2018 (11) TMI 1102 - AT - Customs

Classification of imported goods - polyester roller blinds fabric - PVC coated roller fabric - classified under CTH 603900 and 590390 or under Chapter 54 of CTA 1975 under CTH 54077200 and 59039090? - Held that - Revenue has taken only ground that since the imported goods are in Roll form and hence not made up to be classified under Chapter 63039200. This aspect has been examined in the impugned order at para 34.4, 34.5 and 34.6 (supra). In this case, the importer has imported the fabrics which is suitable for use as curtain blends only. The CTH Heading 5404 of Customs Tariff is for woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of Heading 5404 . This heading covers the General purpose fabric with some others like parachute fabrics and Tent fabrics. The test report also confirmed that the GSM of the product is high and such types of fabrics found used as roller blend fabrics in the literature available. From the Test Report, it is evident that these goods are not fit for any other use in normal course. Case of Revenue is devoid of merits - Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Classification of imported goods under appropriate Customs Tariff Heading (CTH).
2. Determination of whether the imported goods are 'made up' articles.
3. Interpretation of relevant HSN Explanatory Notes.
4. Applicability of General Rules for Interpretation of the Harmonized System.
5. Onus of proof for change in classification.

Detailed Analysis:

1. Classification of Imported Goods:
The primary issue revolves around whether the imported goods, specifically polyester roller blinds fabric and PVC coated roller fabric, should be classified under CTH 63039200 and 59039090 as claimed by the importer or under CTH 54077200 and 59039090 as proposed by the Revenue. The adjudicating authority upheld the classification under CTH 63039200 and 59039090 based on the composition and end-use of the fabric, which is for roller blinds.

2. Determination of 'Made Up' Articles:
The Revenue contended that the imported goods should not be classified under CTH 63039200 because they are not 'made up' articles as defined in Section Note 7 of Section XI of the Customs Tariff. The adjudicating authority, however, found that the imported goods, although in roll form, are suitable for conversion into roller blinds with minor operations, thus fitting the definition of 'made up' articles.

3. Interpretation of HSN Explanatory Notes:
The adjudicating authority referred to HSN Explanatory Notes, which state that materials processed after weaving and suitable for conversion into finished articles by minor operations fall under the relevant heading. The imported roller blind fabrics, being suitable for conversion into blinds by cutting and hemming, were deemed to meet this criterion.

4. Applicability of General Rules for Interpretation:
The Revenue argued that Rule 1 of the General Rules for Interpretation, which states that classification should be determined by the terms of the headings and any relevant Section or Chapter Notes, excludes the imported items from being classified under Chapter 63. The adjudicating authority, however, applied Rule 2(a), which allows for the classification of incomplete or unfinished articles that have the essential character of the complete article, supporting the classification under CTH 63039200.

5. Onus of Proof for Change in Classification:
The respondent argued that the onus to prove a change in classification lies with the Revenue, which failed to provide sufficient evidence to justify reclassification. The adjudicating authority found that the imported goods were correctly classified as declared by the importer and that the Revenue's arguments were not substantiated by adequate evidence.

Conclusion:
The adjudicating authority concluded that the imported goods are correctly classified under CTH 63039200 and 59039090, rejecting the Revenue's appeal. The decision was supported by references to HSN Explanatory Notes, European Commission guidelines, and the inherent characteristics and end-use of the imported fabrics. The appeal filed by the department was found to be devoid of merits and was subsequently rejected.