By TIOL News Service

MUMBAI, JAN 11, 2017: THE appellants claimed that the goods manufactured by them are classifiable under Chapter 95 of CETA, 1985 as "Sports goods" and entitled for exemption in terms of Notification No. 06/2002-CE dated 01.03.2002.

The department alleged that the following goods (1) Climbers – (includes various types of nets attached to frames which are similar to the ones used in obstacle course) and (2) Thriller Range (includes items like Balancing Beams, Rolling Barrel, Walking Barrel, Stationery Cycle, Rock N Roll Bar, Double Bar, Gliders, Loop Ranges, Horizontal Bars etc.) are not Sports goods and, therefore, are not entitled for the benefit of exemption.

The adjudicating authority while denying the exemption and confirming the duty demand opined that only such articles which are used for competitive games will fall under the category of "sports goods". Inasmuch as since the impugned goods are not used for any games, they cannot be termed as "Sports goods".

The Commissioner (Appeals) upheld this order and, therefore, the appellant is before the CESTAT.

The appellant submitted that the product in question i.e. Climbers and Thriller are installed in the gardens/playground for the children for their plays and games, therefore, it is clearly "sports goods"; that the only exclusion for the purpose of exemption notification are those goods which are used for general exercise;that these goods are not used for general exercise but is used by the children in the garden and playground for their sports activity. Furthermore, as per Bureau of Indian Standards also, the playground equipment for parks is covered under the category of "sports goods"; HSN Explanatory note in respect of Heading 95.06 mentions that equipment used in the children playground is classifiable as "sports goods".

The appellant also informed that in their own case for the period April 1994 to December 1998, the demand of Rs.2.22 crores was raised but the same was dropped by the CCE, Mumbai-III vide order dated 28.03.2003 and this order has been accepted by the department since not challenged by filing any appeal. Moreover on the identical issue for the period 01.01.2005 to 31.12.2007 demand of Rs. 25.6 lakhs, for the period 01.10.2010 to 31.03.2012, demand of Rs. 4.67 lakhs and in the period 01.01.2013 to 30.06.2014 demand of Rs. 58.27 lakhs were dropped in appeal by the Commissioner (Appeals). And in view of the above, the issue has attained finality and, therefore, the demand cannot survive.

The AR reiterated the findings of the impugned order.

The Bench observed –

"4. … We find that the products in question are Climbers and Thriller which are used for children's play & games and are installed in playground & gardens. We observe that these goods are admittedly for children's plays. Therefore, as far as small children these are sports equipment for their play. We also observe that the lower authorities have contended that the sports which are played nationally and internationally only are the sports and play of the children in garden and playground, are not sports which we do not agree with the lower authorities. For every age there are different type of plays & games, small children's sports is the games and plays which they play in the garden with the use of these equipment, therefore these are the sports activity for the children. As per the Bureau of Indian Standards also the following equipments have been categorized as "sports goods".

From the above ISI standards it can be seen that the play equipment installed in the park for children play are indeed "sports goods". The explanatory notes to HSN in respect of Heading 95.06 reads as under:- x x x

(A) Gymnasium or athletic equipment,

(B) Requisites for other sports and outdoor games (other than toys presented in sets, or separately, of heading 95.03)

(1) to (11)……………………………..

(12) Equipment of a kind used in children's playgrounds (e.g., swings, slides, see-saws and giant strides)

From the above it can be seen that equipment used in children's playground are falling under the classification of "sports goods" falling under Chapter 9506. Therefore, we do not have any doubt that the product in question that being equipment used in children's playground are ‘sports goods'.

We also find that there is force in the submission of the Learned Counsel on the fact that in the appellant's own case for almost entire period except the period involved in the present case either the demand was dropped the demand of the original adjudicating authority was set aside by the Commissioner (Appeals). In all such cases the department had accepted the orders and no further appeal was filed. In such a situation present demand will not sustain on this ground also. As per the above discussion, we hold that the goods i.e. Climber's and Thriller used in playground and garden for the purpose of children plays are correctly classifiable as "sports goods". There is no dispute that the said equipments are not used for general physical exercise, therefore, the same are entitled for exemption Notification No. 06/02-CE dated 01.03.2002…."

The impugned order was set aside and the appeal was allowed.

(See 2017-TIOL-92-CESTAT-MUM)