1998 (9) TMI 285 - AT - Customs

Summary

Issues: Classification of imported goods under Chapter sub-heading 6603.90 or 6307.90, applicability of specific license requirement, confiscation of goods, imposition of penalty, consistency in classification practice, bona fide conduct of the appellant.

Classification Issue:
The appellant, engaged in umbrella manufacturing, imported nylon cloth panels, facing classification disputes under Chapter sub-headings 6603.90 and 6307.90. The appellant argued for classification under 6603.90 based on Chapter Note 2, while the department cited HSN Explanatory Notes supporting classification under 63.07 due to the panels' characteristics. The Tribunal analyzed the definitions of "made-up" in Chapter 63 and the classifications under Chapter 66, ultimately determining the panels as "made-up" textile articles, falling under 63.07.

Specific License Requirement:
The Commissioner imposed penalties and confiscation due to the absence of a specific license for goods classified under 6307.90. The appellant contended a consistent practice of classifying under 6603.90, accepted by Customs authorities until a recent change. The appellant's belief in proper classification under 66.03 was supported by past practices, the Trade's understanding, and subsequent policy changes allowing OGL imports. The Tribunal noted the appellant's bona fide conduct and the Trade's consistent belief in the classification under 66.03, leading to the conclusion that the appellant acted in good faith without intent to contravene the law.

Confiscation and Penalty Imposition:
The Tribunal considered the appellant's justifications, consistent practices, and the Trade's understanding, concluding that the Commissioner should have refrained from confiscation and penalty imposition. Citing precedents like Radhey Shyam Ratanlal and Ingersoll Rand cases, the Tribunal emphasized the appellant's bona fide conduct and the Trade's shared belief in the proper classification under 66.03. Consequently, the Tribunal set aside the impugned orders, allowing the appeals based on the appellant's genuine conduct and the Trade's consistent understanding of the classification.