2015 (2) TMI 784 - AT - Customs

Classification of imported fabrics - Covered textile fabrics or otherwise - A material can not be said to covering itself to be called covered material - Held that - In the present case, the only material is polyester and therefore there is no ambiguity requiring predominance test. In case it is contended that the impugned goods are not consisting of two or more textile fabrics of different composition as they are made of only polyester, even then it would suffice to say that as per the said Explanatory Note, when a textile fabrics layered with another textile fabrics of a different material (by sewing gumming etc.) is not to be covered under the scope of covered fabrics (CTH 59.07), then a textile fabrics covered by another textile fabrics of the same material will be (even more) not covered under the scope of covered fabrics of CTH 59.07. Thus the appellants contention that the said H.S.N. Note is not applicable for the purpose of classification in their case as there is only one material (Polyester) involved in their goods is totally untenable; indeed existence of only one material, as stated earlier, obviates the need to carry out the predominance test. Having thus analyzed, it may be reiterated that once the impugned goods are not held to be classifiable under CTH 5907, then even the appellants do not contend that in that case too they would not be classifiable under CTH 55151230. Non supply of information - Held that - During the hearing before CESTAT the appellants did not take up the issue of valuation but they have mentioned in the appeal papers that in spite of their request, copies of alleged contemporaneous evidence for raising the value had not been given to them. We find that the Commissioner has clearly noted in the impugned order that they were informed vide letter dated 2.2.2007 to inspect/procure copies of desired documents and the same were supplied on 22.2.2007 under proper acknowledgment. After that the appellants did not desire personal hearing and categorically wrote that the issue may be decided on merit. Thus appellants contention in this regard in their appeal papers is untenable and that may be the reason why the issue of valuation was not raised by them during hearing before Cestat. - Decided against the assessee

Summary

Issues: Classification of imported polyester bonded fabrics under Customs Tariff Heading (CTH) 5907, valuation enhancement, and imposition of customs duty, penalty, and redemption fine.

Classification Issue:
The appellant imported polyester bonded fabrics and sought classification under CTH 59070099. The CRCL report described the goods as a combination of woven and knitted fabrics bonded with adhesive material. The adjudicating authority classified the goods under CTH 55151230, enhanced the value, and imposed customs duty, penalty, and redemption fine. The appellant argued for classification under CTH 5907 based on Section Note 8(b) to section XI of the Customs Tariff. The AR contended that the goods did not qualify as covered fabrics. The tribunal analyzed the CRCL and IIT Delhi reports, emphasizing that the goods did not meet the criteria for classification under CTH 5907. The tribunal interpreted the relevant chapter headings and notes, concluding that the goods were not covered fabrics under CTH 5907, thus supporting the adjudicating authority's classification under CTH 55151230.

Valuation Issue:
The appellant raised concerns about the arbitrary enhancement of the value and the lack of access to alleged contemporaneous evidence for valuation. The Commissioner provided the requested documents, and the appellant did not pursue the issue further, opting for a decision on merit. The tribunal found the valuation reasons unchallenged and valid, leading to the dismissal of the appellant's contentions regarding valuation enhancement. The tribunal did not identify any flaws in the adjudicating authority's valuation determination, thereby upholding the valuation enhancement.

Conclusion:
The tribunal dismissed the appeal, upholding the classification of the imported polyester bonded fabrics under CTH 55151230 and validating the valuation enhancement. The appellant's arguments based on Section Note 8(b) to section XI of the Customs Tariff were deemed untenable, as the goods did not qualify as covered fabrics under CTH 5907. The tribunal affirmed the adjudicating authority's decisions on classification, valuation, customs duty demand, penalty imposition, and redemption fine, finding no deficiencies in the impugned order. The judgment was pronounced on 09/02/2015, concluding the legal proceedings related to the classification and valuation issues.