2019 (5) TMI 1586 - AT - Customs

Mis-declaration of imported goods - goods declared as polyester texturised fabric which, upon detailed examination, was found to be incompatible with the description in the heading no. 5407 6190 of the First Schedule to the Customs Tariff Act, 1975 - scope of N/N. 36/2003-Cus dated 1st March 2003 - HELD THAT - The SCN although dated 12th August 2003, is based upon a test report that, admittedly, pertains to 2004-05, which is inconceivable. Learned Authorised Representative submits that the date in the show cause notice appears to be erroneous and such discrepancy does not make any difference to the proceedings. We do find some merit in the submission as it would have been impossible to issue a show cause notice just a day after the bill of entry was filed; it would appear that the show cause notice was authored on some other date. Appellant had claimed classification as fabric containing 85% or more by weight of textured polyester filaments. It is seen that the Textile Committee did not find any contrary reason to suggest discrediting this contention. The customs authorities chose to revise the classification based on a test report generated through the Deputy Chief Chemist after testing of the remnant samples. We do not find any evidence of that test report in the records. The reliance placed on the results of testing by Deputy Chief Chemist is not acceptable. If at all, the proper procedure would have been for the remnant samples, after due notice to the importer, to be subject to re-test by the Textile Committee. Thus, report of the Deputy Chief Chemist cannot overrule the earlier test results - the re-classification, with consequent disallowance of the benefit of notification, is not proper in law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Controversy over import classification of goods as 'polyester texturised fabric' for Customs Tariff Act heading and notification eligibility.

Analysis:
The judgment pertains to three appeals by M/s Smart Designer regarding the import classification of goods declared as 'polyester texturised fabric.' The goods were initially tested by the Textile Committee but later retested by the Deputy Chief Chemist, leading to a dispute over the classification under heading no. 5407 6190 of the Customs Tariff Act and eligibility for notification no. 36/2003-Cus.

The Learned Counsel argued that the retest by the Deputy Chief Chemist should not be accepted, citing precedents like Commissioner of Customs, Mumbai v. Atlas Mercantile Pvt Ltd and Shri Lakshmi Cotsyn Ltd v. Commissioner of Customs & Central Excise, Kanpur. The Tribunal found that the benefit of the exemption notification claimed by the appellant was applicable to goods classified under sub-heading 5407 61, whereas the lower authorities classified them under 5407 69. There was a discrepancy in the show cause notice date, suggesting it was authored on a different date than claimed.

The appellant claimed classification as fabric containing 85% or more by weight of textured polyester filaments, which the Textile Committee did not dispute. However, the customs authorities reclassified the goods based on the Deputy Chief Chemist's report, which lacked evidence in the records. The Tribunal emphasized reliance on the Textile Committee's expertise for a single test, as per circular no. 23/2004-Cus, and deemed the Deputy Chief Chemist's results unacceptable. The proper procedure would have been retesting by the Textile Committee, not the Deputy Chief Chemist. Consequently, the reclassification and denial of the notification benefit were deemed improper in law.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, highlighting the importance of following proper testing procedures and relying on the expertise of relevant authorities for accurate classification of imported goods.