Karnataka High Court
M/S Impel Exports vs Union Of India on 27 November, 2025
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2025:KHC:49279
WP No. 8818 of 2022
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 8818 OF 2022 (T-CUS)
BETWEEN:
1. M/S IMPEL EXPORTS
(A PARTNERSHIP FIRM)
NO B-88/A, KSSIDC INDL. AREA
BOMMASANDRA
BENGALURU - 560 099
(REPRESENTED BY
SRI. ESAKKIRAJKUMAR S
MANAGING PARTNER)
REGISTERED UNDER THE
INDIAN PARTNERSHIP ACT
...PETITIONER
Digitally (BY SRI. M A NARAYANA, ADVOCATE)
signed by
SREEDHARAN
BANGALORE
SUSHMA
LAKSHMI AND:
Location: High
Court of
Karnataka
1. UNION OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
NORTH BLOCK
NEW DELHI - 110 001.
(REPRESENTED BY REVENUE SECRETARY)
2. PRINCIPAL COMMISSIONER (RA)
AND EX-OFFICIO
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NC: 2025:KHC:49279
WP No. 8818 of 2022
HC-KAR
ADDL. SECRETARY TO THE
GOVERNMENT OF INDIA
8TH FLOOR, WORLD TRADE CENTRE
CUFFE PARADE
MUMBAI - 400 005.
3. COMMISSIONER OF CUSTOMS
CENTRAL REVENUE BUILDINGS,
QUEENS ROAD,
BENGALURU - 560 001.
...RESPONDENTS
(BY SRI. SHISHIRA AMARANATH, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING ISSUE AN ORDER
IN THE NATURE OF A WRIT OF CERTIORARI OR ANY OTHER
APPROPRIATE WRIT OR ORDER TO QUASH AND SET ASIDE
ORDER NO.63-64/2022-CUS (SZ)/ASRA/MUMBAI DTD 15/16-02-2022
OF THE GOVERNMENT OF INDIA, PASSED BY THE PRINCIPAL
COMMISSIONER RA AND EX-OFFICIO ADDITIONAL SECRETARY TO
THE GOVERNMENT OF INDIA, UNDER SECTION 129DD OF THE
CUSTOMS ACT, 1962 (ANNEXURE-A) AND ETC.,
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
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NC: 2025:KHC:49279
WP No. 8818 of 2022
HC-KAR
CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, the petitioner seeks the following reliefs:-
i. Issue an order in the nature of a Writ of Certiorari or any other appropriate writ or order to quash and set aside Order No.63/64/2022-CUS (SZ)/ASRA/MUMBAI dated 15/16-02-2022 of the Government of India passed by the Principal Commissioner and Ex-Officio Additional Secretary to the Government of India, under section 129 DD of The Customs Act, 1962 (Annexure-A); and/or ii. Pass such other order/s as deemed fit in the facts and circumstances of this case including the award of costs.
2. A perusal of the material on record will indicate that the subject goods of the petitioner were exported during the period from July 2011 to September 2011 and duty drawbacks were sanctioned in favour of the petitioner. On 28.02.2013, the Additional Commissioner of Customs, ICD, Whitefield, Bangalore, issued a show cause notice to the petitioner seeking recovery of excess drawback granted in favour of the petitioner. The petitioner having submitted a reply to the said notice, the Additional Commissioner of Customs, ICD, Whitefield, Bangalore, passed an -4- NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR order dated 09.10.2013, confirming the demand, interest, penalty etc., as against the petitioner. Aggrieved by the same, the petitioner approached the Appellate Authority who also dismissed the appeal. Aggrieved by the orders of the Original Authority and Appellate Authority, the petitioner filed a revision petition, which was partly allowed by dropping all charges, except the demand of Rs.6,79,492/- together with interest towards the drawback granted in favour of the petitioner, who is before this Court by way of the present petition.
