Woven Jackets Can’t Be Classified as ‘Knitted’ to Avail Lower Customs Duty: CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that women’s jackets made of woven fabric cannot be classified as “knitted jackets” under Chapter 61 of the Customs Tariff. The bench of Justice Mr. Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has set aside the extended period demand and penalty, holding that mere misclassification during self-assessment does not automatically amount to suppression or willful misstatement. The appellant/assessee, M/s Chogori India Retail Ltd. filed an appeal against an Order-in-Original dated 07 March 2023 passed by the Commissioner of Customs, ICD Patparganj. The order arose from three show cause notices issued in 2021 following an investigation by Customs (Preventive), New Delhi. The dispute originated when Customs authorities, acting on intelligence, examined imported garments declared as “women’s knitted jackets” under Customs Tariff Item (CTI) 6102 30 10. Upon physical examination, the garments were found to be made of woven fabric, not knitted fabric. The importer’s authorised representative, during investigation, agreed that the jackets were woven and would fall under CTI 6202 93 90. Two issues were examined by the Commissioner: classification of the imported jackets and inclusion of advertisement and promotion expenses in assessable value. The Department had alleged that the appellant incurred substantial brand promotion expenses under a distribution agreement with Columbia Brands, USA, and failed to include them in the assessable value. However, the Commissioner dropped the major demand of ₹1.16 crore relating to advertisement and promotion expenses, holding that such expenses were not a condition of sale. Since the Revenue did not challenge this finding, the issue attained finality. The only surviving issue before CESTAT was classification and the consequent differential duty of ₹4,04,306. The Tribunal examined the competing tariff entries namely Chapter 61: Covers apparel that is knitted or crocheted and Chapter 62: Covers apparel that is not knitted or crocheted The appellant argued that CTI 6102 30 10 was a specific entry and therefore should prevail. It also contended that there was no motive to evade duty. However, the Bench comprising Justice Dilip Gupta (President) and Member (Technical) P.V. Subba Rao held that the fundamental issue was factual: whether the garments were knitted or woven. The Tribunal observed that the goods were declared as knitted jackets. Physical examination established they were woven. The importer’s representative accepted this fact. No request was made for laboratory testing. Since Chapter 61 applies only to knitted or crocheted garments, woven jackets necessarily fall under Chapter 62. Accordingly, classification under CTI 6202 93 90 was upheld. While upholding the reclassification and differential duty demand, the Tribunal took a different view on invocation of the extended period under Section 28(4) of the Customs Act, 1962, and imposition of penalty under Section 114A. The Bench held that self-assessment errors can occur. Re-assessment by Customs does not automatically imply intent to evade. There was no evidence of fraud, collusion, or willful misstatement. The Tribunal observed that the elements required for invoking the extended period and mandatory penalty were absent. The tribunal upheld the demand within the normal limitation period; set aside duty demand beyond the normal period; and quashed the penalty imposed under Section 114A. The Tribunal confirmed classification under Chapter 62. Sustained the differential duty within the normal period. Set aside extended period demand. Quashed the penalty. Case Details Case Title: M/s Chogori India Retail Ltd. Versus Commissioner of Customs Citation: JURISHOUR-64-CESTAT-2026(Del) Case No.: CUSTOMS APPEAL NO. 55126 OF 2023 Date: 23.02.2026 Counsel For Appellant: Madhumita Singh Counsel For Respondent: Girijesh Kumar Click Here To Read Order Read More: Extended Limitation Period, Confiscation Can’t Be Invoked for Mere Misclassification Without Intent to Duty Evasion: CESTAT

Woven Jackets Can’t Be Classified as ‘Knitted’ to Avail Lower Customs Duty: CESTAT

Membership Required

Latest articles

CBIC Releases FAQs on Duty Deferment Scheme for Eligible Manufacturer Importers to Boost ‘Make in India’

GST Payable on Corpus Fund at Time of Collection; Electricity Charges for Common Areas Taxable as Part of Maintenance Services: AAR

Corpus Fund Collected by Apartment Owners’ Association Is ‘Supply’, GST Payable at Time of Collection; Rs. 7,500 Monthly Exemption Not Applicable: AAR

CBDT Orders Transfer of 3 Chief Commissioners / DGIT-Level Officers; Additional Charge Assigned

More like this

CBIC Releases FAQs on Duty Deferment Scheme for Eligible Manufacturer Importers to Boost ‘Make in India’

GST Payable on Corpus Fund at Time of Collection; Electricity Charges for Common Areas Taxable as Part of Maintenance Services: AAR

Corpus Fund Collected by Apartment Owners’ Association Is ‘Supply’, GST Payable at Time of Collection; Rs. 7,500 Monthly Exemption Not Applicable: AAR

About us

Company

Categories