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TMI Blog2024 (12) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... mported thread classifiable under CTH 5403 since it is found the description of the goods has not been challenged nor has any test or expert opinion been sought for. As rightly stated by the appellant and also held by the Hon ble Supreme Court in CC v. Dilip Kumar [ 2018 (7) TMI 1826 - SUPREME COURT ], that when the issue pertains to imposing a levy, the onus is on the Department to prove that the goods are leviable to such duty. The issue involves a question of fact which is very technical in nature as seen from the portions highlighted in the extract of the OIO above. The classification of the impugned goods between Embroidery Yarn and Embroidery Thread , requires a physical scrutiny of the characteristics of the goods. However, neither are the goods available to us nor is there any manufacturers product literature; examination report by the department or a test report / opinion of an expert body been placed - there is a lack of evidence to back the findings made by the Ld Adjudicating Authority. To avoid a confusion on basic facts, it was for the departmental authorities to gather the product literature, process of manufacture and even a test report/ opinion from the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive appeared for the respondent. 3.1 The Ld. Advocate submitted that since the issues in both the appeal are similar, he is making common submissions for which the details were submitted as under ; Company Name Suchitra Yarn Traders Suchitra Silk Pvt. Ltd. Period of Dispute ( relevant period ) July 2012 to August 2012 May 2012 to February 2013 Issue Levy of ADD on import of Embroidered Thread Demand (Anti-Dumping Duty) Rs. 9,87,884/- along with interest under Section 28AA Rs. 30,93,706/- along with interest under Section 28AA Penalty (under Section 112 of Customs Act) Rs. 3,00,000/- Rs. 9,00,000/- Notification Concerned Notification No. 23/2012-Cus (ADD) dated 04.05.2012 He submitted that the ADD Notification is a levy notification and not an exemption notification as is evident from Section 9A of the Customs Tariff Act, 1975 which is a charging provision. He placed reliance on the judgment of the Hon ble Supreme Court in CC Vs. Dilip Kumar [2018 (361) E.L.T. 577], to state that when the issue pertains to levy of the duty, the onus is on the Department to prove that the goods are leviable to such duty. Further they had imported 100% Rayon Embroidery Thread from China. Yarn is a gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is liable for penalty under Section 112. She prayed that the impugned order may be upheld. 4. We have gone through the appeal memorandum carefully and the submissions made. We have also heard the rival parties. We find that the description and classification of the imported goods i.e. 100 PCT Rayon Embroidery Thread Bright Raw White on Hand 120D/2 A Grade 50 inches 200 grams / Hank under CTH 540341, is not presently disputed. It is also in conformity with the COO certificate accompanying the goods. It is also not disputed that impugned goods fall under the category of 'Artificial filament yarn'. Viscose Filament Yarn attract levy of ADD in terms of Sl. No. 1 of Notification No. 23/2012-Cus dated 4.5.2022. It is the appellants contention that the impugned goods are embroidery threads and that under the Customs Tariff there is no difference between 'embroidered yarn' and 'embroidery thread'. Hence since embroidered yarn is specifically excluded from the scope of Notification No. 23/2012-Cus, no duty is payable by them. 5. For a better understanding of the issue the relevant portion of the notification is reproduced below ; S. No Heading Description of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cards, reels, tubes or similar supports, of a weight (including support) not exceeding: (i) 85 g in the case of silk, waste silk on man-made filaments; or (ii) 125g in other cases; (b) In bells, hanks or skeins of a weight not exceeding (i) 85g in the case of man-made filament yarn of less than 3,000 decitex, silk or silk waste; (ii) 125g in the case of all other yarns of less than 2,000 decitex; or (iii) 500 gm in other cases. (c) In hanks or skeins comprising several smaller hanks or skeins separated by dividing threads which render them independent one of the other, each of uniform weight not exceeding:- (i) 85g in the case of silk, waste silk or man-made filaments; or (ii) 125g in other cases 5. For the purposes of heading 52.04, 54.01 and 55.08, the expression sewing thread means multiple (folded) or cabled yarn: (a) Put up on supports (for example, reels, tubes) of a weight (including support) not exceeding 1,000 g (b) Dressed for use as sewing thread; and (c) With a final Z twist 18. As seen from Note 4A to Section XI, it appears that yam normally comes on supports (cards, reels, tubes etc) or in bails/hanks or skeins. Where as sewing thread in terms of Note 5 to Section XI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efly used in sewing. See Bonded Thread. 2. The term is often loosely applied to yarn used for weaving and knitting, for example warp thread, threads per inch etc., although it properly applies only to yarns twisted for sewing or other needle-work. 21. As seen from Section Notes definitions given in Fairchild's Dictionary of Textiles, yarn and thread are distinct and sewing thread and thread are synonymous and used interchangeably. The imported goods i.e yarn of two filament (i.e120D/2) and not plied but thread has to be invariably plied . Sewing threads are indicated by number system indicating its size like number 40, 60 etc. No numbers are declared for the imported threads. Thus, the imported goods appear to be yarn and not thread. The purpose of mis-declaring the goods as thread is to misguide and mis classify under the heading 5401 as thread with an intention to evade payment of anti-dumping duty. When the importer was questioned on the basis of HS code indicated in the country of origin, they have conceded that goods are classifiable under heading 540341 as indicated therein which covers yarn. Further to come out from the charge of mis-declaration of description they are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturers product literature; examination report by the department or a test report / opinion of an expert body been placed before us. Even the Ld. Adjudicating Authority depends on the importer s admission during the personal hearing to support his arguments, apart from assumptions and presumptions on what the qualities of the imported goods were, to make it appear to him that the impugned goods are not thread but yarn without challenging the description of the goods. We thus find that there is a lack of evidence to back the findings made by the Ld Adjudicating Authority. On the other hand as per the impugned order chapter heading number 5401 covers sewing thread of man-made filaments whereas all other varieties of synthetic or artificial threads have been placed in the category of yarn under chapter heading number 5402, 5403, 5405 and 5406 of the Customs Tariff Act 1975. However he goes on to state that from a perusal of chapter heading number 5403 it is clear that it covers various varieties of filament yarn and there is no mention of any variety of thread there in, ignoring the fact that only sewing thread is excluded from CTH 5403. It appears to us that if thread was not at all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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