2019 (1) TMI 78 - AT - Customs

Classification of imported goods - Bonded Fabric - whether classified under RITC 60063200 or are classifiable under RITC 54074290? - Board Circular No. 02/2011-Cus. dated 04.01.2011 - Held that - The undisputed fact is that the assessee imported Bonded Fabric and not textile or any other goods . The Section Note, heavily relied on by the Revenue (Section XI), applies to textiles and textile articles in general. Sub-section (2) and Sub-clauses thereunder refer to goods classifiable in Chapter 50 to 55, etc., consisting of mixture of two or more textile materials and the predominant test here is the weight of one textile material over another single textile material. This is of no help to the Revenue because, admittedly, what is imported is fabric per se. Circular No. 02/2011 specifically covers fabrics bonded fabrics classifiable depending on the type of textile material and nature of bonding. The textile industry differentiates between textile and fabric; normally a textile refers to an unfinished product which cannot be used specifically while a fabric is used specifically to mean a finished product - Hence, the applicability of Section Note is misplaced and the classification is therefore required to be done as per the interpretative Rules, more specifically, under Rule 3. Rule 3(c) alone is applicable and has rightly been applied by the first appellate authority. The impugned goods are rightly classified by the importer under RITC 60063200 - appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of imported Bonded Fabric

Analysis:
The Department appealed against the Order by the Commissioner regarding the classification of imported Bonded Fabric. The fabric consisted of two layers bonded together, one made of black knitted fabric of polyester and the other of pale-brown woven fabric of polyamide. The Customs House Laboratory reported GSM as 135.3 with woven fabric at 53.7% and knitted fabric at 46.3%. The assessing Officer reclassified it under RITC 54074290, but the first appellate authority upheld the importer's classification under RITC 60063200. The Revenue contended that the fabric should be classified based on the textile material predominating by weight, relying on Section Notes and Rule 3(c) of the General Rules for Interpretation. They cited a Delhi CESTAT judgment upheld by the Supreme Court. The importer argued that the Delhi Bench judgment was not applicable as it involved only Polyester bonded fabric and supported the first appellate authority's interpretation of the Board Circular. The Tribunal noted that the Section Notes referred to textiles, while the Circular covered bonded fabrics specifically, emphasizing the difference between textile and fabric. They concluded that Rule 3(c) was correctly applied by the first appellate authority, dismissing the relevance of the Delhi Tribunal's judgment. Consequently, the Tribunal upheld the importer's classification under RITC 60063200, dismissing the Revenue's appeal.