2018 (4) TMI 1344 - AT - Customs

Classification of billiards cloth - whether classified under heading number 5112 1930 and 5112 3030 or under heading number 9504 9090 of the First Schedule to the Customs Tariff Act, 1975? - Held that - We have no reason to misdoubt the claim of the appellant that cloth for use on billiard tables may be of the same material but, in the absence of presentation in made to measure form or for direct use on billiard tables, find ourselves unable to accept the proposition that intended use should be inferred from the declaration. The samples are established to be composed of fabric or fabric mixtures and no different from imports of textile fabric for other uses. - no reason to discard the re-classification of the goods under chapter 51 Extended period of limitation - Held that - The earlier bills of entry had been filed on 10th February 2006, 4th July 2006 and 10th May 2007 whereas the show cause notice was issued on 8th November 2007 which is clearly beyond the normal period of limitation. Penalty - confiscation - Held that - without the taint of misdeclaration on the part of the importer, the goods are not liable for confiscation, under section 111 of Central Excise Act, 1962, and, therefore, penalty under section 112 of the Customs Act, 1962 does not also lie. Appeal allowed in part.

Summary

Issues:
Classification of 'billiards cloth' under different headings, reclassification based on test results, classification under Customs Tariff Act, 1975, reclassification of earlier imports, limitation period for issuing show cause notice, differential duty recovery, penalty imposition.

Analysis:

1. The appeal was filed against an order for recovery of differential duty, interest, and penalty imposed on the appellant for goods imported under various bills of entry. The core dispute revolved around the classification of 'billiards cloth' under different headings as per the adjudicating authority and as claimed in the bills of entry.

2. The Textile Committee's report was crucial in reclassifying the goods based on their composition, either fabric and wool mixture or pure wool. The appellant argued that test results should not be the sole basis for reclassification, emphasizing trade parlance and classification notes in the Customs Tariff Act. The imports from the earlier period were also contested for reclassification based on current import samples.

3. The Authorized Representative supported the need for fresh classification due to the goods being imported in rolls and composed of wool or fabric mixtures. The intended use argument was refuted, stating that the goods' presentation did not align with their usage, leading to the classification under a different chapter.

4. The tribunal examined the imports presented in running length and not as ready-to-use pieces for billiards tables. Despite similarities in material, the absence of specific presentation for billiard tables led to the acceptance of reclassification under a different chapter. The appellant's reliance on previous tribunal decisions was not considered due to the raised limitation under the Customs Act.

5. The tribunal found the show cause notice issued beyond the limitation period, highlighting that 'billiard cloth' was not a specific entry in the Customs Tariff Act. No evidence of wilful misdeclaration or suppression justified invoking the extended period for recovery. Consequently, the demands related to earlier bills of entry were set aside.

6. Given the limited differential duty and absence of misdeclaration, the goods were deemed not liable for confiscation or penalty under the Customs Act. The impugned order was set aside, except for upholding the classification and limiting the recovery to the differential duty in a specific bill of entry.

This detailed analysis encapsulates the classification dispute, reclassification basis, limitation period considerations, and the tribunal's decision regarding differential duty recovery and penalty imposition in the legal judgment.