2018 (2) TMI 417 - AT - Customs

Benefit of N/N. 6/2012 Sl.No. 234 - import of goods declared as Glass Fiber Reinforced Guypsum Boards (GRG Board) of Tapered Edge Boral brand - denial of cross examination - principles of natural justice - Held that - on the one hand, the CTA laboratory where the samples of impugned consignment had been sent did not test presence/content of glass fibre. At the same time, the Customs laboratory has confirmed the correctness of the goods as declared in a number of imports made prior and subsequent to the one under dispute - Exemption N/N. 6/2006-CE only exempts goods imported Glass Fibre Reinforced Gypsum Board (GRG) at Sl.No.234 (iv) without any condition thereto. Thus the insistence on IS standards by the customs authorities is not a requirement in the said notification. The goods are not conforming to the standards of Gypsum Reinforced Gypsum Boards even when the Deputy Director, CTAL has stated in cross examination that they did test presence/content of glass fibre - We are also unable to fathom how even the request for re-testing of the samples made by the appellant has been dismissed peremptorily by the lower appellate authority for the reason that further re-testing would not serve any fruitful purpose. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Central Excise Notification No.6/2012, Conformity to standards for Glass Fiber Reinforced Gypsum Boards, Reliance on test reports by different laboratories, Re-testing request denial, Interpretation of Exemption Notification No.6/2006-CE.

Classification of Imported Goods:
The appellant imported goods declared as "Glass Fiber Reinforced Gypsum Boards" and claimed Central Excise Notification No.6/2012 benefit. The Department sent samples for testing to ascertain conformity to standards. The Chemical Testing and Analytical Laboratory reported that the samples were Gypsum Plaster Boards, not Glass Reinforced Gypsum Boards. Consequently, a show cause notice was issued proposing confiscation, duty exemption denial, CVD demand, and penalties. The original authority confirmed this, upheld by the Commissioner (Appeals), leading to the appeal.

Conformity to Standards:
The appellant argued that the testing officer did not conduct the necessary test to determine the presence of glass fibers in the samples. They requested re-testing, which was denied by the adjudicating authority and the Commissioner (Appeals). The appellant contended that trade recognition should determine the classification, citing relevant judgments. They also highlighted that subsequent imports of similar goods were considered Glass Fiber Reinforced Gypsum Boards by the Customs laboratory.

Reliance on Test Reports:
The Tribunal observed discrepancies between the reports of the Chemical Testing and Analytical Laboratory and the Customs laboratory regarding the nature of the imported goods. The Customs laboratory confirmed previous and subsequent consignments as Glass Fiber Gypsum Boards, while the testing officer did not test for glass fiber presence in the impugned samples. The Tribunal emphasized the lack of necessity for conformity to IS standards in Exemption Notification No.6/2006-CE.

Re-testing Request Denial:
The appellant's request for re-testing was dismissed by the lower appellate authority, citing procedural reasons. The Tribunal found this dismissal unjustified, especially considering the conflicting test reports and the importance of determining the presence of glass fibers in the samples.

Interpretation of Exemption Notification:
The Tribunal referenced past judgments to support the view that trade recognition should guide the classification of goods, especially when the exemption notification does not specify adherence to certain standards. They emphasized that the insistence on IS standards by the customs authorities was unwarranted in this case. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief as per law.