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2018 (10) TMI 976 - AT - CustomsClassification of imported goods - Bonded Fabric Width 58 - whether classifiable under Chapter CTH 5907 00 99 or under CTH 5407 10 39? - Rule 3(b) of the General Rules for interpretation of the Tariff - Held that - The imported goods were in the form of bonded fabrics made up of two layers- the bottom layer comprising of knitted fabric and the top layer made up of woven fabrics. The two have been bonded together to form the imported goods. The classification claimed by the importer is under Chapter 59 as fabrics which are impregnated or coated. This classification is clearly in-correct in view of the opinion given by the Textile Committee, Mumbai to the effect that the imported goods are neither coated nor impregnated. Thereby, we rule out the classification under Chapter 59, claimed by the importer. In the circumstances, the classification is required to be decided on the basis of the General Rules for Interpretation of Import Tariff. Rule 3 provides for classification when the imported goods are prima facie classifiable under two or more headings. The imported goods are composite goods made up of knitted (Chapter 60) as well as woven (Chapter 54) fabrics. In terms of Rule 3 (b), the essential character will decide such classification. Original Authority has decided the classification under Chapter 54 considering the imported goods to have the essential character of woven fabrics. We agree with the view of Commissioner (Appeals) that neither knitted nor woven can be considered to be the essential character of the imported goods. In that case, Rule 3 (c) has to be resorted to whereby classification has to be decided as per the heading occurring last in numerical order among those which equally merit classification - The most appropriate classification would thus be under CTH 6006 32 00. Appeal dismissed - decided against Revenue.
Issues: Classification of imported goods under CTH 5907 00 99 challenged by Revenue, Original Authority's assessment under CTH 5407 10 39, Commissioner (Appeals) classification under CTH 6006 32 00, Appeal by Revenue against Commissioner (Appeals) decision.
Analysis: 1. The appeal was filed by the Revenue challenging the classification of imported goods under CTH 5907 00 99. The imported goods were composed of two layers of fabric - knitted and woven, bonded together. The Original Authority assessed the goods under CTH 5407 10 39, considering the essential character of woven fabrics based on the weight percentage. However, the Commissioner (Appeals) classified the goods under CTH 6006 32 00, as neither knitted nor woven fabric was deemed essential. The Revenue sought assessment as per the Original Authority's decision. 2. The Tribunal observed that the imported goods were not coated or impregnated, ruling out classification under Chapter 59. The classification was then determined based on the General Rules for Interpretation of Import Tariff. Rule 3 was applied as the goods were prima facie classifiable under two headings - knitted (Chapter 60) and woven (Chapter 54) fabrics. The essential character was to decide the classification, with the weight percentage of woven and knitted fabrics being crucial. 3. The test reports showed the percentages of knitted and woven parts of the imported composite fabrics, with woven fabrics accounting for approximately 51% by weight. The Commissioner (Appeals) opined that neither component had the essential character of the goods, leading to classification under CTH 6006 32 00 as per Rule 3 (c). The Tribunal agreed with this view, upholding the Commissioner's decision and rejecting the Revenue's appeal. 4. The Tribunal found no flaw in the Commissioner (Appeals) order, which was upheld, resulting in the rejection of the Revenue's appeal. The judgment was dictated and pronounced in open court, concluding the legal proceedings on the matter.
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