2026-VIL-1384-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Made-up Textile Articles - Extended Period of Limitation - Appellant imported umbrella panel fabric cut in triangular shape and size through various Bills of Entry, classifying the goods under Chapter Tariff Heading 6307 as made-up textile articles. The classification was accepted by Customs officers at the time of assessment. Approximately two years later, an Audit Consultative Letter was issued alleging misclassification and proposing reclassification under CTH 5407 as woven fabrics of synthetic filament yarn - Whether umbrella panel fabric cut in triangular shape and size should be classified as made-up textile articles under CTH 6307 or as woven fabrics under CTH 5407 and whether extended period of limitation can be invoked for classification disputes without evidence of suppression - HELD - The goods are cut in triangular shape which falls within Section Note 7 of Section XI of the Customs Tariff Act, 1975, defining made-up articles as those cut otherwise than into squares or rectangles. Once fabric is cut into triangular panels, it acquires a distinct identity and character. The essential character of the goods is umbrella panels and not textile fabric. In commercial understanding, the goods are known as and sold as umbrella panels, not as textile fabrics. CTH 6307 specifically covers made-up textile articles whereas CTH 5407 is a general heading for woven fabrics - As per General Rules of Interpretation, a specific heading must be preferred over a general heading. The prior decision of the Tribunal in Karnataka Umbrella Manufacturers directly supports this classification – Further, the extended period of limitation cannot be invoked for classification disputes when there is no suppression or misdeclaration. All imports were made through Bills of Entry, goods were fully described and classification was openly declared. Customs assessed goods without raising any objection at the time of assessment. Show Cause Notice issued after significant time lapse is not sustainable under Section 28(4) of the Customs Act - The impugned order is set aside on both merits and on the ground of limitation. The demand for customs duty, interest and penalty is set aside – The appeal is allowed
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