Is a woman’s footwear without a back strap a “sandal” or a “chappal”? The Delhi High Court has ruled that it is a “sandal.”
The judgment came after a Chennai-based footwear manufacturer, Wishall International, challenged the Centre’s position that a woman’s footwear without a back strap is a chappal and not a sandal.
At the core of the dispute is the Centre’s customs duty drawback of 10% on export of sandals while export of chappals attracts only 5%. A customs duty drawback is a refund given to business houses or manufacturers who import machinery or raw material to produce goods for export. These manufacturers pay import duty on purchase of the raw material but can later claim a drawback, or refund on the duty paid, as they export their product. This is done to encourage exports.
The dispute arose in May 2003 when the company filed a shipping bill to export “ladies leather sandals.” The Customs Department in New Delhi said the export consignment contained chappals not sandals.
Wishall demanded a duty drawback at 10%, claiming their products were sandals but the Centre and Revenue Department claimed they were chappals and hence the company was entitled to only 5%.
Tit-for-Tat
The company then sought the opinion of the Council of Leather Exports, which cleared the consignment as sandals.
The Customs in turn moved the Council, which now sought the opinion of the Footwear Design and Development Institute (FDDI) in Noida. The FDDI ruled the products to be chappals.
The Customs then served a showcause notice on the company, demanding recovery of the drawback already paid at 10% as well as a penalty.
The dispute ultimately landed before the Delhi High Court, where the company said the fact that the product did not contain a back strap did not “detract from the fact that they were known to the users as sandals”.
A Bench of Justice S. Ravindra Bhat and Justice Najmi Waziri ruled that the Centre and the Revenue Department “acted upon prejudice and a preconceived notion that ladies sandals cannot be without a back strap.”
“The Council, a Central government body, which routinely deals with these issues, had furnished an opinion that the goods were sandals and not chappals. Apart from this, the court wonders whether any of the experts in this case was a woman, the ultimate customers,” the Bench said.
The court relied on a 1989 Supreme Court judgment which held that if any expression in the statute, in this case sandal and chappal, then the items in the Customs entries should be judged on the basis of how these expressions are used in popular parlance.
