TaxTMI 
TaxTMI 
2026 (3) TMI 47
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion Rules] and re-determined it under Valuation Rule 9. of the Valuation Rules. Further, he held that the appellant was liable to pay Anti-dumping duty on the imported goods as per Anti-Dumping Notification no 14/2022-Customs (ADD) dated 20th May 2022. Accordingly, he confirmed demand of duty from the appellant with interest and imposed a penalty under section 114A of the Customs Act, 1962 [Act] 2. Aggrieved, the appellant filed this appeal with a prayer to set aside the impugned order. 3. We have heard learned counsel for the appellant and learned authorized representative for the Revenue and perused the records. The issues which call for consideration in this appeal are as follows: (i) Classification of the imported goods under CTI 5903 20 90 instead of CTI 5903 90 90 and CTI 6006 32 00. (ii) Holding that the appellant was liable to pay anti-dumping duty on the imported goods; (iii) Rejection of the transaction value under Rule 12 of the Valuation Rules and its re-determination under Rule 9 of the Valuation Rules. (iv) Imposition of penalty of Rs. under section 114A of the Act. Classification of the goods 4. The appellant described ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....PU) film Balance., GSM (as such) = 229.5, Average thickness (as such): 1.15mm. 4 Polyester Plain Dyed Fabric Laminated with TPU width 58" The sample is in the form of a cut piece of dyed (pink) fabric having smooth surface on both sides and laminated on one side transparent film. The base woven fabric is composed of filament yarn of nylon (Polyamide) coated /laminated with polyurethane based polymeric material. Coating is visible with naked eyes. % composition: (by wt.): Nylon = 80.7% transparent polyurethane film balance, average thickness = 0.09mm GSM (as such) = 47.90 5 9611806 Dated 18.07.2022 Polyester Knitted fabric The sample as received is in the form of cut piece of dyed self designed knitted fabric. It is composed of polyester filament yarns twisted with polyester spun yarns along with spandex yarn together with metalized polyester yarns twisted with polyester filament yarns.% composition (by wt.) Polyester filament yarns =56.49%, polyester spun yarns 2.78%, spandex yarns=2.78%, Metalized polyester yarns =balance, GSM (as such): 280.86, Average thickness (as such ): 0.97mm. 6. Polyester Knitted Bonded Fabric The sample is in the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with polyurethane (PU) polymeric material on the other side. Coasting is visible with name eyes. %Composition by wt.):- Black polyester fabric =27.80%, Black TPU Film=7.91%, off white polyester fabric=38.60%, Black PU material= balance, GSM (as such)=201.80, Average thickness (as such ) =0.33mm. 5. The relevant portion of the Customs Tariff is as follows: 5903 TEXTILE FABRICS, IMPREGNATED, COATED, COVERED OR LAMINATED WITH PLASTICS, OTHER THAN THOSE OF HEADING 5902 5903 10 - With polyvinyl chloride : 5903 10 10 --- Imitation leather fabrics of cotton 5903 10 90 --- Other 5903 20 - With polyurethane : 5903 20 10 --- Imitation leather fabrics, of cotton 5903 20 90 --- Other 5903 90 - Other : 5903 90 10 --- Of cotton 5903 90 20 --- Polyethylene laminated jute fabrics 5903 90 90 --- Other" 6. As can be seen, textile fabrics which have been impregnated, coated, covered or laminated with plastics fall under the four-digit Customs heading 5903. Under this heading, there are three six-digit Customs sub-headings proceeded by a single dash '-' based on the material with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... measurement as specified in the corresponding entry in column (8), of the said Table - S. No. Heading subheading or tariff Description of goods Country of origin County of export Producer Amt. Unit of measurement Currency (1) (2) (3) (4) (5) (6) (7) (8) (9) 1. 650394 90 59032090 Polyurethane leather which includes any kind of textile coated one sides or both sided with polyurethane China PR Any country including China PR Ahui Anil Material Technology Co. Ltd. NIL Meters USD 2. -do- -do- China PR Any country including China PR Any Producer other than S.N. 1 0.46 Meters USD 3 -do- -do- Any country including China PR China PR Any 0.46 Meters USD 10. It must be noted that while CTH 5903 includes Textile fabrics, impregnated, coated, covered or laminated with plastics, the Antidumping duty has been imposed only on PU Coated fabrics. As per the test reports of the CRCL, the imported goods were coated/laminated with PU. Since this expression was not clear, a clarification was sought by the department and CRCL confirmed that the goods were laminated. Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ciation Bombay v Devkala Consultancy Service AIR 2004 SC 2615, p 2624; Commr of Central Excise Pondicherry v ACER India Ltd (2004)8 SCC 173; Consumer online Foundation v UOI (2011) 5 SCC 360 (para 26)] More recently, a five-member constitutional bench of the Supreme Court has in Commissioner of Cus. (Import), Mumbai versus Dilip Kumar [2018 (361) E.L.T. 577 (S.C.)] upheld the same position with respect to the charging section of the taxing statute. The relevant portion of this judgment is reproduced below: 42. In Govind Saran Ganga Saran v. Commissioner of Sales Tax, 1985 Supp (SCC) 205, this Court pointed out three components of a taxing statute, namely subject of the tax; person liable to pay tax; and the rate at which the tax is to be levied. If there is any ambiguity in understanding any of the components, no tax can be levied till the ambiguity or defect is removed by the legislature [See Mathuram Agrawal v. State of Madhya Pradesh,(1999) 8 SCC 667; Indian Banks' Association v. Devkala Consultancy Service, (2004) 4 JT 587 = AIR 2004 SC 2615; and Consumer Online Foundation v. Union of India, (2011) 5 SCC 360.]. 43. There is abundant jurisprudential justificati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dumping duty in the impugned order, therefore, deserves to be set aside as there is no charge of this duty on fabrics laminated with PU. Rejection of transaction value under Valuation Rule 12 and its re-determination under Valuation Rule 9 15. Before examining the facts of this case, we examine the relevant legal provisions, viz., Section 14 of the Customs Act, 1962 [Act] and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [Rules] Duties of customs are levied on goods imported into and exported from India at the rates specified in the Schedules to the Customs Tariff Act, 1975. On some goods, the levy is based on quantity (specific duty), and other goods it is based on value (ad valorem). If the duty is to be levied based on value, valuation for the purpose has to be done as per Section 14 which reads as follows: "Section 14. Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for expor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foreign currency or foreign currency into Indian currency; (b)"foreign currency" and ''Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)." 16. The non-obstante clause in sub-section 2 of section 14 gives the Board the power to fix tariff values for any class of goods and if fixed, the tariff value will be the value to determine the duty. This sub-section is not relevant to this case. In all other cases, the value to be reckoned for calculating the Customs duty shall be the transaction value subject to five conditions: a) Buyer and seller are not related. b) Price is for delivery at the time and place of importation, i.e., all costs up to the point of import are to be included. For instance, if the sale is on Free on Board basis, the costs of transportation to the place of import, transit insurance, etc. will have to be added. c) Price is the sole consideration for sale. d) Some amounts indicated in the first proviso to sub-section 1 of section 14 must be included. e) Valuation will be as per any other con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ased on transaction value as per Rule 3 with some additions, if necessary, as per Rule 10. 20. Rule 3 further provides that if the valuation cannot be done under that Rule, i.e., as per the transaction value with additions as per Rule 10, then it must be done sequentially under Rules 4 to 9. In other words, if the transaction value is rejected under Rule 12 and valuation cannot be done as per the transaction value under Rule 3 and it must be done sequentially under Rules 4 to 9. 21. We now proceed to examine Rules 4 to 9. Rule 4 provides for the valuation to be done on the basis of identical goods. Rule 5 provides for the valuation to be done on the basis of the value of similar goods. Rule 6 states if Rules 4 and 5 cannot determine the value then they must be done as per Rule 7 and thereafter Rule 8 but this sequence can be reversed at the option of the importer. In other words, if the importer so chooses, Rule 8 can be applied directly instead of Rule 7. Rule 7 provides for a deductive method of valuation on the basis of prices of similar or identical goods sold in India and after making some deductions from such prices. Rule 8 provides for a computed value, i.e., based on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; wher....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... value under CVR 2007, in view of the variation in description, thickness and coating of the impugned goods. Further, the importer had also failed to furnish supporting documents such as manufacturer's invoice to justify the transaction value of subject goods declared by them. Hence the allegation of the investigation team that imported goods were under valued by the importer seems appropriate." 26. The reason given for rejection of transaction value is that the specifications of the fabrics were different. A plain reading of the description of the goods in the Bills of Entry and the Reports of the CRCL about the nature of the goods recorded in Table C of the impugned order which we have reproduced in par 4 above would show that the Bills of Entry gave a general description of the goods and did not give any specifications. After testing, CRCL gave detailed specifications. Thus, there was no mis-match of specifications as held in the impugned order. If the assessing officer thought it necessary, he could have asked the appellant for more detailed specifications at the time of assessment. We do not find any discrepancy in the specifications. The impugned order also does not indica....