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2015 (12) TMI 1000 - CESTAT KOLKATA

2015 (12) TMI 1000 - CESTAT KOLKATA - TMI - Confiscation of imported goods being warp cut pile fabrics - velvet effect - Denial of the benefit of Notification No.30/2004-CX dated 09.07.2004 - Classification under under CTH 58013711 or CTH 50079090 - Imposition of redemption fine and penalty - Held that:- If the appellant had been aware of the intelligence received by DRI then amendment should have been sought exactly for the description as per the details found during examination of the goods. T .....

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e seller of the goods to return the same. However, as the amendments sought was not for the correct description of goods, therefore, the same could not have been allowed by the Adjudicating authority. However, reasoning of Adjudicating authority for rejection, that amendment application was filed after receipt of DRI intelligence, is not correct as appellant has not sought the exact description of goods in the written amendment application dated 10.11.2014. It is accordingly held that request fo .....

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13720. Scientific literature furnished by the appellant do indicate that there are categories of uncut pile fabrics in the market which are also known as velvets (Epingle & Terry Velvet). Corresponding entries under Customs Tariff for Cotton Velvet fabrics are 5801 2710 & 5801 2720 but the word “velvet” has not been mentioned in these classification at all. The crucial words are “warp pile fabrics, cut” (58012710) & other (5801 2720). Thus more important in the classification of a fabric under 5 .....

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ave been taken as the same were not manufactured in India - appellant are entitled to CVD exemption under Notification No.30/2004 dated 09.07.2004.

Appellant came to know about the discrepancy and mix up in some of the imported goods as per e-mail dated 03.11.2014 from the supplier and appellant made a bill of entry amendment request as per the changed description given by the supplier of the goods. Existence of such an e-mail and its receipt by the appellant is not disputed. If the a .....

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onfiscation of goods under Section 111(m) and Section 119 of the Customs Act, 1962 are not justified and are set aside - Decided against Revenue. - Appeal Nos. CA-75215, 75296, 75297/15 - ORDER NO.FO/A/75736-75738/2015 - Dated:- 15-12-2015 - Dr. D.M. Misra, Member(Judicial) And Shri H.K.Thakur, Member(Technical) For the Petitioner : Shri S.K.Mehta, Advocate For the Respondent : Shri A.Kumar, AC(AR) ORDER Per Shri H.K.Thakur. These appeals have been filed by the main appellant M/s.Chemsilk Pvt.Lt .....

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24,340/-. Under Order-in-Original dated 05.03.2015 Adjudicating authority held that Item No.7 & 8 of the Bill of Entry No.7135365 is velvet woven fabric classifiable under CTH 58013711 and rejected the classification of CTH 50079090 claimed by the appellant. Adjudicating authority also denied the benefit of Notification No.30/2004-CX dated 09.07.2004 to all the items of Bill of Entry No.7135365 dated 21.10.2014 to determine a total duty liability of ₹ 78,88,149/-. The goods imported we .....

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on behalf of the appellant, as well as through written submissions, argued that conditions of provisional release of imported goods were highly unreasonable, therefore, appellant did not get the imported goods provisionally released. That amendment of Bill of Entry was sought after receipt of a letter dated 03.11.2014 (page 35 of Appeal Memo) from the supplier of imported goods. That first amendment was sought to be made by an oral request to the assessing officer on 03.11.2014. That Assessing O .....

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utta High Court and Revenue seized their goods on 18.11.2014 and their amendment application was also rejected on 08.01.2015 on the grounds that amendment request was made after receipt of intelligence from DRI. That a request made on 03.11.2014 by the appellant was corroborated by the statement of Shri Sudip Kundu (page 164 of the paperbook) which has not been disputed in the show cause notice or adjudication order. That statement of Shri Aditya Sarda before DRI on 19.11.2014 also states that o .....

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f goods on first check basis. That samples of disputed goods were sent for test on 26.11.2014 and after receipt of test report appellant sought classification under CTH 58013720 whereas Revenue decided the classification under CTH 58013711 and that classification of the goods was initially claimed under chapter 50. That the test reports also support the view of the main appellant. That the imported goods are Cut Pile Velvet fabrics classifiable under CTH 58013720 and not under CTH 58013711 claim .....

