AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 1039
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....ina', wherein it was stated that the goods had been manufactured in China and were classified under CTH 54034100. The goods appeared to attract levy of ADD in terms of Sl. No. 1 of Notification No. 23/2012-Cus dated 4.5.2022 at 5.04% Adv. In view of the foregoing, it appeared to the department that the imported goods which had been cleared under 13 BE's were liable for confiscation under the provisions of Sec. 111(m) of the Customs Act, 1962 for being cleared without payment of applicable ADD. After due process of law, the Ld. Adjudicating Authority demanded ADD of Rs.9,87,884/- and Rs.30,93,706/- under two separate orders, along with interest and imposed penalty of Rs.3,00,000/- and Rs.9,00,000/- respectively, under sec. 112 of the Customs Act, 1962. In appeal, the Commissioner (Appeals) upheld the same. Hence these appeals before this Tribunal. 3. Shri T. Viswanathan, Ld. Advocate appeared for the appellants and Smt. Anandalakshmi Ganeshram, Ld. Authorized Representative appeared for the respondent. 3.1 The Ld. Advocate submitted that since the issues in both the appeal are similar, he is making common submissions for which the details were submitted as under ; Compa....
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.....2 The Ld. AR stated that the Appellant has conceded that the goods are classifiable under CTH 540341 as stated in the Country-of-Origin certificate. She stated that the imported goods were nothing but "viscose filament yarn" of heading 5403 which is leviable to anti-dumping duty @ 5.04% under S1.No.1 of Notification No. 23/2012-Cus. The Ld. AR stated that para 25 of the OIO has summed up the reasons why the impugned goods are only 'yarn' i.e. 'viscose filament yarn' and not 'thread' or 'embroidered thread'. Reason being the goods are; a) not piled yarn b) not sized c) not on supports d) not numbered by various systems for size e) the heading 5403 covers only yarn and thread is excluded from its scope f) description 'thread' is loosely used and accordingly declared in import documents g) description thread when it is loosely used for yarn it obviously cannot be used for needle work (i.e. embroidery) The Appellant mis-declared and mis-classified the goods as thread with an intention to evade payment of appropriate anti-dumping duty. Thus, the importer is liable for penalty under Section 112. She prayed that the impugn....
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....hat the heading though dealing with 'Artificial filament yarn' does not specifically exclude threads other than sewing thread. Embroidery thread is not the same as sewing thread in trade parlance. It is perhaps for this reason that even the department has found the imported 'thread' classifiable under CTH 5403 since we find the description of the goods has not been challenged nor has any test or expert opinion been sought for. 7. As rightly stated by the appellant and also held by the Hon'ble Supreme Court in CC v. Dilip Kumar (supra), that when the issue pertains to imposing a levy, the onus is on the Department to prove that the goods are leviable to such duty. 8. The discussions in the OIO regarding the difference between 'thread' and 'yarn' are contained at para 17 to 23 of the OIO and are reproduced below "17. ......... To ascertain the goods imported are "thread" or "yarn" reference is drawn to Section note 4(A) and 5 to Section XI of Customs Tariff Act which are reproduced as below. "4.-(A) For the purposes of Chapters 50, 51, 52, 54 and 55, the expression "put up for retail sale" in relation to yarn means, subject to the exceptions in paragraph (B) b....
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.... "yarn". This view gets fortified by the HS code given in the country-of-origin certificate as 54034100 which covers yarn. The said classification of the imported goods under heading 540341 otherwise has been accepted by the importer in his written submissions. 20. Now coming to the issue of whether sewing thread and thread are one and the same or can be different, the said terms are defined in the Fairchild's Dictionary of Textiles as under. Sewing Thread: A variety of yarn, regardless of fiber, which is treated with solid or semi solid waxy materials to secure a smooth, compact strand which is quite flexible but which presents no loose fibers. The yarn is usually plied. A three-cord thread is one that is made from three yarns twisted together, six cord is made by twisting twisting six yarns together and so on. Sewing threads are numbered by various systems for size: In one system, number 40 is fairly coarse and would be suitable for sewing slip covers and drapery fabrics; number 60 is finer than 40 and would be used on percale or gingham. The higher the number, the finer the sewing thread. Thread: 1.Thin continuous cord, especially one made by combi....
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....k" On plain reading of aforesaid definition with the declared description in the import documents (including country of origin certificate) and contention of the importer that goods in question are classifiable under heading 540341 only, what emerges is that goods imported are only "yarn" used in weaving and knitting. Thus going by the declared description "thread" loosely applied to yarn in this case, which is used in weaving and knitting and not for needle work, the imported goods cannot be termed as "embroidery yarn" I repeat "embroidered yarn" which is excluded from anti-dumping duty." ( emphasis added ) Based on the discussion the Ld. Adjudicating Authority concluded as under; "26. From the above discussion and analysis based on Section Notes, and definitions given in internationally acclaimed and widely referred Fairchild's Dictionary of Textiles (which has also been referred to by the importer in their submissions made), I find that the goods are yarn or viscose filament yarn classifiable under heading 540341 and attracts anti-dumping duty levied under Sr. No. 1 of Notification No. 23/2012-Cus dated 4.5.2012." 9. We find that the issue involv....