2014 (2) TMI 925 - AT - Customs

Classification of goods - whether the goods imported are classifiable as other multiple folded or cabled artificial yarn under sub-heading no.54034990 of the Tariff or as chenille yarn under sub-heading no.56060090 - Held that - whether the yarn, in question, is chenille yarn covered by heading 5606 of Chapter 56 of HSN or is polyester filament yarn covered by heading no.5403 of the HSN has to be decided by testing. In this regard while NITRA in its report has categorically stated that the yarn, in question, is not chenille yarn, and on the basis of this report classification under Heading no.5606 (sub-heading 56060090) is ruled-out, the report of the CRCL is inclusive as it is silent as to whether the characteristics of the yarn, in question, are those of chenille yarn and it does not give any conclusion. We do not accept the Revenue s plea that preference should be given to the report of Textile Committee or CRCL as compared to the report of NITRA. Therefore, it is the report of NITRA, which would have to be relied. If the adjudicating authority had doubts about the correctness of the report of NITRA, he could have called the chemical examiner of NITRA for cross examination for ascertaining as to which testing method has been adopted and what is the basis for his conclusion, but his has not been done - Decided against Revenue.

Summary

Issues: Classification of imported goods as chenille yarn or polyester filament yarn.

Analysis:
The appeal filed by the Revenue concerns the classification of imported goods declared as yarn made of polyester filament. The dispute arises from the classification claimed under sub-heading no.54034990 of the Tariff by the respondent, while the Revenue argues for classification under sub-heading no.56060090 as chenille yarn. The initial rejection of the declared value by the Asstt. Commissioner led to a series of tests and reports from different entities to ascertain the nature of the imported goods. The NITRA report stated that the goods were not chenille yarn, while the CRCL report was inconclusive on this aspect. The Asstt. Commissioner, relying on the CRCL report, enhanced the value and classified the goods as chenille yarn. However, the Commissioner (Appeals) set aside this decision, emphasizing that the CRCL report did not confirm the goods as chenille yarn and that the NITRA report should be relied upon. The Commissioner (Appeals) concluded that the goods should be classified under sub-heading no.54034990 based on the characteristics of the yarn and the classification provided by the appellant themselves.

The main point of contention revolves around the classification of the imported goods as either chenille yarn or polyester filament yarn. The Tribunal noted that the NITRA report explicitly stated that the goods were not chenille yarn, leading to the exclusion of classification under heading no.5606. In contrast, the CRCL report did not definitively confirm the goods as chenille yarn. The Tribunal rejected the Revenue's argument favoring the Textile Committee or CRCL reports over NITRA's findings, emphasizing the need to rely on the conclusive report. The Tribunal highlighted the failure of the adjudicating authority to adequately address doubts about the NITRA report's accuracy, suggesting cross-examination as a viable option. Ultimately, the Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the Revenue's appeal and affirming the classification of the goods under sub-heading no.54034990 as per the NITRA report's findings.