2008 (11) TMI 451 - AT - Central Excise

Summary

Issues involved: Classification of imported goods under Chapter Heading No. 5407 61 90, confiscation of goods due to misdeclaration, imposition of redemption fine, reliance on test reports for re-classification.

Classification of Goods: The appellant imported polyester fabric and claimed classification under Chapter Heading No. 5407 61 90 of Customs Tariff. Samples were tested by CRCL, indicating the fabric was composed of textured filament yarn of polyester, leading the Revenue to seek re-classification. The appellant argued that the test was not conducted following the prescribed protocol, and requested re-testing, which was denied. They contended that the visual examination alone cannot determine the permanency of crimps on the yarn, a crucial factor in textured yarn classification.

Protocol Compliance: The appellant highlighted that the HSN Explanatory notes prescribe specific testing protocols for determining textured yarn, including the use of standard test methods like ASTM D3883-99. They argued that the test report did not use the appropriate apparatus for straightening yarn removed from fabrics, as required by the standard methods. Visual examination alone was deemed insufficient to ascertain the permanent crimps on the yarn, crucial for textured yarn classification.

Reliance on Test Reports: The Revenue relied on the CRCL test report, which indicated the fabric as composed of textured filament yarn of polyester. However, during cross-examination, the chemical examiner admitted to not following the prescribed testing standards under the HSN Explanatory notes and ASTM. The failure to adhere to the testing protocols raised doubts about the accuracy of the classification based on the test report, leading to the impugned order being deemed unsustainable and subsequently set aside.

Redemption Fine Imposition: The adjudicating authority held that no redemption fine was imposable as the goods were not available for confiscation. The Revenue appealed this decision seeking the imposition of a redemption fine in respect of the confiscated goods. However, since the impugned order was set aside due to non-compliance with testing protocols, the appeals filed by the importers were allowed, and consequently, the appeals by the Revenue for redemption fine imposition were dismissed.

This detailed analysis of the judgment showcases the critical issues of classification, protocol compliance, reliance on test reports, and redemption fine imposition, ultimately leading to the decision in favor of the importers based on the non-compliance with prescribed testing standards.