2026-VIL-625-CESTAT-AHM-CU
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CUSTOMS CESTAT Cases

Customs - Classification of synthetic fabric - Respondent imported synthetic fabric and classified it under CTH 54075290 claiming duty exemption under Notification No. 137/2000-Cus. – Upon testing by CRCL Kandla, the imported goods were found to have less than 85% texturized polyester yarn – Dept of the case the imported synthetic fabric is correctly classified under CTH 54078290 – HELD - Agree with the classification confirmed by the Deputy Commissioner under CTH 54078290, as the CRCL Kandla test reports clearly showed that the imported goods had 60-63.5% texturization, which did not meet the criteria for classification under CTH 54075290 - The test reports from CRCL Kandla were adequate to determine the correct classification of the imported goods, and there was no evidence to suggest that the department or the respondent had doubted the test reports until much later - The test reports given by CRCL Kandla gives composition of goods and thus, it is adequate to determine classification of imported goods. The classification confirmed by the Deputy Commissioner is upheld - Determination of assessable value - The department redetermined the assessable value of the imported goods based on the value of comparable goods imported by other units in Kandla SEZ – HELD – Matter is remanded to the Adjudicating Authority to provide the respondent with the documents/invoices/data relied upon for the re-determination of the value, and to afford the respondent a full opportunity to make submissions before taking a decision. The department has to first reject the transaction value declared by the respondent and then proceed to determine the value by following the Customs Valuation Rules, by providing the relied upon data/contemporary import data of goods of similar quality and characteristics - Scope of show cause notice and availability of duty exemption under Notification No. 137/2000-Cus - The respondent was operating under a Letter of Permission (LOP) issued by the Joint Development Commissioner, Kandla SEZ, which permitted the procurement of certain raw materials and the manufacture and export of finished goods - Whether the respondent was permitted to import fresh fabrics for the manufacture of readymade garments under the LOP – HELD – The matter is remanded to the Deputy Commissioner, Kandla SEZ, to seek an opinion from the office of the Development Commissioner on the LOP, and if the respondent was permitted to import fresh fabrics for the manufacture of readymade garments, the duty determination shall be done in accordance with the relevant Notifications applicable to a unit operating in the SEZ. The Deputy Commissioner not to be affected by the various aspects of the investigation conducted by the DRI, which were not part of the show cause notice, while finalizing the provisional assessment of the goods - The appeal is allowed by way of remand
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