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Issues: Classification of goods as leather or non-leather.
Analysis: The appeal was filed against the Order-in-Appeal rejecting the appellants' claim for DEPB credit on leather goods. The dispute arose when it was discovered that out of 12,882 pieces of goods, 1686 pieces had an outer visible surface made of PVC material instead of leather. The original authority confiscated the goods, but the appellants contended that the goods were predominantly made of leather. The Commissioner of Customs (Appeals) upheld the decision, leading to this appeal. During the hearing, the appellants relied on clarifications from the Project Head of the National Leather Development Programme and the Indian Leather Products Association. These clarifications stated that if the percentage of leather used in a product is more than sixty percent, it should be classified as leather goods. The appellants argued that, based on these clarifications and the material consumption data, their goods should be considered leather goods despite the presence of PVC material on the outer surface. The Revenue, represented by the JDR, supported the lower authorities' findings and urged the appeal's rejection. However, upon reviewing the submissions and records, the Tribunal found that the pre-dominance of leather in the goods was not disputed. The appellants provided a chart and clarifications showing that the percentage of PVC material used was not significant and that the DEPB benefit claimed was only for the leather portion. The Tribunal noted that the Revenue did not present tested samples disproving the appellants' claim of leather predominance. Considering the evidence and the clarifications from industry bodies, the Tribunal concluded that the goods should be classified as leather goods despite the presence of PVC material on some pieces. The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief as necessary. In conclusion, the Tribunal's decision focused on the pre-dominance of leather in the goods based on industry standards and material composition, ultimately classifying the goods as leather goods and allowing the appeal against the rejection of DEPB credit.
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