The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Burden of proof on the taxing authorities to show Classification of item in question is taxable in the manner claimed by them.
The Appellants, Ms Sunrise Traders are engaged in the business of made up articles of textiles and importing 100 % Polyester Bed Cover. The Appellants filed bills of entry declaring the goods as 100% polyester bed cover under CTH 63041930, the goods imported were examined by Directorate of Revenue Intelligence (DRI) where it was observed that the clothes material were of 3 pieces of clothes sheets roughly and unsymmetrically stitched on two sides, one side fold and one side open. The samples were drawn and examined by the Expert Committee on Textiles, Surat. DRI sent a letter to the Textile Committee, Mumbai along with samples for testing and classification purposes; along with the remarks and conclusions of the Expert Committee that these are not made up. Meanwhile a sample was drawn by the Customs and sent to the Textile Committee and the report received by post where it stated that the sample is to be classified as “made up” as declared by the Appellant in bills of entry. The said report is contrary to the report procured by DRI. A letter to the Textile Committee on 29.03.2017 was sent stating two different reports have been received, so the office copy be sent to their office to which the Director of Textile Committee informed the test report received at your end “at DRI end has been found to be tempered with”.
Appellants filed appeals before CESTAT which vide order remanded the matter directing that the case be decided by the adjudicating authority on the basis of statutory definition and Chapter Notes of Section XI of Custom Tariff as well as on HSN Notes not on the general meaning of made ups. The Adjudicating authority vide order has again confirmed the demands on the same grounds.
The coram of Judicial Member, Ramesh Nair and Technical Member, Raju held that if the goods are not classifiable under the chapter heading proposed by the revenue thereafter even if the goods is classified under the chapter heading claimed by the assessee is correct or not, the case of the department will fail.
“In view of the above settled law, irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. Since the revenue has not been able to discharge their burden of proof. Hence the classification of goods declared by the appellants cannot be disturbed,” the CESTAT said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
