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TMI Blog1996 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... 1702.30 of CET which was assessed provisionally was sought to be revised to classify the goods under the category of Other sugars falling under the sub-heading 1702.19 of the Central Excise Tariff Act, 1985, resulting in the differential duty under the impugned order. The learned Counsel contended at the outset that the impugned order is based on test reports of the Chief Chemist of the Central Research Control Laboratory (CRCL), New Delhi and that of the Deputy Chief Chemist, Customs House, Madras and the Chief Chemist instead of merely analysing and giving an analytical data of the composition of the goods in question has given an opinion that the goods would merit classification as Commercial Glucose coming within the mischief of the expression Other Sugars classifiable under the Tariff heading 1702.19. Even though in the impugned order the adjudicating authority would say that he decided the issue independently, the opinion of the Chemical Examiners has prejudiced the mind of the adjudicating authority and therefore the order is bad in law. It was further submitted that in spite of a specific request by the petitioners to cross-examin the Chief Chemist he was not made av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of the goods in question and the adjudicating authority has made it clear that he is not influenced in any way by the opinion of the Chief Chemist though he has gone out of his bounds in giving an opinion on the classification of the goods in question. The Board s circular is statutory in nature and is binding on the departmental officials and it would be operative retrospectively as well. 4. We have considered the submissions made before us. After hearing the parties in extenso on the Stay Petition, since we find that the impugned order, by the denial of the right of cross-examination to the appellant of the Chief Chemist would be violative of the principles of natural justice, we are inclined to think that the matter will have to be remanded and in this view of the matter we grant waiver of pre-deposit of duty and dispose of the appeal itself today. 5. The learned Collector (Appeals) in the impugned order has observed as under : ......In order to appreciate the relevance of Tariff Entry on the subject goods, one has to necessarily base the classification on the chemical parameters as given in the HSN read with ISI, and the confirmation by the Chief Chemist, the Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial glucose which means that both will fall under Chapter Heading 1702.19. As per HSN, commercial glucose is obtained by hydrolysing starch with acids and/or enzymes. He being an expert in the field has also given an additional information that the samples also satisfy the composition for liquid glucose as per IS 873/1974. These factual information are all that has been relied upon for issuing the Show Cause Notice to finalise the provisional assessment. The Chief Chemist s opinion was not called for regarding the tariff classification of the product and, therefore, if the Chief Chemist on his own gives the opinion regarding the tariff classification, that per se will not vitiate the entire chemical test report. .... The chemical examination report also confirms that the product is mainly composed of reducing sugars and water and that they are free from added flavouring and colouring matter. For a product to be considered as a preparation of other sugars, it should have some flavouring or chemical additives, but this product being composed only of reducing sugar and water can be regarded as commercial glucose falling under Chapter Heading 1702.19. These are sufficient evidence to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expert has held as under : ....... The report of the CLRI cannot be taken as a conclusive piece of evidence when the same is challenged and sought to be disproved in cross-examination because the expert, however competent he might be cannot claim infalliability. Unless there is express provision in law about the conclusiveness of the report of the expert, one cannot presume the report of the expert as conclusive. The expert opinion is only a relevant piece of evidence and it is ultimately for the Quasi judicial authorities to adjudge the correctness of the same by application of their mind having regard to the facts and circumstances of each case. 5. In the case of domestic inquiry by the employers for taking disciplinary action against their employees in the area of labour-management relations, and also in disciplinary proceedings initiated by the Government against Civil Servants or by a Statutory Corporation against its employees the right of cross-examination has been regarded as an essential content of natural justice. It is an elementary principle that person who is required to answer charge must know not only the accusation but also its testimony on which the accusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace reliance against the appellant, on the opinion of the expert body. Such a course apart from being violative of principles of natural justice, is not, permissible in law. Therefore, without expressing any opinion on the merits of the issue, on technical grounds, we hold that the impugned order appealed against is violative of principles of natural justice and cannot be sustained. Since already the matter has been remanded once we do not think it would be just and proper to remand the matter once over in the context of the case. We are, therefore, constrained to set aside the impugned order in the above circumstances. We accordingly set aside the impugned order appealed against and allow the appeal. 7. We also direct that copy of the judgment be marked to the Ministry of Finance as well as the Administrative Ministry so that such issues which are likely to crop up in Customs adjudication could be considered and suitable instructions issued." ln our view, in fairness, the plea of the appellants to cross-examine the Chief Chemist should have been allowed and also the plea for re-testing of the samples should have been acceded to. So far as the Board s circular is concerned, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party. The Collector of Central Excise (Appeals), New Delhi in the case of M/s. Bharat Steel and Chemicals in his Order-in-Appeal No. 914-CE/DLH/91, dated 29-8-1991 dealing with an identical issue has observed as under : I find that the contest is between Tariff sub-heading 1702.30 as claimed by the appellants and 1702.19 as held by the Astt. Collector. The Tariff Heading 17.02 reads as under : Other sugars, including chemically pure lactos, maltos, glucose and fructose in any form and preparations thereof; sugar syrups not containing added flavouring or colouring matter; artificial honey whether or not mixed with natural honey; caramel . Out of this main heading, three sub-headings have been carved out. The first one reads other sugars, including chemically pure lactos, maltos, glucose and fructose in any form . The Tariff Heading 1702.19 falls under this sub-heading. The second sub-heading is not relevant for the present purpose and hence is not reproduced. The