3. A perusal of the impugned orders will indicate that the respondents have proceeded to invoke and apply the Custom Circular No.42/2011 dated 22.09.2011 and the notification bearing No.75/2011-Cus. (N.T.) dated 28.10.2011. A perusal of the said circular will indicate that the same having been issued in September and October 2011, the said notification and circular are evidently prospective in nature, application and operation and would not apply to the goods exported by the petitioner for the period from July 2011 to September 2011 which were earlier in point of time and prior to the issuance of the aforesaid circular and notification. It is, therefore, clear that the authorities have -5- NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR completely misdirected themselves in applying and invoking the aforesaid circular and notification, which do not apply to the subject goods exported by the petitioner or the drawback sanctioned in favour of the petitioner for the period from July 2011 to September 2011, much prior to the issuance of the aforesaid circular and notification, which are prospective and not retrospective in nature, application or operation.
4. The CESTAT, South Zonal Bench, Chennai, in the case of COMMR. of C. EX., TIRUCHIRAPPALLI v. KARUR KCP PACKAGINGS Pvt. Ltd.1, held as under:-
"[Order per: R. Periasami, Member (T)]. - All the seven appeals filed by Revenue and six cross-objections filed by the respondents are taken up together as the issue involved in these appeals are common and related to classification of Flexible Intermediate Bulk Containers (FIBC) would fall under Chapter Heading 3920 90/3923 29 90 or 6305 32 00 of CETH.
2. In the cases of Appeal Nos. E/76/2011 and E/146/2012, the Department issued show cause notices to the respondents proposing to classify the goods FIBC under Chapter 3923 29 90 as articles of plastics. The adjudicating authority in Order-in-Original classified the 1 2016 (331) E.L.T. 604 (Tri. - Chennai) -6- NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR FIBC under Chapter 3923 29 90. On appeal by the respondents, the Commissioner (Appeals) in the impugned orders allowed the appeals and classified the goods under Chapter 6305 32 00 of CETH and set aside the adjudication order. Hence Revenue has preferred these appeals.
3. In Appeal Nos. E/140/2012 and E/147 to 150/2012, the adjudicating authority issued show cause notice for re-classification of FIBC under Chapter 6305 32 00 and confirmed the classification. On appeal by the Department against the Orders-in-Original, Commissioner (Appeals) dismissed the appeals of the Revenue and upheld the adjudication orders. Hence, Revenue has preferred these appeals.
4. Heard both sides and perused the records.
5. The learned AR for Revenue reiterated the grounds of appeal (A) to (I). He submits that as per Chapter Note 1 of Chapter 63 provides that the said Chapter applies only to made-up articles of any textile fabrics. This implies that only articles made up of textile fabrics are covered under Chapter 63 whereas FIBC is made from PP strips and classifiable under articles of plastics under Chapter 3920 90/3923 29 90. He relied on the decision of the Hon'ble High Court of Madhya Pradesh in the case of Raj Pack Well Ltd. v. UOI - 1990 (50) E.L.Τ. 201 (Μ.Ρ.) which was relied in their grounds of appeal at page 18. He also relied on the following case laws :-
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(a) Shellya Plastics India Pvt. Ltd. v. CCE - 2004 (174) E.LT. 431 (Kar.)
(b) Sri Rama Polybags v. CСЕ - 2008 (229) E.L.T. 135
(c) UOI v. Pramact Plastics Pvt. Ltd. - 2000 (119) E.L.T. A173 (S.C.) Further, he relied on the Board's Circular dated 8/1992, dated 24-9-1992 issued under Section 37B of Central Excise Act, 1944 for uniform classification in respect of such goods and directed field formation that HDPE strips and tapes shall henceforth be classified under sub-
heading 3920.32 and sacks made there from under sub- heading 3923.90 of the Tariff. He submits that the product merits classification under Chapter 39. On trade parlance, it is known only as plastics bags. Therefore, as per Rules 2 and 3 of Interpretative Rules classification of the product should be classified under Chapter He submits that these are not textile made ups and not covered under Chapter
63. Even though there is a specific entry of FIBC under Chapter 63 by virtue of Section Note 1 of Section XI and Note 1 of Chapter 63 these products are not classifiable under Chapter 63 and rightly classified under Chapter 39.
