2013 (7) TMI 681 - CGOVT - Customs

Classification of goods - Assessee had exported woven fabrics containing 85% or more by weight of synthetic filament yarn (dyed and printed) polyester under claim of drawback under Tariff item no. 540702A of the Drawback Schedule - department viewed that the exported goods were not eligible for the benefits of drawback in terms of tariff item No. 540702-A, but under Tariff Items No. 540705 - Held that - Goods cannot be classified under Tariff Item No. 540705 - Government finds that the exported goods merit classification under Tariff Items No. 540702 and not under Tariff Item No. 540705 as claimed by the department - the printed and coloured textile materials had also been brought under the purview of dyed textile materials - the chemical examiner s report states that the goods as printed - In term of para (10) of the Notification No. 81/2006-Cus. (N.T.) the printed textile materials should also be treated in the category of dyed fabric for claiming drawback benefit - Tariff Item No. 540705 includes description of goods as Other (grey) - exported goods being printed in nature cannot be classified as grey fabric decided against department.

Issues:
1. Interpretation of relevant provisions of Notifications and Drawback Schedule for eligibility of correct drawback amount.
2. Applicability of Notification No. 81/2006-Cus. (N.T.) in determining eligibility for drawback.
3. Classification of exported goods under Tariff Item No. 540702A or 540705A based on the nature of the fabric.
4. Dispute regarding the term "dyed" in relation to textile materials and its inclusion of printed or coloured materials for claiming drawback benefits.

Issue 1: Interpretation of relevant provisions of Notifications and Drawback Schedule
The revision application filed by the Commissioner of Customs challenged the rejection of the appeal by the Commissioner (Appeals) based on the interpretation and application of relevant provisions of the Notifications and Drawback Schedule. The applicant department argued that the exported goods were not eligible for the benefits claimed under Tariff Item No. 540702-A due to the nature of the fabric not meeting the specified criteria.

Issue 2: Applicability of Notification No. 81/2006-Cus. (N.T.)
The dispute revolved around the applicability of Notification No. 81/2006-Cus. (N.T.) in determining the eligibility for drawback in the case of exported goods. The government observed that the goods were covered under the provisions of this notification during the export period, and the relevant entries in the Drawback Schedule were crucial in deciding the classification of the goods for claiming drawback benefits.

Issue 3: Classification of exported goods under Tariff Item No. 540702A or 540705A
The key contention was whether the exported goods should be classified under Tariff Item No. 540702A or 540705A based on the nature of the fabric. The government noted that the fabric, although not dyed, was printed, and according to the Notification, printed textile materials should be treated as dyed for claiming drawback benefits. The goods were found to merit classification under Tariff Item No. 540702 rather than 540705, as claimed by the applicant department.

Issue 4: Dispute over the term "dyed" in relation to textile materials
The disagreement centered on the interpretation of the term "dyed" in relation to textile materials and its inclusion of printed or coloured materials for claiming drawback benefits. The chemical examiner's report stating the goods as "printed" played a crucial role in determining the classification of the exported goods under the relevant Tariff Items. The government upheld the decision of the Commissioner (Appeals) based on the broadened scope of the term "dyed" to include printed textile materials for claiming drawback benefits.

In conclusion, the government found no infirmity in the order of the Commissioner (Appeals) and upheld the decision, rejecting the revision application as devoid of merit.

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