TaxTMI 
TaxTMI 
2001 (2) TMI 720
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....fiable under Heading No. 59.07 of the Customs Tariff corresponding to sub-heading No. 5907.12 of the Central Excise Tariff. Heading No. 59.07 of the Customs Tariff covered the following :- "Textile fabrics otherwise impregnated, coated or covered; painted canvas being theatrical scenery, studio back-cloths or the like." For the purposes of the EXIM Policy, it was found that for the import of flocked fabrics an import licence was required. The importers had not produced any import licence. It was also noted in the show cause notice dated 23-11-1996 that even for the import of artificial fur, an import licence was required and that it was only for the import of trimmings and embellishments for garments, made ups, knitwear, plastic and leather goods, that no licence was required. In the show cause notice dated 23-11-1996, differential duty of Rs. 92,179.54 was demanded. Penal provisions including those relating to confiscation were invoked. The value of the offending goods was determined as Rs. 11,93,805/-. Another show cause notice was issued on 5th December, 1996 wherein for the clearances effected under 12 Bill of Entries under Duty Exemption Entitlement Certificate (DEEC)....
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....ed by examination of the goods. The flocked fabrics were classifiable under Heading No. 59.07 of the Customs Tariff. The import of flocked fabrics required an import licence. The importers were a trader and not an actual user. The learned DR referred to the test reports as referred to in para 3 of the brief facts of the case at page 3 of the paper book. He submitted that the test reports clearly indicated that the goods in question were flocked fabrics classifiable under Heading No. 59.07 of the Customs Tariff. He also referred to Chapter Note 5 under Chapter 43 of the Tariff and pleaded that the goods in question were not artificial fur and that the order passed by the learned Commissioner of Customs was liable to be set aside. In reply, Shri R.K. Handoo, Advocate, submitted that the importers had been importing similar goods for a number of years and no dispute had been raised by the Customs. Fur could be of short length as was in the present case. He relied upon the reasonings adopted by the adjudicating authority. He pleaded that although there was no scope for any doubt in the present case, even if there was any doubt, then the benefit of doubt should go to the importers. ....
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....of Chapter 43 as under - "Throughout this schedule, the expression 'artificial fur' means any imitation of furskin consisting of wool, hair or other fibres gummed or sewn on to leather, woven fabric or other materials, but do not include imitation furskins obtained by weaving or knitting (generally, Heading no. 58.01 or 60.01)." Chapter Note 4 of Chapter 43 relates to articles of apparel and clothing accessories with which we are not concerned in the present proceedings. 6. For understanding 'Artificial Fur' as explained in Chapter Note 5 of Chapter 43, let us first understand what is the furskin. According to the scheme in the tariff, furskins could be raw furskins or the furskins that have been tanned or dressed with the hair or wool on. The expression 'Raw Furskins' includes heads, tails, paws and other pieces or cuttings, suitable for furriers' use. Both raw furskins and tanned/dressed furskins are a specie of hides or skins of animals. The tanned or dressed furskins are, however, those hides or skins of animals which have been tanned or dressed with the hair or wool on. In the Fairchild's Dictionary of Textiles, Sixth Edition, 'Fur' has been so defined at p....
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....over wires which are drawn out of the fabric as weaving progresses. Plain wires leave uncut loops, wire with a razor-like blade at one end cuts the loops, leaving a cut pile surface (plush). Pile fabric may be a double cloth structure woven face to face, with an extra set of yarn woven into both fabrics, interlacing with each cloth alternately as often as possible; the two fabrics are cut apart by a traversing knife which severs the pile yarns, producing two fabrics with a cut pile face (velvet). Pile should not be confused with nap. Examples of pile fabrics include: Carpets, imitation fur fabrics, panne velvet, plush, rugs, terry cloth, velour, velvet, velveteen q.q.v. Corduroys are another type of pile fabric where long floats on the surface, made by an extra weft, are slit causing the pile to stand erect." When fur is still attached to the skin, it will be known as furskin. 7. Furskin is a natural product. Artificial fur classifiable under Heading No. 43.04 of the Tariff has been distinguished from the natural furskins of the Heading No. 43.01 and Heading No. 43.02, as being an imitation of furskin. Chapter Note 5 of Chapter 43 which explains the 'Artificial Fur' has ....
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....d and discussed and before decision it could not be presumed that the goods imported were artificial fur. We find from the two show cause notices that the allegations levelled against the importers was that they had mis-declared the goods and that the goods imported were not artificial fur. Thus, this framing of the issue by the learned Commissioner of Customs does not flow from the allegations in the show cause notices. 11. We also note that in para 14 of the adjudication order while the allegation that the imported goods did not imitate the fur skin, has been taken up for consideration but the discussion has been limited only to the varieties of synthetic fur, methods of manufacture and chapter headings. It has been concluded that when imitated, artificial fur could be varied and of many varieties. No commercial consideration or trade understanding has been referred to and no finding has been recorded that the goods imported did imitate the furskin. Para 14 from the adjudication order is extracted below - "14. The Department has claimed that the imported goods do not imitate the fur skin. The literature available on the subject shows that there are hundreds of var....
