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Issues involved: Classification of imported goods under Customs Notification No. 21/2002, denial of exemption, duty payment, classification as articles of leather, dispute over finished leather cut pieces.
Summary: 1. The appellants imported goods declared as "Beef Leather Cut Pieces Set - TFC 235-SET" seeking duty exemption under Customs Notification No. 21/2002. Customs authorities rejected the classification proposed by the importer, considering the goods as finished leather cuttings under CTH 4205 00 90. The Deputy Commissioner directed the appellants to pay duty on the imported beef leather cut pieces. The appeal against this order was unsuccessful, leading to the current appeal. 2. The goods imported were intended to be parts of car seat covers, requiring further processing. The appellants argued that the finished leather cut pieces were not ready-to-use articles of leather, citing precedents and examination reports. They contended that the goods should be classified under Heading 4115 20 90, as done in a previous assessment at Bangalore airport. 3. The JDR supported the Commissioner's findings, emphasizing the design and shape of the imported goods suitable for car seat covers. Reference was made to HSN Explanatory Notes under Chapter 41 and Heading 42.05 to justify classifying the items as articles of leather. 4. After reviewing the submissions, it was noted that the finished leather cut pieces imported by the appellants were suitable for making car seat covers, not classified as leather articles but as motor vehicle accessories under Heading 87.08. The goods did not qualify as ready-to-use articles of leather under Chapter 42. 5. To claim duty exemption under Notification No. 21/2002, the appellants needed to demonstrate that the imported goods were finished leather classifiable under Chapter 41, which they successfully established. 6. Considering the consistent classification of identical goods at Bangalore airport under Chapter 41 and the benefit granted there, the appellants should have received the same treatment in Chennai. Relying on previous court decisions, the appeal was allowed, setting aside the earlier order. In conclusion, the appellate tribunal ruled in favor of the appellants, overturning the decision to deny duty exemption and directing the authorities to classify the imported finished leather cut pieces appropriately under Chapter 41 for duty assessment.
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