6. On the other hand, learned counsels for the respondents reiterated the findings of the impugned order and submits that Commissioner (Appeals) has correctly classified the products under 6305 42 00. They drew our attention to the HSN Explanatory Notes for both Chapter 39 and Chapter 63. As per HSN Note for Chapter 39 -8- NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR which clearly excludes articles of FIBC falling under 6305 correspondingly HSN Explanatory Note 63 specifically includes FIBC under 6305. They also relied on DGFT Minutes dated 25-7-2013 (at page 75 of paper book) where the issue of classification of export product FIBC had been considered by taking into the opinion given by Department of Chemicals and Petrochemicals, Directorate of Textile Commissioner and Department of Industries and decided that FIBC are covered under ITC (HS) 63 and not under ITC (HS) 39. They further relied on Board's Circular dated 22-9-2011 wherein at para 13 of the Circular, Board has clarified that FIBC are made up of manmade textile and would be classified under Drawback Tariff Item 6305 02. They also relied on the decision of Hon'ble High Court of Madras reported in 2015 (317) ELT. 453 (Mad.) wherein the Hon'ble High Court at para 9 referring to DGFT and C.B.E. & C. circulars held that FIBC are classifiable under Chapter 63. He also relied on Order-in-Appeal passed by Commissioner (Appeals), Ahmedabad dated 17-6-2014 wherein he classified FIBC under Chapter 6305 and the Department has accepted the classification and has not filed any appeal. He also relied on US International Trade Commission and Harmonized Tariff for the Tariff of 6305 32 00 and submitted that US Tariff Commission has also clarified that identical sample of Indonesian origin was classified under USH 6305 32 00. He also explained the definition of textiles with reference to website of Textile Industry. He relied on CCE v. Champdany Industries Ltd. - 2009 (241) -9- NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR ELT 481 (S.C.) and Porritts & Spencer (Asia) Ltd. v. State of Haryana-1983 (13) E.L.T. 1607 (S.C.) Shri A.K. Jayaraj further submitted that the Department issued five show cause notices for the subsequent periods against M/s KCP Karur Packaging, the respondent in these appeals, and the adjudicating authority vide order dated 7-5-2015 dropped the proceedings and accepted the classification under 6305.
7. We have carefully considered the submissions of both sides and perused the records including HSN Explanatory Notes, Board's Circular relied by the respondent and also grounds of appeal and the cross- objections. For the purpose of appreciation of facts, we take up Appeal No. E/76/2011 in the case of M/s. Karur KCP Packagings P. Ltd.
8. We find that the only issue in these appeals is whether FIBC is classifiable under Chapter 3923 29 90 as contended by Revenue or under 6305 32 00 as held by Commissioner (Appeals) We find that the period involved in the present appeals relate to the years 2008-09 and 2009-10 and on perusal of the Order-in-Original also Order-in-Appeals, we find that there was no demand of any duty or dispute on rate of duty. The issue of classification of FIBC had arisen purely on account of export of FIBC and claiming export benefit of rebate/drawback. This is evident from the Order-in- Original dated 13-8-2010 in the case of Karur KCP Packagings Pvt. Ltd. where the adjudicating authority in
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR his order has classified the PP bags, FIBC under 3923 29 00 and also ordered that all the goods exported and which were classified under 6305 from 17-4-2009 and 15-3-2010 shall be reclassified under Chapter 39. Therefore, this shows that that the classification had arisen for export goods not related to demand of central excise or rate of duty. In some cases lower authorities confirmed classification of FIBC under Chapter 6305 and Revenue preferred appeal against the Order-in-Onginal for classifying under 3920 and in other cases the Commissioner (Appeals) dismissed the Revenue's appeals which have led to the present appeals by Revenue.
