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TMI Blog2025 (3) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellants- importer. Inasmuch as the imported goods have been examined by the jurisdictional customs authorities and after subjecting the imported goods for examination on first-check basis, that too after testing by the Textiles Committee Laboratory and on the basis of such test report, the imported goods had been cleared, there appears no ground or evidence for re-testing the same goods under the pretext of alleged mis-declaration of goods by some other person. The essential requirements of legal provisions of Section 28 of the Customs Act, 1962 such as service of notice of the basis on which the appellants-importer is being asked to pay the differential duty, reasonable opportunity to be given for enabling them to present their representation for due consideration before passing of the order, have not been carried out by the authorities below. This is evident from the fact that the original order does not even provide the re-test report; but it has gone in detail about the visit of Joint Director of CRCL to the Textiles Committee Laboratory to state that they did not follow the standard testing requirements, to doubt the test report given by them earlier in confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants-importer had paid the duty as assessed by the customs authorities and the imported goods were cleared out of Customs control. 2.2 Subsequent to such clearance, Directorate of Revenue Intelligence (DRI), Mumbai Zonal Unit had gathered certain intelligence which indicated that some persons are importing polyester fabrics which attract higher BCD, by mis-declaring its technical characteristics so as to show that these are Non-texturized Polyester yarn which attract lower BCD, thereby attempting to evade customs duty. On the above basis, DRI had taken up the remnant samples of the imported goods in the above case, for re-testing of the same by Central Revenue Control Laboratory of the New Custom House, Mumbai (CRCL). On the basis of CRCL test reports indicating that the imported fabrics were of dyed woven fabrics containing 85% or more by weight of Synthetic Filament Yarn, the DRI had come to a conclusion that the imported goods should have been correctly classified under CTI 5407 7200 and higher amount of customs duty at Rs.24 per square metre should have been paid in terms of Serial No.93 of Notification No.27/2003-Customs, resulting short payment of duty to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to defend their case properly. Hence, he pleaded that the impugned order is not legally sustainable. 3.3 In addition to the above, learned Advocate stated that such disputed issues were already addressed by the Tribunal and it was held that such demands are not sustainable. In support of their stand, learned Advocate had relied upon following decisions of the Tribunal in the respective cases mentioned below: (i) Shri Lakshmi Cotsyn Limited Vs. Commissioner of Customs & C.Ex. Kanpur - 2011 (263) E.L.T. 299 (Tri. - Del.) (ii) Commissioner of Customs, Mumbai Vs. Atlas Mercantile Pvt. Ltd. -2019 (366) E.L.T. 911 (Tri. - Mumbai) (iii) Smart Designer Vs. Commissioner of Customs (Import), Mumbai - 2019 (367) E.L.T. 299 (Tri. - Mumbai) (iv) Commissioner of Customs (Imports), Mumbai Vs. Ramchand Jashanmal Narwani - Final Order No.A/85857-85858/2019 dated 07.05.2019. 4. Learned Authorised Representative (AR) reiterated the findings made by the Commissioner of Customs (Appeals) in the impugned order and submitted that issue of classification of impugned goods, has been examined by the authorities below based on test reports. Thus, learned AR justified the action in the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration before passing of the order, have not been carried out by the authorities below. This is evident from the fact that the original order does not even provide the re-test report; but it has gone in detail about the visit of Joint Director of CRCL to the Textiles Committee Laboratory to state that they did not follow the standard testing requirements, to doubt the test report given by them earlier in confirmation of the imported goods as Non-texturized polyester yarn. Therefore, we are of the considered view that the confirmation of the duty demand under Section 28 ibid does not stand the scrutiny of law. 8.1 We find that in the case of Ramchand Jashanmal Narwani (supra) involving similar set of facts, the Co-ordinate Bench of the Tribunal has held that there is lack of any record to sustain the variation in test reports and dismissed the appeal filed by the department. The relevant paragraphs of the said order is quoted herein below: "6. We find that the goods had originally been cleared on the basis of the report of the Textile Committee without any objection. Though the original authority had relied upon a second report from the Textile Committee, as well as from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-textured yarn. We do not agree with the contentions of the learned Jt. CDR that the said notes prescribed any method for testing the samples for determining whether the yarn is textured or not. ..... 8.1 The Textile Committee is undisputedly a specialised agency. CRCL is like a general physician and that Textile Committee is like a kind of specialist on matters relating to textile and textile articles. That is why, in our considered opinion, the DGFT prescribed Textile Committee as the nominated agency for testing of textile and textile article for the presence of hazardous chemicals. Under these circumstances, the first report of the Textile Committee given by the Assistant Director cannot be easily brushed aside. The reasoning given by Shri Venkitachalam, Assistant Director during cross-examination that they were under misconception that mingled and tangled yarn cannot be textured and realised the mis-conception after visiting several texturised units looks rather strange. The report of the Director (Laboratory) forwarding the second test report refers to discussion with the Commissioners of Customs. It states that "earlier there was some ambiguity in method adopted for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended the benefit of doubt." 8.3 We further find that in an identical matter that came up before the Co- ordinate Bench of the Tribunal in the case of Smart Designer (supra), it was held that such report of re-testing by CRCL laboratory as opposed to Textiles Committee report is not acceptable, and the resultant re-classification of goods with consequential denial of benefit of notification is not proper in law. The relevant paragraph in the order passed by the Tribunal is extracted and given below: "6. Appellant had, as we find, 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. Furthermore, as made amply clear in the decisions of the Tribunal In Re : Atlas Mercantile Pvt. Ltd. and In Re : Shri Lakshmi Cotsyn Ltd., that as per Circular No. 23/2004-Cus., dated 15th March 2004, the expertise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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