2009 (6) TMI 762 - AT - Customs

Summary

Issues:
1. Waiver of duty and penalty for imported readymade garments.
2. Classification of jackets under specific tariff headings.
3. Interpretation of Chapter Note 8 of Chapter 62 of the Tariff for unisex garments.

Analysis:
1. The applicant sought a waiver of duty and penalty amounting to Rs. 25,68,818 for imports of readymade garments. The applicant claimed that the goods were declared correctly, examined, and cleared after appropriate duty payment. However, a show cause notice alleged suppression due to incomplete description of the garments. The applicant argued that the invoice clearly stated the goods were for boys and girls, justifying the proper classification.

2. The Revenue contended that the jackets should be classified under Sub-Heading 6204 33 00 of the Tariff as girls' jackets, contrary to the applicant's claim under Sub-Heading No. 6201 99 90. The Revenue's position was based on the belief that the garments were not accurately described, leading to the demand for duty payment. However, the applicant maintained that the correct heading was provided in the bill of entry, negating any suppression allegations.

3. The Revenue invoked Chapter Note 8 of Chapter 62 of the Tariff, which dictates that garments unidentifiable as men's or women's should be classified under the heading for women's garments. The Revenue argued that since the applicant did not provide the true description of the jackets, they should be classified as women's or girls' garments. Consequently, the duty was deemed rightfully demanded.

4. The Tribunal analyzed the case, noting that the import occurred in 2004, with the applicant submitting bill of entries and invoices with appropriate Tariff headings. The goods underwent examination and sampling, as evidenced by the examination report. Given that the goods were inspected before clearance and found to align with the declaration, the Tribunal found merit in the applicant's case and granted a waiver of duty and penalty, staying the recovery during the appeal's pendency. The Stay Petition was allowed, indicating a favorable outcome for the applicant.