9. On perusal of the impugned orders, we find that Commissioner (Appeals) in the case of M/s. Karur KCF Packaging Pvt. Ltd. has dealt the issue in detail at Paragraphs 4.1, 4.2, 4.3 and 4.4. Paragraph 4.1 is reproduced below :-
"I have carefully gone through the appeal, oral/written submissions made by the appellants and also the provisions of law in the subject matter. The issues to be decided is whether the FIBC bags manufactured and exported by the appellant are rightly classifiable under CETH 3923 29 90 or CETH 6305 32 00. The tariff entries read as under :-
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR Section VII Chapter 39: Plastic and Articles thereof 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures of plastics Sacks and Bags (including cones) 2100 Of polymers of ethylene 29 Of other plastics 2910 Of polyvinyl chloride 2990 Other Section XI Textiles and Textile articles Chapter 63: Other made ups Textile Articles 6305 Sacks and bags of a kind used for the packing of goods Of man-made textile material 3200 Flexible intermediate bulk container In the British Standard EN ISO 21898-
2005, the Flexible Intermediate Bulk Container (FIBC) is defined as intermediate bulk container having the body made of flexible material such as woven fabrics, plastics film or paper, designed to be in contact with the contents, either directly or through an inner liner and collapsible when empty. Further, it is stated that FIBC is designed and intended to be used for a multitude of fillings and discharges. The Central Excise Tariff is based on HSN and it is specifically mentioned in the Chapter 3923 of HSN that, the heading excludes, inter alia, house hold articles and flexible intermediate bulk
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR containers of heading 6305. In the sub-heading explanatory note for 6305.32 it is also mentioned in the HSN that "flexible intermediate bulk containers are usually made of poly propylene woven fabrics and generally have a capacity ranging from 250 kgs. to 3000 kgs. They may have lifting straps at the four top corners and may be fitted with openings at the top and bottom to facilitate loading and unloading. They are generally used for packing, storage, transport and handling of dry, flow able materials". Therefore, the FIBC manufactured by the appellant satisfy all the above conditions and hence are classifiable under CETH 6305.32 only."
10. Revenue's main contention is that the product FIBC should be classified under 3923 as articles of plastics and not articles of textiles. They also relied on the decision of the Hon'ble High Court of Madhya Pradesh in the case of Raj Pack Well (supra). On perusal of the said High Court order, we find that the entire issue relates to HDPE strips and tapes for the period prior to 2005-06. Revenue also relied on Board's Circular dated 24-9-1992 which was issued prior to alignment of Central Excise Tariff and Customs Tariff. The present appeals relate to the period 2008-09 and 2009-10 and during this period Central Excise Tariff has already been aligned with HSN and the above High Court's direction and Board' Circular relied by Revenue are not applicable to the present case
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR where Chapter 63 was expanded and fully aligned with HSN. Since the classification of FIBC is linked with the export benefit, it is relevant to see para 13 of the Board Circular dated 22-9-2011 which is reproduced as under :-
"There has been a dispute regarding classification of FIBC (Flexible Intermediate Bulk Containers). It has been represented that the field formations are classifying the FIBCs under Chapter 39 whereas the FIBC finds a specific mention under tariff item 630502 of the drawback schedule and the exporters are being denied drawback mentioned against the heading 630502 in the Drawback Schedule. It is hereby clarified that FIBCs which are made of manmade textile material would be classifiable under drawback tariff item 630502. FIBCs which are big or bulk bags or super sacks made of polymers of ethylene and other plastic material would however, be classifiable under chapter 39 of the drawback schedule."
11. The Board has issued the above clarification for the purpose of All Industry Rates of Duty Drawback and categorically clarified that classification of the product FIBC under Drawback Tariff Item 6305. It is pertinent to state that both the Drawback Schedule and ITC Code issued by DGFT and CETH are aligned with HSN, the classification issued by the Board assumes vital importance and Revenue cannot change the classification under Central Excise Tariff Chapter 3923.