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all categories of velvets will fall under 58013711 is fallacious and should be set aside. That admissibility of Notification No.30/2004-CE and payment CVD was required to be decided in conformity with law and based on case laws under which benefit of Notification No.30/2004-CE was extended to similar imports. He relied upon case laws of Apex Court and Tribunals to argue that no credit on the inputs used in the manufacture of imported goods is taken as the goods are not manufactured in India. In .....

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sought was also not what was found on examination and test because amendment application was made on the basis of description provided by the seller in the e-mail. It was his case that appellant was not sure of the nature of imported goods, therefore, 100% examination on first-check basis was asked. That as intention to evade duty was not existing in the facts of this case hence confiscation of goods and imposition of penalties is not justified. 3. Shri A.Kumar, AC(AR) appearing on behalf of the .....

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r. That no velvet can be classified under 58013720 chargeable to 10% or ₹ 68 per sq.m. as claimed by the appellant. That test report is not binding upon the Revenue to determine the classification of the fabrics. That all the other goods were also liable to confiscation under section 119 of the Customs Act, 1962. Regarding non-admissibility of exemption Notification No.30/2004-CE it was argued that Adjudicating authority has elaborately discussed this issue in para 30.3 to 30.6 of the Orde .....

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ore the same was detected by the Revenue? (ii) Whether the goods imported at Sr.No.8 of the B/E dated 21.10.2014 should be classified under CTH 58013720(Cut Pile Fabrics) claimed by Appellant after test or the same should be under CTH 58013711 (Uncut Pile Fabrics) decided by Department? (iii) Whether the benefit of exemption Notification No.30/2004-CE is admissible to the appellant so far as levy of CVD is concerned? (iv) Whether confiscation of goods and imposition of penalties have been correc .....

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e case records that an e-mail dated 03.11.2014 was received by the appellant M/s.Chemsilk Commerce Pvt.Ltd. from the seller Zhejiang Cathaya Transtra Co.Ltd., 105, TI Yu Chang Road, Hangzhou, China. The content of this letter is as follows:- While tallying with our stocks manager at the warehouse in Hangzhou, it came to our notice that 25487.70 Mtrs Silk Mixed dyed and unprinted 130 Grams per meter width 44 which was sent to you under our Invoice No.RS14TE050104 dated September, 28, 2014 was not .....

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can sit for settlement and compensate you for which our representative shall visit you after fixing time. 5.1 The original description given in the bill of entry was 2547.70 mtrs. Silk Mixed Fabrics Dyed and Printed weight 130 grams per meter width 44 - and as per the e-mail received on 03.11.2014 the same quantity was mentioned to be consisting of 100% polyester Fabrics Dyed and Printed 120 grams per meter. There is no investigation to the effect that e-mail dated 03.11.2014 was not received by .....

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dated 03.11.2014 received from the supplier of the goods which was not the actual description found on examination. Accordingly we are of the view that oral request for amendment was made on 03.11.2014 and appellant was not aware of the exact description of goods at the time of filing the bill of entry that a part of the goods will be fabrics of CTH 5801. Appellant also asked for 100% examination of the imported goods and there was an option from the seller of the goods to return the same. Howe .....

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ence received by DRI. 6. So far as the classification of goods imported at Item No.8 of the Bill of Entry are concerned the samples of the goods were drawn and sent to Textiles Committee, Ministry of Textiles, Govt. of India, Mumbai who confirmed the same to be warp cut Pile fabrics. It is the case of the Revenue that all categories of velvet fabrics has to be classified under CTH 58013711 irrespective of the fact whether Pile yarn is cut or uncut. Appelalnt on the other hand argued that warp cu .....

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ics, epingle (uncut) 10% or ₹ 140 per sq. metre, whichever is higher 5801 37 19 Velvet 10% or ₹ 68 persq. Metre, whichever is higher 5801 37 20 Other 10% or ₹ 140 per sq. metre, whichever is higher 5801 37 90 Warp pile fabrics, cut Other - 6.1 As per above tariff description uncut warp pile fabrics are classifiable under CTH 58013711 & 58013719 whereas cut warp pile fabrics are classifiable under CTH 58013720. Further according to Fairchild Dictionary of Textiles a cut pi .....

