2024 (3) TMI 246 - AT - Customs

Demand duty - Imported one consignment of Bed sheet , declared as made of 100% Polyester - mis-declaration the goods - classifiable under CTH 5407 whereas the respondent had classified the goods under CTH 6304 - confiscation - redemption fine along with interest - penalty - HELD THAT - We admit that the articles which have been imported by the respondent are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondent. In the circumstances, the merit classification of the impugned goods is under CTH 6304 of the Customs Tariff Act. Therefore, we classify the impugned goods as Bed spreads (Bed sheets) classifiable under CTH 6304 of the Customs Tariff Act. In view of this, we hold that the impugned goods have been correctly classified by the respondent and the same are not liable for confiscation. We further hold that the respondent is liable to pay duty by classifying the impugned goods under CTH 6304 of the Customs Tariff Act and no penalty is imposable on the respondent. No redemption fine is payable by the respondent. Thus, we dismiss the appeal filed by the Revenue and accordingly dispose of the cross-objection filed by the respondent.

Summary

Issues involved:
The classification of imported goods under Customs Tariff Act and imposition of penalty under Section 114A of the Customs Act, 1962.

Classification of Goods:
The case involved a dispute regarding the classification of a consignment of 'Bed sheet' imported by the respondent. The Revenue contended that the goods should be classified under CTH 5407 as "Polyester Woven Fabrics," while the respondent had classified them under CTH 6304 as "Other furnishing articles." The Tribunal analyzed the description of the goods in the Bill-of-Entry and concluded that even though the bed sheets were made of 100% polyester yarn, they retained their identity as bed spreads/bed sheets, properly classifiable under CTH 6304. The Tribunal held that the goods were correctly classified by the respondent under CTH 6304, and therefore, not liable for confiscation. No penalty or redemption fine was imposed on the respondent in this regard.

Imposition of Penalty:
The Revenue alleged that the respondent had willfully mis-declared the goods, and therefore, penalty under Section 114A of the Customs Act, 1962 should have been imposed. The Authorized Representative for the Revenue argued that the respondent had suppressed facts and deliberately misclassified the goods. However, the Tribunal found that the respondent had properly classified the goods under CTH 6304 and there was no intentional mis-declaration. Consequently, the Tribunal dismissed the appeal filed by the Revenue and disposed of the cross-objection filed by the respondent, holding that no penalty was imposable on the respondent.

This judgment clarifies the importance of accurate classification of imported goods under the Customs Tariff Act and highlights the criteria for determining the correct classification based on the nature and identity of the goods, as described in the relevant documentation. It also emphasizes the need for evidence of willful mis-declaration to impose penalties under the Customs Act, ensuring fair treatment of importers in such disputes.