2019 (12) TMI 1347 - AT - Customs

Classification of export goods - Cotton/Polyester Woven Ladies Top/Tunic Top - classifiable as Cotton Woven Ladies Blouse under HS Code 6206.30 or otherwise? - argument of the appellant is based on the certification given by Textile Committee and the clarification given vide Public Notice 22/2012 dated 06/07/2012 issued by New Delhi - HELD THAT - Appellant submit that their request for sending the goods for examination to Textiles Committee or any Agency was not accepted. Textile Committee report was not considered stating that the sample was not drawn by the department and were drawn by the appellant themselves. We find that this approach is incorrect. The department should have got the goods tested in the first place before coming to a conclusion. They could have at least sent samples at least on the request of the appellant. Both having not been done, Revenue can not brush aside the report given by an expert committee simply for the reason that sample was not drawn and referred by the Department - Department has not adduced anything to counter the report of the Textiles Committee. Revenue has not proved that the sample sent to Textile Committee was not representative of the impugned goods. Moreover, the classification suggested by the Public Notice supports the appellants claim. Here too, Revenue did not prove that the description of the impugned goods did not match with the description of goods at Sl.No.4 of the Public Notice. Though the Public Notice is issued by another Custom House, it can be used as a reference. The Public Notice along with the Textile Committee report support appellants claim. Therefore, the allegation of mis-declaration is not substantiated - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of exported goods under Drawback Code 620638, Mis-declaration, Imposition of penalty, Refusal to draw sample for classification, Appeal against order passed by Joint Commissioner, Upholding of findings by Commissioner of Customs, Allegation of mis-declaration, Request for examination by Textile Committee, Relevance of Public Notice No. 22/2012, Classification dispute between Drawback S.S. 6211 and HS Code 6206.

Analysis:
The case involved the classification of goods exported by M/s. Crystalline Exports Pvt. Ltd. under Drawback Code 620638, which was disputed by the authorities leading to mis-declaration allegations and imposition of a penalty of ?40,000. The appellant's appeal was based on the argument that the Commissioner did not consider the Public Notice No. 22/2012 and the report of the Textile Committee, which supported the classification under Code 6206. The appellant contended that the goods did not have pockets below the waist or any fastening at the bottom, thus should be classified under Code 6206. The refusal to draw a sample for classification by the department was highlighted as arbitrary, and the appellant's request for examination by the Textile Committee was not accepted.

The Tribunal analyzed the reports of the Textile Committee and the Public Notice 22/2012, which described the classification criteria for ladies' garments with tightening above the bottom or around the waist level under HS Code 6206. The Tribunal found that the department's failure to test the goods or send samples for examination before concluding mis-declaration was incorrect. It was noted that the department did not provide any evidence to counter the Textile Committee's report, and the classification suggested by the Public Notice supported the appellant's claim. The Tribunal emphasized that the Public Notice from another Custom House could be used as a reference, and in this case, it supported the appellant's position.

Consequently, the Tribunal held that the allegation of mis-declaration was not substantiated, leading to the conclusion that the imposition of the penalty and fine was unjustified. The impugned order was deemed not maintainable and set aside, allowing the appeal with consequential relief as per the law. The judgment highlighted the importance of considering expert reports and public notices in classification disputes and emphasized the need for proper examination and evidence before alleging mis-declaration and imposing penalties.