2011 (9) TMI 599 - HC - Customs

Classification - Import of polyester fabric (Untextured) - Assessee classified under 5407 6190 Revenue under 5407 5290 - Held That - Chemical Examiner has been examined as a witness, who has deposed that the procedure prescribed for examination of yarn has not been adopted. Tribunal findings based on facts no question of law arises.

Summary

Issues:
Classification of imported polyester fabric under Chapter Heading 5407 6190, reliance on CRCL test reports, adherence to prescribed procedures for testing, intentional misdeclaration by the importer, applicability of the judgment in Reliance Cellulose Products Ltd v. Collector, Hyderabad.

Classification of Imported Fabric:
The case involved the classification of imported polyester fabric by the revenue under Chapter Heading 5407 5290, leading to a differential duty claim. The Tribunal accepted the appeal filed by the importer, disputing the classification based on the CRCL test reports, which were not conducted following the prescribed protocol. The Adjudicating Authority found intentional misdeclaration by the importer to evade duty, but the Tribunal disagreed, emphasizing the failure to follow the standard method for testing the textured nature of the fabric.

Reliance on CRCL Test Reports:
The revenue relied on the reports of CRCL to support their claim that the imported fabric did not match the declaration. The importer contested these findings, leading to re-testing by CRCL, which confirmed the composition of the fabric. The Tribunal noted that the departmental laboratory did not adhere to the standard method prescribed for testing, as required under the explanatory notes. The Tribunal's decision was based on the fact that the prescribed protocol was not followed, rendering the revenue's reliance on the reports questionable.

Prescribed Procedures for Testing:
The Tribunal highlighted the importance of following the prescribed procedures for testing, specifically the standard method for checking the textured nature of filament as per the American Standard for Testing Material. The failure to adhere to these protocols raised doubts about the accuracy of the test results and the subsequent classification of the imported fabric.

Intentional Misdeclaration by Importer:
The Adjudicating Authority concluded that the importer intentionally misdeclared the fabric to avoid paying the appropriate duty. However, the Tribunal's examination revealed that the Chemical Examiner admitted to not following the prescribed procedure for examination, casting doubt on the accuracy of the initial findings. The Tribunal's decision was based on factual evidence and did not find merit in the argument of intentional misdeclaration.

Applicability of Judgment in Reliance Cellulose Products Ltd v. Collector, Hyderabad:
The appellant relied on a Supreme Court judgment to argue for re-examination of the issue due to discrepancies in the Chemical Examiner's report. However, the Court dismissed this argument, stating that in the present case, the Chemical Examiner admitted to not following the prescribed procedure. Therefore, the Tribunal's decision was upheld as being based on factual findings, and no substantial question requiring the Court's intervention was identified.

In conclusion, the High Court dismissed the appeals, upholding the Tribunal's decision based on the failure to follow prescribed testing procedures and the lack of substantial questions warranting further examination by the Court.