Imported Aerosol valves components are classifiable under first schedule to CTA : CESTAT sets aside order [Read Order]

The two-member bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, ruled that imported aerosol valve components are classifiable under tariff heading 8481 8090 of the First Schedule to the Customs Tariff Act, 1975, setting aside the order.

The assessee had imported ‘Aerosol Valve components’ by classifying it under Customs Tariff Item (CTI) 8481 8090 under Bill of Entry (B/E) No. 8442816 dated 11.08.2020 and self assessed the same with applicable Basic Customs Duty (BCD) of 7.5% ad valorem, in terms of Section 17(1) of the Customs Act, 1962. The proper officer of Customs in the Appraising Group had objected to the classification of the imported goods and had raised query seeking reply from the appellants as to why the imported goods should not be classified under CTI 9616 1020 with applicable Basic Customs Duty (BCD) of 20% ad valorem.

On examination of representative sample of the declared goods, the assessing officer of the Appraising Group-V had come to the conclusion that the imported goods having a cap with plastic pipe attached to it for the function of pumping the liquid in a container, when the pump or sprayer is pressed, is classifiable under the Customs Tariff Item (CTI) 9616 1020 of the First Schedule to the Customs Tariff Act, 1975 and not under the declared CTI 8481 8090. The original authority in passing the assessment order in terms of Section 17(5) of the Customs Act, 1962 had confirmed the classification of the imported goods under CTI 9616 1020 and rejected the classification claimed by the appellants importer vide Order-in-Original dated 27.08.2020.

 The assessee had filed an appeal before the Commissioner of Customs (Appeals). In deciding the appeal, learned Commissioner of Customs (Appeals) vide impugned order had held that the imported goods under dispute viz. ‘Aerosol Valve components’ are rightly classifiable under CTI 9616 1020, by upholding the original order and in rejecting the appeal filed by the assessee.

 Mr. D.H. Nadkarni, representing the assessee submitted that ‘aerosol valve’ is a device that allowed the controlled release of a product from an aerosol can. They are typically made of metal or plastic and consist of the valve stem, a dip tube, a dip tube seal, a valve body and an actuator.

The aerosol valves are used in a wide variety of products, including paints, deodorants, and air fresheners and cleaning products to be sprayed or dispersed from the container. The valve operates as pressure reducing valves which are mounted on the top of containers for spraying the liquids under pressure, hence its role is essential, in keeping the container air tight, clean and hygienic and for regulating the flow of the product during use. They are a convenient and effective way to dispense products that are in liquid or powder form.

He further submitted that the product aerosol valve is a general spray purpose valve and applied in many such cases and not linked to specific products such as scent or toilet spray. Further submitted that the classification of imported goods declared by the appellants were duly supported by the Harmonized System of Nomenclature (HSN) which provides for coverage of the ‘pressure spray can-lids for cans’ to be filled with liquid or gasecous substances. Hence, he pleaded that the impugned order is not legally sustainable.

 Mr. D.S. Maan, representing the revenue reiterated the findings made by the Commissioner of Customs (Appeals) in the impugned order and submitted that the issue of classification of impugned goods, has been examined in detail by the Commissioner of Customs (Appeals).

He stated that the appellants have described the imported goods as ‘aerosol valve components’ but claimed the classification under CTI 8481 8090 which is meant for other appliances and not for parts, which is classifiable under CTI 8481 9090. From the sample photograph of the product, he submitted that the goods are made of plastic and these are pump mechanism to pass the liquid from the container by way of motivating force from the bulb pressure or piston action, and are rightly classifiable under CTI 9616 1020

Thus, further justified the action in the impugned order dated 12.04.2023, for re-classifying the goods under CTI 9616 1020 and thus pleaded for rejecting the appeals filed by the appellants.

 The issue to be decided was whether the classification of imported goods by the appellants as to whether, the same merits classification under Customs Tariff Item (CTI) 8481 8090 as claimed by the appellants; or, is it classifiable under Customs Tariff Heading (CTI) 9616 1020 as determined by the Commissioner of Customs (Appeals), for deciding on the appropriate levy of customs duty.

The bench  found that the  Commissioner in arriving at the conclusion for classification of the imported goods under the heading 9616 1020 has relied upon the order of the Tribunal in the case of Commissioner of Customs, Mumbai Vs. Reckit & Colman of India Ltd. The reasoning adopted in the above case is that scope of coverage of goods under chapter heading 8424 is for industrial use, whereas the classification under chapter heading 9616 is for consumer purposes.

The bench, consisting of S.K. Mohanty (Judicial Member) and M.M. Parthibhan (Technical Member), considered that the impugned goods are classifiable under tariff heading 8481 8090 of the First Schedule to the Customs Tariff Act, 1975. Consequently, the impugned order dated April 12, 2023, which classified the imported goods under heading 9616 1020, does not withstand legal scrutiny and is therefore not legally sustainable. Accordingly, the appeal was allowed, and the impugned order was set aside.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates