2002(03)LCX0050

IN THE CEGAT, COURT NO. IV, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and Krishna Kumar, Member (J)

FLOOR & FURNISHING INDIA (P) LTD.

Versus

COMMISSIONER OF CUS., NEW DELHI

Final Order No. 64/2002-D, dated 13-3-2002 in Appeal No. E/254/2001-D

Cases Quoted

Gujarat State Export Corporation Ltd. v. U.O.I. — 1983(12)LCX0010 Eq 1984 (017) ELT 0050 (Bom.) — Referred [Para 2]

Northern Plastic Ltd. v. Collector — 1998(07)LCX0097 Eq 1998 (101) ELT 0549 (S.C.) — Referred...................... [Para 2]

Philips India Ltd. v. Commissioner — 2000(11)LCX0013 Eq 2001 (132) ELT 0783 (Tribunal) — Referred........... [Para 3]

Advocated By :   Shri K.K. Anand, Advocate, for the Appellant.

Ms. Ananya Ray, SDR, for the Respondent.

[Order per : V.K. Agrawal, Member (T)]. - In this appeal, filed by M/s. Floor & Furnishing India (P) Ltd., the issue involved is whether the goods imported by them are “artificial turf” classifiable under sub-heading 9506.99 of the first schedule to the Customs Tariff Act as claimed by them or under sub-heading 5703.30 of the tariff as floor covering.

2. Shri K.K. Anand, learned Advocate, submitted that the Appellants had imported artificial turf meant for use for out door sports and games like hockey, golf, tennis, play areas swimming pools, locker rooms, boat docks, wet areas etc.; that the impugned goods cannot be classified under sub-heading 5703.30 which covers carpets and other textile floor coverings in which textile material serve as the exposed surface when in use and including article having the characteristics of textile floor coverings and the same are meant to be used as household goods alone; that the impugned goods are artificial turfs which are used as a flooring as a substitute to grass for games like tennis, hockey, golf surface, etc.; that as per Note 1 to Chapter 57 of the Tariff Heading 57.03 applies only to “floor covering” which may be used for any other purposes but the same should have the characteristics of textile floor coverings; that the imported goods do not have a thread of textile exposed to the surface and as such cannot fall under Heading 57.03; that there is absolutely no evidence on record to show that the goods in question are carpets and other textile floor coverings and had the characteristics of textile floor coverings. He, further, submitted that it is a settled law that onus to prove classification of the goods in a particular heading is always on the Revenue; that as Revenue has not brought any evidence on record, the goods should be classified under sub-heading 9506.99; that in the case of Sidhartha International, it was decided by the Revenue that Astro Turf was classifiable under Heading 9506.99; that there was no mis-declaration on their part as they were only claiming a particular classification that too based on an earlier order of their sister concern; that the Apex Court has held in a number of cases that claiming a particular classification under a particular heading does not amount to mis-declaration. Reliance was placed on the decision in the case of Northern Plastic Ltd. v. CCE - 1998(07)LCX0097 Eq 1998 (101) ELT 0549 (S.C.) and Gujarat State Export Corporation Ltd. v. Union of India - 1983(12)LCX0010 Eq 1984 (017) ELT 0050 (Bom.). The ld. Advocate mentioned that the Bombay High Court held that if imports were made according to the long-standing practice, the goods cannot be confiscated.

3. Countering the arguments Ms. Ananya Ray, learned SDR, submitted that the classification of a products depends on facts about the goods imported and as such the earlier import made buy Sidhartha International is not relevant at all, that moreover the issue involved therein was ITC Policy that is whether the import of Astro Turf was restricted one and issue of classification under Customs Tariff was not raised therein. In this regard, she referred to the decision in Philips India Ltd. v. Commissioner of Customs (ACC), Mumbai, 2000(11)LCX0013 Eq 2001 (132) ELT 0783 (T), wherein it was held that classification “decided by the Licensing Authority cannot govern classification under the Customs Tariff for the purpose of assessment of duty. Such classification is to be governed solely by the classification in the Customs Tariff.” The learned SDR, further, submitted that the classification of the product in question was determined after examining the same, that manufacturer’s catalogue was not made available and according to the Appellants themselves the impugned goods were not for any specific game; that the Adjudicating Authority found the goods to be nothing but tufted carpet/floor covering made of man made textile material and having all the characteristics of carpets/floor covering. She also mentioned that nowhere in Chapter 57 or in the HSN Explanatory Notes it is indicated that the Heading 57.03 covers only such articles as are meant for household use and the goods intended for “other than household” use are excluded therefrom; that moreover Note 1(f) to Chapter 95 even excludes sails of boats from the purview of Chapter 95; that even the business name of the Appellants indicate that they deal in floor and furnishing which is beyond common comprehension that they will be dealing with Astro turf required for sports. Finally, she submitted that there was misdeclaration on the part of the appellant which is evident from their conduct; that when they were asked to submit documents to justify classification, including catalogue, etc., there was no response from them; that they had not produced even copy of Proforma invoice, certificate of manufacture, original bill of lading; that there were over writing in Bill of lading presented by the appellants. In reply the learned Advocate mentioned that catalogue has not much meaning in determining the classification of the goods; that in case of doubt the Department can get the goods examined before finalizing the classification, that they are not responsible for over writings in Bill of lading as it is not their document and as such there was no misdeclaration on their part.