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...." 12. The proposal to classify the goods under Heading No. 59.07 of the Customs Tariff had been negatived mainly on the ground that the imported goods did not have any of the characteristics of imitation pile fabrics. Reliance has been placed on the test results. However, in para 18 the jurisdiction of the testing authorities had been discussed in the following manner - "18. The Rules of interpretation require that the classification of a product should be determined according to terms of Headings. The specific description is to be preferred to the general description. It was argued during the personal hearing held on 14-5-1997 that the third opinion of experts of I.I.T., Delhi and SASMIRA, Bombay giving an opinion that the imported goods were flock fabrics, should be rejected. The grounds cited for such a view is that it is an opinion and not a test report. It has been pointed out that in the first two reports I.I.T., Delhi and SASMIRA, Bombay had tested the samples to be artificial fur and it is not their job to give any opinion on classification. However, on the request of the Department these Institutes submitted a third report and opined that the imported goods....
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....d canvas being theatrical scenery, studio back-cloths or the like); (c) Fabrics partially covered with flock, dust, powdered cork or the like and bearing designs resulting from these treatments; however, imitation pile fabrics remain classified in this heading; (d) Fabrics finished with normal dressings having a basis of amylaceous or similar substances; (e) Wood veneered on a backing of textile fabrics (Heading No. 44.08); (f) Natural or artificial abrasive powder or grain, on a backing of textile fabrics (Heading No. 68.05); (g) Agglomerated or reconstituted mica, on a backing of textile fabrics (Heading No. 68.14); or (h) Metal foil on a backing of textile fabrics (Section XV)." The 'Flock' has been so defined in the Fairchild's Dictionary of Textiles, Sixth Edition, at page 245 - "Flock 1. A very short wool, cotton, rayon fiber, etc., obtained either as waste or by grinding rags and clippings. The waste, small, tangled bunches of irregular fibers, is produced in fulling or shearing the surface of f....
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.... - not all fabrics. On the other hand, by virtue of para 5 of Appendix 17 read with item 31 of Appendix 2 Part-B, no other fabric is allowed to be imported. We shall, therefore, examine what is known as "artificial fur cloth". For that purpose, we may refer to some of the definitions of 'Fur', 'Fur-like Fabrics' and 'Fake Furs' etc. as given in Fairchild's Dictionary of Textiles (Sixth Edition) "fur" has been defined as follows : "Fur 1. The fine, soft, dense hair covering of certain mammals. It generally consists of a double coating of hair, a layer of comparatively short, soft, curly, barbed hairs, (underfur) protected by longer, smoother, stiffer hairs (guardhair) which grow through the underfur. Fur is distinguished from hair which is longer, thinner and coarser. Fur fiber is generally spun in combination with other fibers, e.g., wool, cotton, rayon staple fiber. It is usually very soft, protrudes from the yarn and sometimes tends to shed. 2. Sometimes used for chennile pile." The expression "Fur-like Fabrics" has been defined in the same Dictionary as follows : "Fur-like Fabrics A broad term of woven and knit modacrylic and acrylic fabrics made in imitation of....
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.... the aforesaid definition it will appear that ordinarily velveteen is finished fabric covered with short cut pile not more than 1/8" (0.32 cm) in length. If the surface is longer it will become "plush" which again has been defined as "a warp pile fabric with cut pile surface longer than velvet pile and less closely woven." Reference also may be made to Encyclopaedia of Textiles (3rd Edition) by Editors of American Fabric and Fashion Magazine. This Encyclopaedia defines "plush" as follows : "PLUSH : Woollen or worsted pile cloth, the pile being one-eight of an inch or more in height. Plush has many well-known uses and is a exaggerated form of velvet. The term is from the French peluche. This, in turn, is taken from the Latin, pilus, which means hair. The cloth is compact and bristly. Made in silk, cotton, mohair, and combinations of fibers, as well as in wool or worsted. Cotton plush has a deeper pile effect than velour or velvet. Used in caps, coats, muffs, powder puffs, and upholstery. Rayon plush simulates the cotton type and has the same uses". (emphasis supplied)." Thus "plush" has been defined as woollen or worsted pile cloth, the pile being one-eight of an inch in le....
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....ic imported by the petitioners which has also been seen by the learned Counsel for the petitioners. We have put the same on record. A look at the same also does not give an impression that it has anything to do with fur cloth or that it has any resemblance to fur cloth. It does not at all appear to be an imitation of fur cloth. 12. In that view of the matter, we are of the opinion that the fabric imported by the petitioners is not artificial fur cloth. 13. In view of the elaborate discussion made above in regard to the meaning of "artificial fur cloth" vis-a-vis the description of the goods in question imported by the petitioners, we do not think it necessary to discuss at length the various well-settled principles of the interpretation of items in the taxation statutes. A reference was made in the course of the arguments to the rule of common parlance interpretation or commercial parlance interpretation. Reliance was also placed on affidavit of a trader from Delhi which is annexed as Exhibit 'I' to the petition. This affidavit in our view does not in any way help the petitioners because it says that the artificial fur cloth is a commercial term and the same include....