CESTAT Kolkata Upholds Bed Sheet Classification Under CTH 6304

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Dated: 13.05.2025

CESTAT Kolkata Upholds Bed Sheet Classification Under CTH 6304

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, dismissed the Department’s appeal and affirmed the classification adopted by Silpha Finvest Pvt. Ltd. for imported bed sheets made of 100% polyester. The Tribunal held that the goods were rightly classified under CTH 6304 and not under CTH 5407, rejecting the Revenue’s charge of misdeclaration and its demand for penalty and redemption fine.

Case Snapshot

Importer: Silpha Finvest Pvt. Ltd., Kolkata
Goods: Bed sheets made of 100% polyester
Declared Classification: CTH 6304 (Bedspreads & other furnishing articles)
Department’s Reclassification: CTH 5407 (Woven fabrics of synthetic filament yarn)
Show Cause Notice: Alleged misdeclaration and suppression
Adjudication Result: Classification changed; goods confiscated; duty, fine, and penalty imposed

Key Issues Before the Tribunal

Whether the imported goods were rightly classifiable under CTH 6304 as bed sheets or under CTH 5407 as polyester woven fabrics
Whether misdeclaration was wilful to attract penalties under Sections 112(a) and 114A of the Customs Act
Whether confiscation and redemption fine were justified

CESTAT’s Observations

The Tribunal emphasized that while the items were made of woven synthetic polyester filament yarn, the end-product was clearly bed sheets, which fall under Chapter 63 of the Customs Tariff Act.
Heading 6304 covers “Other furnishing articles, including bedspreads” and explicitly refers to bed sheets.
The Tribunal held that the commercial identity and declared use as bed sheets must prevail in classification, not merely the fabric type.
As the importer had declared quantity in pieces (numbers) and described the item as “100% polyester bed sheets,” there was no misdeclaration or concealment of material facts.

Final Decision

Classification under CTH 6304 upheld
Confiscation and penalty orders set aside
Redemption fine and penalty under Section 112(a) quashed
Revenue’s appeal dismissed, and cross-objection of the importer disposed accordingly

Legal Significance

This ruling reinforces:

The principle that finished products must be classified based on their end-use and trade identity, not merely by raw material.
That Chapter 63 prevails for made-up textile articles like bed sheets, even if they are made of synthetic filament yarn.
The need for Customs to adopt a commercial parlance test and avoid excessive penal action without evidence of intent.

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Source: CESTAT Kolkata

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