2004 (3) TMI 559 - AT - Customs

Summary

Issues: Classification of imported goods as looped pile fabrics under CTH Heading 6001.22 versus cut pile fabrics under CTH Heading 6001.92.

In this case, the appellants imported goods declared as polyester knitted fabrics under Bills of Entry for home consumption, claiming classification under CTH Heading 6001.22, which covers 'looped pile fabrics.' The goods were examined, and samples were sent to Textile Committee, Ludhiana, and CRCL, New Delhi for composition and classification verification. The Textile Committee reported the goods as "knitted cut pile fabric of GSM 177.74," while CRCL described it as a "cut piece of black-colored knitted cut pile fabric." The reports indicated that the goods were cut pile polyester knitted fabrics under CTH Heading 6001.92. The importers, however, insisted on classification under CTH Heading 6001.22, leading to a show cause notice proposing classification under 6001.92, enhanced assessable value, duty recovery, confiscation, and penalties. The Commissioner of Customs confirmed the proposed classification, accepted the transaction value, and imposed penalties, leading to the appeals.

During the hearing, it was established that the imported polyester knitted fabrics were pile knitted fabrics produced through knitting machines and sheared to the desired pile height. The distinction between looped pile fabrics and cut pile fabrics was elucidated based on Fairchild Textile Dictionary, where it was explained that in cut pile fabrics, the pile is produced during weaving, while in looped pile fabrics, the fabrics are sheared after production. The imported fabrics, made on circular knitting machines, could not have their pile cut during weaving due to their tubular form, indicating a unidirectional process. As the appellants produced pile fabrics through shearing after production, they were classified as looped pile fabrics falling under CTH Heading 6001.22. The comparison with terry fabrics by the foreign supplier was misinterpreted, leading to the conclusion that the imported fabrics were cut pile, which was incorrect.

The judgment concluded that the goods in question were indeed looped pile fabrics, specifically knitted pile fabrics that had been sheared, aligning with the definition in Fairchild's Textile Dictionary. Therefore, the impugned orders were set aside, and the appeals were allowed, emphasizing the correct classification as looped pile fabrics under CTH Heading 6001.22.