2011 (3) TMI 653 - AT - Customs

Demand - Classification - Custom authorities only opened 22 bales and on examination of these 22 bales it was found that 18 bales were containing cut and soiled material and remaining four bales containing tow in running length with negligible defects - The report of CRCL is not definite as the note given in the report is to the effect that in view of the material contained in the sample the whole consignments is to be carefully examined - the expert opinion is in respect of two samples taken from two bales only which shows that it fulfils the parameters to classify the goods as synthetic filament classifiable under Heading 5501 of the Customs Tariff - Decided in favour of the assessee

Summary

Issues: Classification of imported goods under Customs Tariff, Examination and sampling of goods, Expert opinions, Justification of differential duty and penalties

In this case, the appellant imported goods declared as synthetic waste under Tariff Heading 5505.10 of the Customs Tariff, but the Revenue disagreed, classifying them as acrylic tow under Heading 5501.30. The dispute arose from the examination of 22 bales, revealing soiled material and tow with defects. Six samples were taken, with conflicting expert opinions from CRCL and Textile Committee Lab. The appellant argued against the validity of the samples and reports, questioning the justification for reclassification and penalties imposed. The Revenue contended that representative samples were taken, supporting their classification decision. The Tribunal noted discrepancies in the examination process, where not all bales were opened, and samples were not taken from all bales. The CRCL's advice to examine the entire consignment was disregarded. The Textile Committee Lab's reports varied, with two samples indicating acrylic tow and one as tow waste. The Tribunal found the expert opinions inconclusive for all 264 bales, concluding that differential duty and penalties could only apply to the two sampled bales classified as tow. Therefore, the demand for differential duty and penalties for the remaining 262 bales was deemed unjustified, leading to the setting aside of penalties imposed on the appellant. The appeal was disposed of accordingly.