are designed for placing on the floor or ground," reasoned the tribunal.

But the Revenue had depended on what the said Note 2 says further on: that `the following' are to be classified under 94.01 to 94.03 "even if they are designed to be hung, to be fixed to the wall or to stand one on the other"; and the list mentioned (a) cupboards, bookcases, other shelved furniture and unit furniture; and (b) seats and beds. CD towers and cassette stands in dispute can be kept on top of furniture such as table, argued the Department.

"Misplaced," said the tribunal about such an argument, because "the items in dispute cannot be considered to be of the description either of cupboards or bookcases or other shelved furniture and unit furniture."

Accordingly, the decision went in favour of Asian. And there was more.

"The demand is also not sustainable for yet another reason," said the tribunal, pointing out that it was barred by limitation, and chiding the Department for not making necessary enquiries when they had doubt as to what kind of household article Asian's product was.

Another case that came up before S.S. Sekhon and T. Anjaneyulu of the tribunal was that of C. Natwarlal and Co, about contraceptives.

The company had imported `C Tanble Tents (Laminaria Tents)', and classified the same under heading 99.04 as contraceptive.

But the Department wanted to classify the goods under 3006.10, which reads thus: "Sterile surgical catgut, similar sterile suture materials and sterile tissue adhesives for surgical wound closure; sterile laminaria and sterile laminaria tents; sterile absorbable surgical or dental haemostatics".

The tribunal studied the product catalogue and learnt that the items are used as a hygroscopic cervical dilator, which could be used wherever cervical dilation or softening of the cervix is desired.

And there were examples too, such as: "Cervical stenosis related to dysmenorrhea - possible cause of infertility resulting from cauterisation or conisation; placement and removal of intrauterine devices; radium placement; drainage of uterine cavity."

None of the above examples indicate the use of these goods as a contraceptive, ruled the tribunal, denying the classification that Natwarlal was arguing for.

Just one more case, before I wrap, about the buffaloes that almost went to Bangladesh travelling in a truck bearing registration No. WB-57/0513.

The Department had swung into action and caught the animals 20 km "away from the border while they were unloaded from the truck".

The driver said he didn't know that there was any export of buffaloes to the neighbouring country.

"The driver had no conversation with the owner of the buffaloes or with the labourers," notes the text of the tribunal's order. I'm sure the driver wouldn't have spoken to the buffaloes either.

ExParte@TheHindu.co.in

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