2006 (10) TMI 345 - AT - Central Excise

Summary

Issues:
1. Whether the imported fabric is composed of textured multifilament yarn of polyester.
2. Whether the waiver of differential duty and penalty should be granted based on the evidence presented.

Analysis:
1. The judgment revolves around the dispute regarding the composition of the imported fabric, specifically whether it is made of textured multifilament yarn of polyester. The applicant argued against this composition, while the revenue relied on a test report from CRCL stating otherwise. The applicant referenced the HSN Explanatory notes of Section XI, Chapter 54 to highlight that the prescribed procedure for testing textile properties was not followed by the Chemical Examiner from CRCL. Additionally, the applicant presented a test report from IIT, emphasizing that the sample was not tested under the prescribed conditions. The Tribunal considered these arguments and found that the sample was not tested under the required conditions, indicating a strong case in favor of the appellants.

2. The Tribunal acknowledged that the CRCL test report indicated the fabric was composed of textured multifilament yarn. However, it was noted that the sample was not tested under specific conditions such as temperature, humidity, or pressure as required by the HSN Explanatory notes. This failure to follow the prescribed procedure raised doubts about the accuracy of the test results. Considering these discrepancies, the Tribunal decided to waive the pre-deposit of duty and penalty for hearing the appeal. The decision was influenced by a previous case where a similar waiver was granted in comparable circumstances, highlighting consistency in the Tribunal's approach.

3. In conclusion, the Tribunal directed the Registry to list the appeal along with a previous case for further proceedings. The judgment emphasized the importance of following prescribed procedures in testing textile properties and the significance of ensuring proper conditions for accurate results. The decision to grant the waiver of differential duty and penalty was based on the lack of adherence to testing protocols, strengthening the appellants' case and warranting a fair hearing of the appeal.