4. We have considered the submissions of both the sides. The rival Headings under Customs Tariff Act read as under :

5. As per Explanatory Notes of HSN, Chapter 95 also includes equipment for indoor or outdoor games, appliances and apparatus for sports, gymnastic or athletic. The appellant except claiming the impugned product to be “Astro turf” for sports has not adduced any material on record to show that the impugned goods are meant for any sports. We observe that the Adjudicating Authority has given the following findings in the Adjudication Order :

“I have seen the sample. A perusal of samples, however, indicate that goods are nothing but tufted carpet/floor coverings covered under Custom Tariff Heading 57.03 as described in HSN explanatory notes i.e. these have textile yarn/strip inserted into a pre-existing backing, thus producing loops. The yarn/strips forming the pile are fixed with some coating of rubber/plastic or other adhesive and are covered by a secondary baking of loosely woven textile material of manmade fibers. The goods have the characteristic stiffness, thickness and strength rendering them suitable for use as floor coverings. The importer has not pointed out any distinctive characteristics, which take the goods out of the category of floor coverings and render them to be described as artificial turf. No specifications of the goods have been mentioned nor any catalogue has been submitted, even though the importer was categorically asked to do so before the hearing as also during the hearing. The importer had in fact himself sought time for submitting their reply on the ground that they were asking their supplier to furnish details of composition and manufacturing process of the goods. Even the Proforma invoice dated 8-9-2000 as mentioned on the commercial invoice has not been submitted. Copy of the Bill of Lading submitted indicated overwriting/ correction in the description of the goods. Hence, importer was asked to submit original Bill of Lading but the same has not been submitted. No explanation as to what is the difference between the two types of goods priced at US $ 2.37 and 2.85 per sq. yard respectively has been submitted. No correspondence with the supplier indicating as to what they were looking for and what they have ordered has been submitted. No explanation regarding the end use of the goods has been submitted. The goods are stated to be for Tennis, hockey and other games. No purchase order, trade enquiry from intended customers has been submitted. It is difficult to comprehend that goods if intended to be used for a specific technical use such as surface for a particular sport would be ordered for random quantities, at random prices without reference to any specifications.”

6. We find that no material has been brought on record to controvert the above findings. Neither the Appellants have furnished the catalogue of the foreign supplier to indicate that the impugned goods is to be used for any sport nor any technical evidence to show that the impugned goods is not carpet/floorings. No doubt the onus is on the Revenue to determine the classification of any product, but the appellants can also not claim a particular classification in vacuum. They must have some basis for declaring a particular heading in which the imported product falls. No such basis, in our view, has been disclosed by the Appellants except mentioning that the Astro turf imported by Sidhartha International was classified under 9506.99. The learned SDR has rightly pointed out that the question of classification did not arise in the said matter and the Commissioner (Appeals) only decided the issue as to whether the import was allowed under OGL or it was restricted one requiring import licence. Further as observed by the Adjudicating Authority goods to Sidhartha International were supplied by a different supplier abroad and neither the catalogue nor sample of those goods were produced, in absence of which it cannot be said that the goods imported by them were same which are impugned in the present matter. We also observe that Commissioner (Appeals) has, in the impugned order, given his findings that as per the composition sheet produced by the Appellants, the fiber used is 100% UV Olefin; primary and secondary backing is of woven polypropylene. Commissioner (Appeals) has referred to “The World Book Multimedia Encyclopedia”, according to which Olefin floor coverings are widely used because they are strong and they resist moisture. The Appellants have not produced any material in support of their claim that the imported goods did not have a thread of textile exposed to the surface. Accordingly, we do not find any reason to interfere with the impugned order as far as classification of the product is concerned. We also agree with the Revenue that there was a mis-declaration in claiming classification under Heading 95.06 inasmuch as there was no material with the Appellant to declare the same heading. However, we find that the redemption fine and penalty imposed are on the higher side in absence of any material to show the margin of profit etc. We, therefore, reduce the redemption fine to Rupees One lakh and Penalty to Rupees Fifty thousands only.

The Appeal is disposed of in above terms.

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Equivalent 2002 (143) ELT 311 (Tri. - Del.)

Equivalent 2002 (050) RLT 0032