Artex Textiles Pvt. Ltd. Vs Commissioner of Customs (Preventive) (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal Delhi partly allowed the appeal filed against an order upholding confiscation, redemption fine, penalty, and re-determination of customs duty relating to imported polyester knitted fabric. The appellant had imported goods described as “Polyester knitted fabric” weighing 16,178 kg under a Bill of Entry dated 17.12.2019. Upon examination by customs authorities acting on intelligence inputs, the goods were found to weigh 17,330 kg, approximately 7% more than declared. Samples tested by the Central Revenue Control Laboratory showed the goods to be “Knitted fabric-95.5% polyester and 4.5% spandex.”
The Director of the importing company agreed to rejection of the declared value and waived issuance of show cause notice and personal hearing. The Joint Commissioner rejected the declared assessable value under Rule 12 of the Customs Valuation Rules, re-determined the assessable value under Rule 5, confirmed customs duty demand of ₹5.74 lakh including differential duty of ₹68,402, confiscated the goods under Section 111(m) of the Customs Act, imposed redemption fine of ₹10,000, and levied penalty equal to the differential duty under Section 114A. The Commissioner (Appeals) upheld the order.
Before the Tribunal, the appellant argued that the description “Polyester knitted fabric” correctly covered the imported goods despite the presence of 4.5% spandex, as polyester remained the predominant material and there was no change in the applicable duty rate. It also submitted that the 7% variation in weight was minor and could result from differences in weighing scales. Regarding valuation, the appellant contended that the enhancement based on National Import Database data was unsupported by proper comparison of similar goods under Rule 5.