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12. Further, we find that Point No. 29 of the Minutes of the Meeting of DGFT held on 25-7-2013 clarified item FIBC which is reproduced as under-
"The Committee considered the case as per agenda along with other relevant papers and considered the written comments received from Deptt. of Chemicals & Petrochemicals vide their O M. No. 46011/37/2012- PCII, dated 18-7-2013, Regional Office of Textile Commissioner, Noida vide their OM. No. 21(25)/08/CCY/RON/307, dated 29-6-2013 and e- mail dated 15-7-2013 received from DIPP The Committee observed that the textile material like manmade yarn, flexible tapes, fabrics, etc uses the synthetic polymers as raw material. Therefore, it may be drawn that the textile grade polymers as a raw material are used to manufacture the tape/stripe/yarn, etc. Since the process of manufacturing of FIBC involves extrusion of polypropylene strip from the polymers which further lead to weaving process on shuttle circular loom, therefore, FIBC is a technical textile. The Committee after deliberation decided that items in respect of Flexible Intermediate Bulk Containers are covered under ITC (HS) Code 63 and note under ITC (HS) Code 39."
Therefore, both the Board's Circular and DGFT have clarified that FIBC is classifiable under Chapter 6305.
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13. We also find that the Hon'ble High Court in the respondent's own case, ie, M/s Karur KCP Packaging Pvt Ltd. allowed the writ petition holding that the product is classifiable under 6305 32.00. Para 9 of the Hon'ble High Court's order is reproduced as under-
"Apart from the above, the issue also has been decided by the Director General of Foreign Trade, Udyog Bhawan, classifying that Flexible Intermediate Bulk Containers are covered under ITC (HS) Code 63 and not under ITC (H (HS) Code 39. The Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi, in Circular No. 42/2011-Cus, dated 22- 9-2011, F. No. 609/82/2011-DBK, also has settled the dispute regarding the classification of FIBC by bringing it under Chapter 63, therefore, this Court has no hesitation to allow the prayer made by the petitioner."
14. We also find that US International Trade Commission rulings dated 1-9-2011 for Tariff No. 6305 3200 10 for the classification of FIBC originated from Indonesia wherein the Commission has given ruling that FIBC is classifiable under 6305320010 of US (HTS).
15. Further, the HSN Explanatory Note of Chapter 39 clearly excludes FIBC of Heading 6305 from Chapter 3923 Parallelly HSN Explanatory Note 6305 3200 specifically includes description of FIBC. It is pertinent to state that prior to alignment of Tariff with the HSN Chapter
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR 63 of CETH had only one sub-heading, ie, 6301 till 1994-
95. With effect from 2005 the Central Excise Tariff was aligned with HSN and the Chapter 63 expanded to include more sub-headings from 6301 to 6310.
16. In view of the specific clarification of the Board and by respectfully following the Hon'ble High Court's order, we hold that FIBC is rightly classifiable under 6305 32 00 and not under 3923 29 90. Therefore, we do not find any infirmity in the order passed by the Commissioner (Appeals) and we uphold the same. Accordingly, the appeals filed by Revenue are dismissed. The cross- objections being in the nature of comments/reply to the appeals, they are disposed of."
5. In view of the aforesaid facts and circumstances, I am of the considered opinion that the impugned order passed by the respondent No.2 / Revisional Authority deserves to be quashed.
6. In the result, I hereby pass the following:-
ORDER
i) The Writ Petition is allowed.
ii) The Order No.63-64/2022-CUS (SZ)/ASRA/MUMBAI dated 15/16-02-2022 of the Government of India, passed by the Principal Commissioner and Ex-Officio Additional Secretary
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NC: 2025:KHC:49279 WP No. 8818 of 2022 HC-KAR to the Government of India, under Section 129DD of the Customs Act, 1962 (Annexure-A) is hereby quashed.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE Bss List No.: 2 Sl No.: 12