2026-VIL-276-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported Goods - The appellant imported goods declared as "Polyethylene Fiber Product Name HB26 A" and classified them under CTH 39201099 - Department alleged that the goods were correctly classifiable under CTH 540730 as "Woven fabrics of synthetic filament yarn" and raised a demand for differential duty - Whether the imported goods were correctly classified under CTH 39201099 as plastic articles or should be classified under CTH 540730 as textile materials – HELD - The Tariff entries under Chapters 39 and 54 of the Customs Tariff clearly distinguish between plastic articles and textile materials. Relying on the Chapter Notes and explanatory notes, the Tribunal found that the imported goods, being a composite material made of ultra-high molecular weight polyethylene (UHMWPE) fibers, were correctly classifiable under CTH 540730 as woven fabrics of synthetic filament yarn, and not under CTH 39201099 as plastic articles. The classification of the goods under CTH 540730 and the consequential demand of differential duty is upheld - The appeal was partly allowed, upholding the classification and demand of differential duty, but setting aside the confiscation and penalty - Confiscation of Goods and Penalty - The mere difference in the classification of goods by the importer and the department during assessment does not render the goods liable to confiscation under Section 111(m) of the Customs Act. Since the appellant was a public undertaking and there was no evidence of any mala fide intent, the finding that the goods were liable to confiscation, is set aside. Consequently, the penalty imposed under Section 112 is also set aside.
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