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ven ground yarns hidden by the pile. Cutting wires carry knives at their ends. The pile is formed by looping the yarn over the wires, and as each wire is withdrawn its knife severs the pile loop, producing the cut pile. In contact, in uncut pile the loops are not cut and present a different surface appearance. Synonym; velvet pile, See DOUBLE-WOVEN PILE FABRIC. 6.2 Similarly uncut pile fabric and uncut velvet has been described in the above dictionary as follows:- Uncut pile fabric A looped fabr .....

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eedle making loops that are cut (cut velvet or uncut (pile velvet). 2. Something like velvet in softness or appearance. 3. The furry skin that covers the growing antless of a deer (Emphasis supplied) 6.4 From the above literature and the test reports of the present consignment it is observed that goods imported by the main appellant are warp cut pile fabrics whereas velvet effect can be obtained both by uncut pile as well as warp cut fabrics . As per above distinctions available an uncut pile fa .....

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2720 but the word velvet has not been mentioned in these classification at all. The crucial words are warp pile fabrics, cut (58012710) & other (5801 2720). Thus more important in the classification of a fabric under 5801 3711/19 and 5801 3720 will be the cut or uncut nature of warp pile . Accordingly we are of the considered opinion that stand of the Adjudicating authority and the learned A.R., that all categories of velvet fabrics will invariably fall under 5801 3711, is not correct and is .....

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arned A.R. relied upon the findings of the adjudicating authority in paras 30.3 to 30.6 of the Order-in-Original dated 05.03.2015 where the benefit of exemption under Notification NO.30/2004-CE dated 09.07.2004 has been denied on the basis of Five Member CESTAT case law of Priyesh Chemicals & Metals [2000 (120) ELT 259 (Tribunal-LB)] and Apex Court s order in the case of Collector of Customs vs. Presto Industries [2001 (128) ELT 321 (SC)] where similar conditions regarding not taking of cred .....

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Customs, Chennai [2015-TIOL-74-SC-CUS]. Relevant Sr.No.122 of Notification No.6/2002-CE & condition No.20 are reproduced below.:- S. No. Chapter or Heading No. or sub-heading No. Description of goods Rate under the First Schedule Rate under the Second Schedule Condition No. 122 5402.10 5402.41 5402.49 5402.51 5402.59 5402.61 or 5402.69 Nylon filament yarn or polypropylene multifilament yarn of 210 deniers with tolerance of 6 per cent. Nil - 20 20. If no credit under Rule 3 or Rule 11 of the .....

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it is admissible under the Cenvat Rules. On this basis, the CEGAT has come to the conclusion that when the credit under the Cenvat Rules is not admissible to the appellant, question of fulfilling the aforesaid condition does not arise. In holding so, it followed the judgment of the Bombay High Court in the case of Ashok Traders v. Union of India [1987 (32) E.L.T. 262], wherein the Bombay High Court had held that it is impossible to imagine a case where in respect of raw nephtha used in HDPE in t .....

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992 (61) E.L.T. 352 (S.C.)] which was affirmed by the Constitution Bench in the case of Hyderabad Industries Limited v. Union of India [1999 (5) SCC 15 = 1999 (108) E.L.T. 321 (S.C.)]. In a recent judgment pronounced by this very Bench in the case of AIDEK Tourism Services Private Limited v. Commissioner of Customs, New Delhi [Civil Appeal No. 2616 of 2001 - 2015 (318) E.L.T. 3 (S.C.)], the principle which was laid down in Thermax Private Limited and Hyderabad Industries Limited was summarised i .....

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ds, in addition to the Customs duty leviable under Section 12 of the Customs Act read with Section 2 of the Tariff Act. The explanation to Section 3 has two limbs. The first limb clarifies that the duty chargeable under Section 3(1) would be the Excise duty for the time being leviable on a like article if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation deals with the situation where a like article is not so produced or m .....

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he purpose of Section 3(1), that such an article can likewise be manufactured or produced in India. For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary. For quantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of Excise duty was leviable the .....

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