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2019 (3) TMI 1420 - CESTAT HYDERABADClassification of goods - Polyurethane Foam - whether the polyurethane products manufactured by the appellant are classifiable under 9401 as seats or under chapter heading 39263010 as ‘fittings for furniture, coach work or the like of polyurethane’? - Held that:- It is not in dispute that the articles in question are made of polyurethane and nothing else but they can be used only for seats. It is also not in dispute that they are not seats by themselves but become seats when attached to the frame and covered with upholstery. Chapter note 1(d) of chapter 94 excludes articles falling under chapter 39 from this chapter. Similarly, chapter note 2(x) of chapter 39 excludes articles falling under chapter 94. Thus, the chapter notes mutually excluding each other do not help in determining the classification. Therefore, Rule 3(a) of the general rules of interpretation must be applied to which is a more specific entry. The article in question is a polyurethane article made specifically for fitting on furniture or coach seats, etc., and is not a seat in itself. This, is a more specific description of the goods in question than a seat. Therefore, the goods in question are correctly classifiable under 3926 3010. Confiscation - Penalty - Held that:- The classification in favour of the revenue. However, this being a classification issue, we find that the assessee may have entertained a genuine belief that their goods were classifiable under 9401. Therefore, no allegation of fraud, misstatement or suppression of facts can be attributed to them - Confiscation of the goods and imposition of penalties are also not justified in this case. Appeal allowed in part.
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