PGC Corporation Limited Vs Commissioner of Customs (CESTAT Chennai)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Chennai has ruled in favor of PGC Corporation Limited in a case involving alleged misdeclaration of fabric composition on reimported goods. The Tribunal determined that despite an incorrect label, the actual fabric composition remained unchanged, and the voluntary return of duty drawback negated any intent to misdeclare.
The dispute arose when PGC Corporation Limited reimported certain goods that had previously been exported. The company had claimed duty drawback on these exported items. Upon reimportation, Revenue authorities subjected the goods to testing by the Textile Committee, Chennai. The test reports confirmed that the fabric’s actual composition largely matched its original state. However, the labels affixed to the goods, as per the requirements of the foreign importer, declared a different fabric composition. This discrepancy led the Revenue to allege misdeclaration, initiating a Show Cause Notice (SCN) dated July 31, 2012, and demanding duty, interest, and penalty.
PGC Corporation Limited contended that while the labels displayed a different composition, the actual fabric composition remained unaltered. They explained that the label discrepancies were a result of internal miscommunication and misunderstandings, catering to the specific requirements of their foreign importer. The company further highlighted that for several shipping bills, there was no mismatch between the fabric composition and its declaration.
