“Girls Leggings, Kids Leggings Girls Pyjama, Half Stockings” Classifiable as Pyjamas: CESTAT Dismisses Revenue Dept’s Appeal [Read Order]

The Kolkata Bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that “Girls Leggings, Kids Leggings  Girls Pyjama, Half Stockings” are  Classifiable as Pyjamas and not as trousers. The tribunal dismissed the appeal of revenue department regarding classification of good.

An intelligence was gathered by DRI that the respondent-importer, M/s. Binod Kumar Agarwal was involved in evasion of Customs duty by way of mis-declaration in description or classification in import of ladies trousers classifying under CTH 61046300 (attracting BCD of 10% or Rs.98 per piece whichever is higher).

Based on the said intelligence, residence and business premises were searched and varieties of Half Stockings / Leggings / Pyjama were recovered and detained for further investigation. Samples of the goods were drawn from the import consignments, stored at two premises and forwarded to Joint Director, Textile Committee, Government of India, New Delhi for testing the same with respect to their constituent material, presence of prohibited material and appropriate HS classification. 

The Textile Committee report indicated that the goods with the declared description as (i) Girls Legging (Skin Tight) / Half-Stocking under CTH 61152990 and (ii) Knitted Girls Pyjama under CTH 61083210 in the Bill of Entry were ‘Ladies/Girls – Polyester Knitted Trousers’ classifiable under HS code 6104.63. 

In view of the report, the goods were seized under reasonable belief that same were liable for confiscation. A Show Cause Notice was issued to the respondent on 09.06.2016 for reclassification of the imported goods under CTH 61046300, for confiscation of the seized goods, to demand differential duty and to impose penalty on the respondent. The adjudicating authority dropped the proceedings against the respondent.

The Authorized Representative appearing on behalf of the revenue submitted that as per the report of the Textile Committee, the captioned items are Girls Trousers and therefore the respondent has misclassified the same. Accordingly, he contends that the impugned order is to be set aside. 

On the other hand, the Counsel appearing on behalf of the respondent submitted that the goods in question are Girls / Ladies Pyjama and Leggings and they have paid appropriate duty thereon; therefore, the impugned order is to be upheld.

In the order, the adjudicating authority found that the seized garments are multi-coloured and of multi-print which make them more akin to sleeping or night dress or casual wear and not formal wear. Even the Textile Committee was also not sure that the seized items would definitely be considered as a Trouser but says that it may be classified as Trouser.

The adjudicating authority observed that “38. The essential ingredients of a Trouser are not fulfilled by the seized items. It is true that the general definition of Trouser because of its broad encompass as said in the SCN can be used to cover the seized items but that would be a mere exercise in technicality not representing the true facts. Pyjamas can also have two seams per leg but that will not make them Trousers.

Admittedly the importer had imported similar garments in the past. Therefore these, like the live consignment were not Trousers but Pyjamas and correctly classified under Customs Tariff Item No. 61083210. It is pertinent that this Tariff Item Number applies specifically to Night Dress and Pyjamas made of synthetic fibres.”

In light of the observation of the adjudicating authority, the two member bench comprising Ashok Jindal, Member (Judicial) and K Anpazhakan, Member (Technical) held that the goods in question cannot be termed as Girls Trousers and upheld the impugned order.

The CESTAT dismissed the appeal filed by the Revenue. Subrata Debnath, Authorized Representative for the Appellant and R. K. Kapoor appeared for the Respondent.

To Read the full text of the Order CLICK HERE

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