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2015 (12) TMI 1000 - AT - CustomsConfiscation of imported goods being warp cut pile fabrics - velvet effect - Denial of the benefit of Notification No.30/2004-CX dated 09.07.2004 - Classification under under CTH 58013711 or CTH 50079090 - Imposition of redemption fine and penalty - Held that - If the appellant had been aware of the intelligence received by DRI then amendment should have been sought exactly for the description as per the details found during examination of the goods. The amendment was sought only as per the e-mail dated 03.11.2014 received from the supplier of the goods which was not the actual description found on examination. Accordingly we are of the view that oral request for amendment was made on 03.11.2014 and appellant was not aware of the exact description of goods at the time of filing the bill of entry that a part of the goods will be fabrics of CTH 5801. Appellant also asked for 100% examination of the imported goods and there was an option from the seller of the goods to return the same. However, as the amendments sought was not for the correct description of goods, therefore, the same could not have been allowed by the Adjudicating authority. However, reasoning of Adjudicating authority for rejection, that amendment application was filed after receipt of DRI intelligence, is not correct as appellant has not sought the exact description of goods in the written amendment application dated 10.11.2014. It is accordingly held that request for amendment was not influenced by the intelligence received by DRI. Goods imported by the main appellant are warp cut pile fabrics whereas velvet effect can be obtained both by uncut pile as well as warp cut fabrics . As per above distinctions available an uncut pile fabrics will be classifiable under CTH 58013711 and 58013719 but all such uncut pile fabrics need not be known as velvets. On the other hand warp pile fabrics (including cut velvet) will be classifiable under CTH 58013720. Scientific literature furnished by the appellant do indicate that there are categories of uncut pile fabrics in the market which are also known as velvets (Epingle & Terry Velvet). Corresponding entries under Customs Tariff for Cotton Velvet fabrics are 5801 2710 & 5801 2720 but the word velvet has not been mentioned in these classification at all. The crucial words are warp pile fabrics, cut (58012710) & other (5801 2720). Thus more important in the classification of a fabric under 5801 3711/19 and 5801 3720 will be the cut or uncut nature of warp pile . Accordingly we are of the considered opinion that stand of the Adjudicating authority and the learned A.R., that all categories of velvet fabrics will invariably fall under 5801 3711, is not correct and is rejected. So far as exemption from CVD under Notification No.30/2004-CE dated 09.07.2004 is concerned, the case of the appellant is that no CENVAT Credit used in the manufacture of imported goods could have been taken as the same were not manufactured in India - appellant are entitled to CVD exemption under Notification No.30/2004 dated 09.07.2004. Appellant came to know about the discrepancy and mix up in some of the imported goods as per e-mail dated 03.11.2014 from the supplier and appellant made a bill of entry amendment request as per the changed description given by the supplier of the goods. Existence of such an e-mail and its receipt by the appellant is not disputed. If the appellants had come to know of the investigation being conducted by DRI then they could have given the exact description of the goods found during physical examination. There is no evidence on record that appellants had prior knowledge of the exact description of goods and we hold that the conclusions drawn by Adjudicating authority are based on presumptions and surmises. Under the existing factual matrix orders regarding confiscation of goods and imposition of penalties upon the appellants and confiscation of goods under Section 111(m) and Section 119 of the Customs Act, 1962 are not justified and are set aside - Decided against Revenue.
Issues Involved:
1. Timeliness of the amendment request for Bill of Entry No. 7535365. 2. Classification of imported goods under CTH 58013720 or CTH 58013711. 3. Admissibility of exemption under Notification No. 30/2004-CE for CVD. 4. Justification of confiscation of goods and imposition of penalties. Detailed Analysis: 1. Timeliness of the Amendment Request for Bill of Entry No. 7535365: The appellant argued that the conditions for the provisional release of imported goods were unreasonable, leading to the non-release of goods. They sought an amendment of the Bill of Entry after receiving a letter from the supplier on 03.11.2014. The oral request for amendment was made on the same day, but the written application was delayed due to holidays and was finally submitted on 10.11.2014. The Revenue seized the goods on 18.11.2014 and rejected the amendment application on 08.01.2015, citing that the request was made after receiving intelligence from DRI. The Tribunal observed that the oral request on 03.11.2014 was corroborated by statements from the CHA and Shri Aditya Sarda. The Tribunal concluded that the amendment request was not influenced by DRI intelligence and was made based on the supplier's email, not the exact description found during the examination. However, the amendment was not allowed as it did not match the actual description of the goods. 2. Classification of Imported Goods: The dispute was whether the goods should be classified under CTH 58013720 (Cut Pile Fabrics) as claimed by the appellant or CTH 58013711 (Uncut Pile Fabrics) as decided by the Revenue. The Tribunal referred to the Customs Tariff Act, 1985, and technical literature, concluding that "uncut pile fabrics" are classifiable under CTH 58013711 & 58013719, while "cut warp pile fabrics" fall under CTH 58013720. The Tribunal rejected the Revenue's stance that all velvet fabrics fall under CTH 58013711 and held that the classification of goods at Item No. 8 of the Bill of Entry should be under CTH 58013720. The appropriate assessing authority was directed to re-quantify the basic customs duty. 3. Admissibility of Exemption under Notification No. 30/2004-CE: The appellant contended that no CENVAT Credit was taken as the goods were not manufactured in India. The Revenue, relying on previous case laws, denied the exemption. The Tribunal referred to the recent Supreme Court judgment in M/s. SRF Ltd. v. Commissioner of Customs, Chennai, which held that the condition of not availing CENVAT Credit is satisfied if no credit is taken, regardless of the goods being manufactured abroad. The Tribunal concluded that the appellant was entitled to the CVD exemption under Notification No. 30/2004-CE. 4. Justification of Confiscation of Goods and Imposition of Penalties: The Tribunal noted that the appellant discovered the discrepancy through an email from the supplier and sought an amendment based on the new description. The Tribunal found no evidence that the appellant had prior knowledge of the exact description of goods or the DRI investigation. The conclusions of the Adjudicating authority were deemed based on presumptions and surmises. Consequently, the orders regarding confiscation of goods and imposition of penalties under Sections 111(m) and 119 of the Customs Act, 1962, were set aside. Conclusion: The appeals were allowed, except for the re-quantification of basic customs duty. The Tribunal pronounced the judgment in the open court on 15.12.2015.
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