2019 (10) TMI 696 - AT - Customs

Mis-declaration of imported goods - natural calcite powder - It was alleged that the goods had been mis-declared as the test results found the samples to be precipitated calcium carbonate and, thereby not eligible for exemption N/N. 21/2002-Cus dated 1st March 2002 - HELD THAT - The contention of the appellant that oil absorption value and particle size are both critical in determining classification cannot be lost sight of. The test report does not refer to particle size and it has been officially admitted that the chemical facilities of the department is deficient in capacity to carry out that test. As the test result is faulty, we apply the principle laid down in M/S. GULSHAN POLYOLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, MEERUT 2018 (12) TMI 1573 - CESTAT ALLAHABAD where it was held that appellant has correctly classified the Ground Natural Calcium Carbonate under chapter heading 25.30 of Central Excise Tariff Act, 1985 as Revenue has failed to produce any corroborative evidence in support of their classification. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Mis-declaration of imported goods as 'natural calcite powder'.
2. Classification of goods under specific headings for exemption.
3. Reliability of test reports for classification.
4. Deficiency in testing facilities for specific tests.
5. Applicability of previous tribunal decisions on classification.

Analysis:
1. The appeals were filed against the order of the lower authority, confirming mis-declaration of imported goods as 'natural calcite powder'. The goods were found to be 'precipitated calcium carbonate', leading to denial of exemption under a specific notification. Differential duty, confiscation, and penalties were imposed, which were upheld in the impugned order.

2. The appellant contended that the intent of the notification was to exempt 'natural calcite powder' in all forms, including cleaned forms, while excluding synthetic preparations like 'precipitated calcium carbonate'. The classification under specific headings for exemption was disputed, emphasizing the need for reliable test reports to determine the classification accurately.

3. The reliability of the test reports was questioned by the appellant, citing deficiencies in the testing process, especially the lack of testing for 'particle size'. Previous tribunal decisions, such as Gulshan Polyols Ltd case, were referred to for guidance on classification criteria and the importance of conformity with specific standards.

4. It was highlighted that the official admission of deficiency in testing facilities for specific tests, like 'particle size', impacted the accuracy of the classification. The reliance on test results without comprehensive testing to determine 'natural calcite powder' raised doubts about the classification made at the time of import.

5. The appellant's argument regarding the critical nature of 'oil absorption value' and 'particle size' in classification was supported by previous tribunal decisions. The deficiency in testing facilities and the faulty test results led to the application of principles established in previous cases to set aside the impugned order and allow the appeals, emphasizing the importance of accurate classification based on reliable testing procedures.