TaxTMI 
TaxTMI 
2026 (8) TMI 657
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.... samples were drawn. The Department formed an opinion that the goods were actually folded polyester fabrics capable of being converted into bed sheets by removing the stitches. On this presumption: * declared value was rejected under Rule 12 of the Customs Valuation Rules, 2007; * assessable value was enhanced to USD 2.85 per piece; * goods were confiscated under Section 111(m); * redemption fine and penalty were imposed. 1.3. Owing to heavy demurrage and detention charges, the appellant waived issuance of Show Cause Notice and personal hearing and paid the enhanced duty, redemption fine and penalty under protest for obtaining release of the goods. 1.4. On appeal, the Ld. Commissioner (Appeals) affirmed the Orders-in-Original, against which the present appeal has been preferred. 2. The Appellant submits that the goods imported must be assessed in the condition in which they are presented. In the present case, the entire case of the Department proceeds on a hypothetical assumption that by removing the stitches the goods may become bed sheets. The Appellant submits that the Customs law recognizes classification on the basis of the goods as....
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.... appellant submits that they have accepted the enhancement only because heavy demurrage was accumulating. Thus, they have accepted the enhancement and later filed appeal against the illegal assessment. 2.6. Regarding Confiscation of the goods and penalty imposed in the impugned order, the Appellant submits that once undervaluation is not proved, there is no foundation for Section 111(m), Section 112(a) and for imposing redemption fine. Mere enhancement of value cannot automatically establish misdeclaration. Thus, the Appellant submits that the Redemption fine imposed in this case is contrary to Section 125 of the Customs Act, 1962. Section 125 requires determination of market price before fixation of redemption fine. In this case, No market enquiry has been conducted. Therefore, redemption fine imposed is legally not sustainable. 2.7. In view of the above submissions, the Appellant prayed for setting aside the demands of customs duty along with interest, penalty and redemption fine confirmed in the impugned order. 3. The Ld. A.R. reiterated the findings in the impugned order. The Ld. A.R. submits that the Appellant has accepted the enhancement of value and hence they have ....
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....on in which they are presented. In the present case, we find that the examination revealed that the imported articles were folded and stitched and were presented as 'quilt covers'. We find that the entire case of the Department proceeds on a hypothetical assumption that by removing the stitches the goods may become bed sheets. In this regard, we observe that the Customs law recognizes classification on the basis of the goods as imported, not on the basis of what they may become after further processing. We also find that the Department misread Note 7 to Section XI, which speaks of goods produced in finished condition requiring only separation by cutting dividing threads. In the present case, the Department has wrongly equated de-stitching with cutting dividing threads. The imported articles were already stitched articles ready for use and therefore answered the statutory definition of "made-up articles". We also find that The Textile Committee, the designated expert body, had already opined in an identical matter that similar goods are Polyester Woven Printed Quilt Covers classifiable under the Heading 6302. We find that the adjudicating authority has ignored this expert evidence c....
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....appeal is allowed with consequential relief, if any. 7.2. In support of our view, we also rely on the following decisions: (i). CCE v. Terrytex, 2000 (122) ELT 201 (Tri.), wherein it has been held that goods are classifiable according to their condition at the time of clearance. (ii). Non-Woven (India) Pvt. Ltd. v. CCE, 1999 (107) ELT 648 (Tri.), wherein it has been held that Made-up textile articles cannot be treated merely as fabrics because further processing is possible. 7.3. Thus, by relying on the ratio of the decisions cited sura, we hold that the goods imported by the Appellant are Polyester Woven Printed Quilt Covers, appropriately classifiable under the CTH 6302. 2. Whether valuation can be enhanced solely on the basis of contemporaneous imports without satisfying the mandatory requirements of the Customs Valuation Rules? 8. Regarding valuation of the goods imported, we find that the department has re-determined the value on the basis of contemporaneous imports. But, we find that the said contemporaneous goods cited by the Revenue are not legally comparable. The Department merely relied upon imports of "bed sheets" and no comparison has been ....