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2026 Supreme(Online)(CESTAT) 2731
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, EASTERN ZONAL BENCH: KOLKATA
Ashok Jindal, Member, K. Anpazhakan, Member
M|S. TOPSIA ESTATES PVT. LTD. – Appellant
Versus
KOLKATA-PORT – Respondent
Customs Appeal No. 75889 of 2023
For the Appellants/Petitioners: Ashutosh Nath
For the Respondents: A. K. Chowdhury
Exemption benefits cannot be denied based on arbitrary findings or misinterpretations of voluntary statements without supporting evidence, such as a test report, to justify the reclassification of goods.
Headnote:The case involves the denial of exemption benefits under Notification No. 82/2017-Customs for goods declared as "Chinlon Knitted Bonded Fabrics" and "Bonded Fabrics (Eva Lycra)" classified under CTH 60069000 of the Custom Tariff Act, 1975. The Revenue alleged that the goods were synthetic fibers and should be reclassified under CTH 60063100, 60063200, 60063300, or 60063400, leading to a demand for differential duty. The adjudicating authority denied the exemption based on a finding that the importer had admitted the fabrics were "bleached and dyed." The primary issue is whether the reclassification and denial of exemption were sustainable in the absence of a test report and based on a misinterpretation of the importer's voluntary statement. The court reasoned that the recorded statement only admitted the fabrics were "synthetic in nature" and contained no mention of them being "bleached and dyed," characterizing the lower authority's finding as a "fiction." In the result, the appeal is allowed with consequential relief, if any.
The appellant is in appeal against the impugned order wherein differential duty has been demanded from the appellant by denying the benefit of exemption provided under Notification No. 82/2017-Customs dated 27th October, 2017.
The facts of the case are that the appellant filed six bills of entry for home consumption for clearance of goods declared as “Chinlon Knitted Bonded Fabrics” and “Bonded Fabrics in bracket (Eva Lycra)” originating from China, classifying under CTH 60069000 of the Custom Tariff Act, 1975 claiming the benefit of concessional rate of duty in terms of Notification No. 82/2017-Customs dated 27th October, 2017 [Serial Number 169]. The goods were cleared on payment of duty.
Later on, it came to the notice of the Revenue that the classification claimed by the appellant for the impugned goods did not appear to be proper and therefore, the concessional rate of duty availed by the appellant for the impugned goods in terms of Serial Number 169 of Notification No. 82/2017-Customs dated 27th October, 2017 did not appear to be applicable to impugned items for the reason that the importer had declared the items covered under the said six Bills of Entry as “Chinlon Knitted Bonded Fabrics” and “Bonded Fabrics in bracket (Eva Lycra)” classifying the same under CTH 60069000 of the First Schedule to the Custom Tariff Act, 1975 , which was alleged to be false; that Chapter 60 of the HSN covers ‘knitted and crocheted fabrics’; that in the HSN, knitted or crocheted fabrics under the said Chapter 60 of the Custom Tariff Act, 1975 are further classified into six main classes of goods vide six four digit headings, reproduced as under: -
“6001 PILE FABRICS, INCLUDING "LONG PILE" FABRICS AND TERRY FABRICS, KNITTED OR CROCHETED
6002 KNITTED OR CROCHETED FABRICS OF A WIDTH NOT EXCEEDING 30 CM, CONTAINING BY WEIGHT 5% OR MORE OF ELASTOERIC YARN OR RUBBER THREAD, OTHER THAN HOSE OF HEADING 6001
6003 KNITTED OR CROCHETED FABRICS OF A WIDTH NOT EXCEEDING 30 CM, OTHER THAN THOSE OF HEADING 6001 or 6002
6004 KNITTED OR CROCHETED FABRICS OF A WIDTH EXCEEDING 30 CM, CONTAINING BY WEIGHT 5% OR MORE OF ELASTOERIC YARN OR RUBBER THREAD, OTHER THAN HOSE OF HEADING 6001
6005 WARP KNITTED FABRICS (INCLUDING THOSE MADE ON GALLOON KNITTING MACHINES), OTHER THAN THOSE OF HEADING 6001 ΤΟ 6004
6006 OTHER KNITTED OR CROCHETED FABRICS”
In the instant case, the appellant has claimed classification under CTH 60069000, which falls under four digit heading viz. 6006. The said four digit heading as in the HSN is reproduced hereunder: -
The HSN code under four digit Chapter Heading 6006 contains single dash (-) and double dash (--). A single dash (-) at the beginning of a description denotes an article that belongs to a group covered under a heading. A double dash (--) indicates that the article is a sub-classification of the preceding article that has a single dash (-). Accordingly, the said 4-digit heading 6006contains the following five (5) groups of articles that are denoted by a single dash (-)
Therefore, all kinds of knitted or crocheted fabrics are classified under four dashed digit headings i.e., 6001, 6002,6003, 6004 or 6005of Chapter 60 of the HSN. Also, knitted and crocheted fabrics which are not covered under the four dashed digit headings of 6001, 6002, 6003, 6004 or 6005 are classified under four dashed digit heading of 6006, which is for other knitted or crocheted fabrics. The said 4-digit Heading ’6006’ is further divided into five (05) main classes of goods based on material of the article denoted by a single hash (-)in the HSN. Thus, was alleged that a Knitted or Crocheted fabric’ if not coverable under the first five 4-digit Headings of Chapter 60 of the HSN viz ’6001’, ’6002’, 6003’, ’6004’ and 6005’, the same is classifiable under the 4-digit Heading ’6006’ of the HSN. And, if a "Knitted or Crocheted fabric is appropriately classifiable under the 4-digit Heading 6006, the 8-digit Tariff Item No. shall be