third sub-heading is sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel . The Tariff sub-heading 1702.30 falls under this categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading Sugar Syrup . For the purpose of clarity and precision I quote the relevant portion of this Explanatory Note which has been overlooked by the Asstt. Collector. This part covers syrups of all sugars (including lactos syrups and aqueous solutions other than aqueous solutions of a chemically pure sugars of heading 29.40), provided they do not contain added flavouring or colouring matter (see Explanatory Note 21.06). In addition to the syrups referred to in Part (A) above [i.e., glucose (starch) syrup, fructose syrup, syrup of maltodextrins, inverted sugar syrup as well as sucrose syrup], this heading includes : From this it is clear that what the Asstt. Collector has quoted is not the full coverage of the expression sugar syrups as given in the said Explanatory Notes and it includes not only those quoted by the Asstt. Collector but also syrups referred in Part (A) namely, glucose (Starch) syrups, fructose syrups, syrups of maltodextrins, invert sugar as well as sucrose syrup. This contention of the Asstt. Collector is therefore also not sustainable in law and on facts. The same argument applies to the product, namely, maltodextrins syrup which is the other item involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e similar privilege or right to the appellants. This aspect of the matter will be borne in mind by the authorities while reconsidering the issue in the light of our observations above. The appeal stands remanded in the above terms. Sd/- (S. Kalyanam) Dated : 15-2-1994 Member (J) 7. [Contra per : V.P. Gulati, Member (T.)]. - I have given a careful thought to the order recorded by my learned Brother and I am not able to agree with him that the impugned order has to be set aside at this interlocutory stage of hearing for the reason that there has been violation of principles of natural justice inasmuch as cross-examination of the Chief Chemist has not been allowed and also for the reason that in another Collectorate on appeal the appellants plea in that case for assessment of the goods under Tariff Heading 1702.30 as pleaded in this case has been allowed. I observe that the learned lower authorities in the present case have given very reasoned findings. Prima facie there is no infirmity in the reasoning of the lower authorities. I observe that the assessments in the appellants case for the relevant period were made on provisional basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty has taken note of the fact that no doubt, the Chief Chemist has gone beyond the query raised to him inasmuch as he has given his view on the classification matter and has clearly stated that the decision of the original authority was based on the merits of the Chemical composition and the interpretation of the tariff by the lower authority. It is pertinent to note that the appellants have not in any way contested the percentage of the Dextrose and other physical characteristics given in the chemical examination report. It was put to the learned Counsel as to whether the appellants had contested before the lower authority this percentage, he fairly conceded that the results of the Chemical test as such were not contested. It is also seen that the appellants on their own have also not given the chemical composition and the physical characteristics according to them. Therefore, when the lower authority has gone by the chemical test and which has not been contested and examined the matter as to the classification on his analysis of the tariff, refusal of the learned lower authority to allow cross-examination of the Chief Chemist cannot be said to have prima facie prejudiced the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her sugars, including chemically pure lactose, maltose, glucose and fructose in any form: 1702.11 : : xxxx 1702.19 : : Other Preparations of other sugars: 1702.21 : : xxxx 1702.29 : : xxxx 1702.30 : : Sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel. It is seen that this tariff heading figures under Chapter 17 and Tariff Heading 17.01 covers Cane or beet sugar and chemically pure sucrose, in solid form. Heading 17.02 has two broad headings: (i) `other sugars, including chemically pure lactose, maltose, glucose and fructose in any form ; and (ii) preparations thereof; sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with, caramel . Under the first heading there are two sub-divisions i.e. 1702.11-Palmyra sugar and 1702.19-Others and under the second part are Headings 1702.21, 1702.29, 1702.30. The learned lower authorities have taken note of the fact that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated loss of over Rs. 4.00 crores. From their un-audited provisional balance-sheet for the year ending 30-9-1993, it is seen that during the six months ending 30-9-1993 the applicants are in a better position compared to the previous six months. The expenditure shows reduction over previous six months. However, interest liability is more than what was in the previous six months. The applicants have not produced a complete balance sheet to show the position of sundry debtors and what their current assets comprise of and also what is their term liability of 26 crores relating to. These are significant points required to be shown. The applicants have not made any provision for taxation as seen from the provisional un-audited financial position when their assessments were provisional. It is also seen that the applicants Unit has been promoted by M/s. Glaxo and also Karnataka State Industrial Development Corporation. The applicants are thus a unit promoted by well established financially sound Organisations. It is also seen that the applicants have shown depreciation of over Rs. 2.36 crores in 1991-92 and over Rs. 2.47 crores in 1992-93. Taking into account the details in regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (V.P. Gulati) Dated : 16-3-1994 Member (J) Member(T) 11. [Order per : K. Sankararaman, Member (T)]. - The points of difference in this case between learned Member (J)/Vice President and learned Member (T) have been referred to me for the purpose of resolving the difference. The view taken by learned Member (J)/Vice President is that in the facts and circumstances of the case pre-deposit of duty demanded in terms of the impugned order should be dispensed with and the matter remanded to the original authority. While coming to this conclusion the learned Member (J)/Vice President has taken into consideration the aspect of denial of principles of natural justice since cross-examination of the Chemical Examiner was not allowed. Further, Collector (Appeals) in another Collectorate has classified the similar goods in the manner claimed by the petitioner/appellant under Tariff Heading 1702.30. On the contrary, the learned Member (Technical) held that there was no denial of principles of natural justice since the test results had not been contested as such and the learned lower authority had gone by the test result and also on his own interpretation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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