2017 (3) TMI 718 - AT - Central Excise

Re-classification of goods - fly waste - classified under heading 5505.20 or under heading 5601.20? - Held that - the appellant had been initially directed to classify the goods under 5601 and any re-classification thereafter would have to be based on proper evidence - In the absence of credible test results pertaining to length of fibre and in the absence of any evidence to support the re-classification proposal in the notice, we hold that the impugned order has erred - appeal allowed - decided in favor of appellant.

Issues:
Classification of goods under Central Excise Tariff Act, 1985; Compliance with Tribunal's directions; Admissibility of test report; Proper classification without ascertainment of fibre length; Interpretation of headings 5505.20 and 5601; Reliance on Explanatory Notes to HSN; Discrepancies in classification; Requisite evidence for re-classification.

Classification of Goods:
The appeal pertains to the classification of 'fly waste' under heading 5505.20 of the Central Excise Tariff Act, 1985, with a demand for differential duty and penalty. The appellant contests the classification, arguing that the goods should be classified under heading 5601.30. The Tribunal notes the importance of ascertaining the length of the fibre before determining the appropriate classification.

Compliance with Tribunal's Directions:
The Tribunal highlights that the impugned order failed to fully comply with the directions given in the previous round of dispute. It emphasizes the necessity of discrediting the claimed classification before adopting an alternative one. The adjudication process should prioritize addressing the initial classification claim before considering alternative classifications.

Admissibility of Test Report:
The Tribunal questions the validity of the test report relied upon in the impugned order, noting its inadequacy in determining the length of the fibre. Without conclusive evidence regarding the fibre length, the adoption of an alternative classification is deemed improper.

Proper Classification without Ascertainment of Fibre Length:
The appellant argues that the impugned order did not adhere to the Tribunal's direction and wrongly classified the goods under heading 5505.20 without determining the length of the fibre. The Tribunal stresses the importance of having credible evidence, such as the fibre length, before re-classifying goods.

Interpretation of Headings 5505.20 and 5601:
The Tribunal examines the definitions and scope of headings 5505.20 and 5601 in the Central Excise Tariff Act, 1985. It notes that 'fly waste' generated by the appellant falls within the meaning of 'flock' if the fibre length is less than 5 mm. The Tribunal emphasizes the need for accurate classification based on the characteristics and definitions provided in the tariff headings.

Reliance on Explanatory Notes to HSN:
The Tribunal considers the Explanatory Notes to the HSN, specifically regarding headings 5505.20 and 5601, in determining the appropriate classification of the disputed goods. It emphasizes the importance of aligning the classification with the explanatory notes to ensure accuracy and consistency.

Discrepancies in Classification:
The Tribunal observes discrepancies in the classification process, noting that the appellant was initially directed to classify the goods under heading 5601. However, the re-classification lacked proper evidence and credible test results regarding the fibre length, leading to errors in the impugned order.

Requisite Evidence for Re-Classification:
In the absence of substantial evidence supporting the re-classification proposal and the lack of credible test results regarding the fibre length, the Tribunal concludes that the impugned order was erroneous. Consequently, the Tribunal sets aside the impugned order and allows the appeal, emphasizing the importance of proper evidence in the classification process.

← Previous Next →