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2024 (6) TMI 400 - AT - CustomsIssues involved: Classification of imported consignments under different tariff headings, imposition of penalty on the Director of the firm. Classification of 181 consignments: The Revenue sought to classify all 182 consignments under CTH 54.07, assuming they were for umbrella manufacturing. However, after testing, the Commissioner confirmed that 181 consignments were coated/impregnated fabrics and upheld the classification of 5903 adopted by the Appellant. The Tribunal dismissed the Revenue's appeal based on previous decisions emphasizing that end use alone cannot determine classification, and the nature of material used is crucial. Classification of 1 consignment: The Appellant maintained that 1 consignment should be classified under CTH 5407, not 5903 as claimed in the Show Cause Notice. The Adjudicating authority erred in confirming the demand based on incorrect classification. The Tribunal set aside the duty, interest, and penalty imposed on this consignment, as the Appellant had correctly paid Customs duty under CTH 5407. Penalty on the Director: Since there was no mis-declaration or mis-classification in the case of the 1 consignment, the penalty imposed on the Director was set aside. The Tribunal allowed the Appeals filed by the importer and the Director, while dismissing the Revenue's Appeal. This judgment highlights the importance of accurate classification based on the nature of materials used, rather than just end use, and emphasizes the need for proper testing and documentation to support classification decisions.
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