CESTAT Rules Reassessment of Copper Busbars Exceeded Jurisdiction: SC to Hear Customs Appeal [Read Judgement]

In a classification dispute involving polyester bed sheets, the Supreme Court of India has admitted a civil appeal filed by the Customs against the respondent challenging the relief granted by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai.

The appeal arises from CESTAT’s final order, which had ruled in favour of the assessee by holding that the imported goods were classifiable under Customs Tariff Heading (CTH) 6304 and not under CTH 5407 as contended by the Revenue.

The case pertains to a consignment declared as “Polyester Bed Sheets” imported by MSS India Pvt Ltd the respondent. The Revenue alleged misdeclaration, asserting that the goods were in fact “Polyester Woven Fabrics” and should be classified under CTH 5407, which covers woven fabrics of synthetic filament yarn.

Based on sample testing and investigation, the adjudicating authority had reclassified the goods, confirmed duty demand, and imposed penalties including a ₹2.5 lakh redemption fine and ₹1 lakh penalty under Section 112(a) of the Customs Act, 1962. However, the authority did not invoke Section 114A for mandatory penalty, prompting the department’s appeal before the Tribunal.

CESTAT, in its detailed ruling, rejected the Revenue’s classification and penalty arguments. Referring to its earlier decision in Commissioner of Customs (Port) vs. Silpha Finvest Pvt. Ltd., the Tribunal held that the goods retained their identity as bed sheets despite being made of 100% polyester.

It emphasized that Chapter 63 of the CustomsTariff Act deals with made-up textile articles, and CTH 6304 specifically includes bedspreads and similar furnishing items. The Tribunal concluded that the goods were correctly classified under CTH 6304 and were not liable for confiscation or penalty, thereby dismissing the Revenue’s appeal.

The Supreme Court, in its order, condoned the delay in filing and admitted the appeal. The bench comprising Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar heard the matter and allowed the Revenue’s plea for further adjudication.

The admission signals that the apex court will now re-examine the classification issue and the scope of penal provisions under Section 114A in cases of alleged misdeclaration.

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