2023 (5) TMI 1288 - AT - Customs

Classification of imported goods - un-coated calcite powder - to be classified under Heading No. 25309030 or under Tariff Heading No 28365000? - HELD THAT - It is found from the factual matrix that at the relevant time Kandla port CRCL laboratory, was not having requisite test facility, even as per the case laws cited as well as the Board Circular No. 43/2017-Cus dated 16.11.2017. Further, once a report was received by the party and it sought re-test within reasonable time and simultaneously or even before the test report did test at the private lab same should have been accepted. It is also found that the impugned order of the Commissioner (Appeals) gives no reasons as to why the department could not agree with the request of re-test. The test report as submitted by the party is required to be accepted - classification as claimed by the party on that basis is accepted - The appeal is therefore allowed.

Summary

Issues: Classification and assessment of imported goods under different tariff headings based on conflicting test reports.

Summary:
The case involved a dispute regarding the classification and assessment of goods imported by the appellant, claimed to be "un-coated calcite powder" under Heading No. 25309030. The Department, after conducting a test through the CRCL laboratory, contended that the item was actually "uncoated Precipitated Calcium Carbonate" and should be assessed under Tariff Heading No. 28365000. The appellant requested a re-testing through other approved labs due to doubts about the initial test conducted by CRCL, Kandla. Despite multiple requests for re-testing and submission of a private lab test report supporting their claim, the Department did not respond adequately. The Lower Authorities rejected the private lab report, but failed to address the appellant's procedural compliance with the custom manual for re-testing.

The appellant relied on various case laws and circulars to support their argument that CRCL, Kandla did not have the necessary testing facilities for the specific item in question. They highlighted the permissibility of testing by outside laboratories when CRCL was incapable, as stated in relevant circulars. The appellant's contention was supported by precedents where similar classification disputes were resolved in favor of importers due to inadequate testing facilities at CRCL. On the other hand, the Department defended the classification based on the CRCL test report.

The Tribunal noted that CRCL, Kandla did not have the required test facility at the relevant time, as supported by case laws and circulars. Considering the timely request for re-testing and the submission of a private lab report before the Department's response, the Tribunal ruled in favor of the appellant. The Tribunal emphasized the lack of justification in the impugned order for rejecting the re-test request. Consequently, the appellant's test report was accepted, and the classification as claimed by the appellant was upheld. The appeal was allowed in favor of the appellant and the CHA.

(Dictated & Pronounced in the Open Court)