'Twaron Para Aramid Pulp' Classified As 'Textile Flock', Importers Liable For Higher Customs Duty: CESTAT

Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the Twaron Para Aramid Pulp imported by the assessee was classified under Customs Tariff Item (CTI) 5601 22 00 or under CTI 5601 30 00.

The case was whether the imported goods (Twaron Para Aramid Pulp) are 'Wadding of textile materials of man-made fibres' as claimed by the assessee or 'Textile flock and dust and mill neps' as claimed by the revenue.

In this case, the assessee/appellant imported Twaron Para Aramid Pulp under several Bills of Entry. It self-assessed the goods, classifying them under CTI 5601 22 00.

The officers of the Commissioner of Customs (Preventive), New Delhi, found yellowish cotton-like material in the imported goods and detained them under section 110 of the Customs Act, 1962.

The assessee paid the differential customs duty and also deposited the reduced penalty.

A show cause notice was issued to the assessee, and the demand was confirmed by the Additional Commissioner.

The assessee filed an appeal before the Commissioner (Appeals), which upheld the order of the Additional Commissioner.

As per the assessee, since Twaron para-aramid pulp is functionally distinct from textile flock, it cannot be classified under that category. It cannot be classified under CTI 5601 30 00 merely because the fibres are under 5 mm in length. It is primarily a pulp as distinct from a textile flock.

The revenue submitted that the assessee classified the goods under CTI 5601 22 00 (as wadding of man-made fibres), but it deserves to be classified under CTI 5601 30 00 (textile flock and dust and mill neps) based on the fibre length and physical characteristics.

The revenue further added that the goods were not in sheets or rolls nor in layers or compressed form, which would characterise goods under CTI 5601 30 00. Therefore, the disputed goods were correctly classifiable under 5601 30 00.

The Tribunal observed that the imported goods were, as per the description in the literature of the manufacturer, fibrillated fibres intended to manufacture gaskets. They were not described as textile wadding.

The CTI 5601 22 00 claimed by the assessee is a subset of single dash (-) under CTH 5601, which reads as 'Wadding of textile materials and articles thereof'. Nothing in the literature of the product produced by the assessee shows that the imported goods are 'wadding'; it was sold as 'pulp', and the intended use was also not of wadding but of the textile pulp, noted the bench.

The Tribunal noted that CTI 5601 30 00 under which the goods were classified by the revenue, is 'textile flock and dust and mill neps'. Textile flock, according to the HSN explanatory notes, are textile fibres not exceeding 5 mm in length.

The 'Test Report' from the supplier submitted by the assessee described that the length of the material is less than 5 mm. Therefore, the goods squarely fall under CTI 5601 30 00 and not under CTI 5601 22 00. Consequently, the differential duty with applicable interest is payable, opined the bench.

The bench found no ground to invoke an extended period of limitation.

In view of the above, the Tribunal upheld the classification of the Twaron Para Aramid Pulp under CTI 5601 30 00 and set aside the demand of duty for an extended period of limitation and the penalties under section 114A.

Case Title: M/s Leakless Gasket India Pvt. Ltd. v. Commissioner of Customs

Case Number: CUSTOMS APPEAL NO. 55311 OF 2023

Counsel for Appellant/ Assessee: Dr. Prabhat Kumar and Shri Pralabh Mathur

Counsel for Respondent/ Department: Shri Mukesh Kumar Shukla

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