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2023 (5) TMI 450 - AT - CustomsClassification of imported goods - non-texturized polyester fabric - to be classified under tariff item 5407 6190 of First Schedule to Customs Tariff Act, 1975 or not - applicability of N/N. 36/2003-Cus dated 1st March 2003 - subsequent testing, with varying result, by the Central Revenue Control Laboratory (CRCL) - ‘guided’ revisit of assessment - denial of cross-examination - proper tests as regards samples of impugned goods contained less than 85% by weight of polyester yarn, not performed - HELD THAT:- The noticees had sought cross-examination of the authors of the subsequent test reports and denial thereof had been considered by the first appellate authority to have compromised the case of customs authorities against M/s Suri Exports (P) Ltd; M/s Janta Trading is also aggrieved about denial of cross-examination of these technical experts. To dispose off the argument of Learned Authorized Representative that the first appellate authority had erred in not deferring to scientific knowledge, there is much to be said for authentic and authoritative source being employed in judicial decision-making but, nonetheless, the judicial organ erected by the Constitution would be in jeopardy if that proposition is accepted in absolute terms - We cannot subscribe to such a position as all judgements may, if not stemming from such expertise, be said to be lacking in credibility. That is clearly overreach on the part of Learned Authorized Representative. Reliance placed on the decision of the Tribunal in re Fortune Impex may not be assistance as there is no record of section 138B of Customs Act, 1962 having been brought to the notice of the Tribunal which followed the decision of the Hon’ble High Court of Calcutta in TAPAN KUMAR BISWAS VERSUS UNION OF INDIA (UOI) AND ORS [1995 (7) TMI 429 - CALCUTTA HIGH COURT] and in DEBU SAHA VERSUS COLLECTOR OF CUSTOMS [1990 (2) TMI 184 - CEGAT, CALCUTTA]. In re Tapan Kumar Biswas, the issue was limited to the scope of section 124 of Customs Act, 1962 and in re Debu Saha, the issue pertained to crossexamination of co-noticee - In re Jagdish Shanker Trivedi, the Tribunal was not only considering statements recorded under section 108 of Customs Act, 1962 and the non-availment of several opportunities afforded for cross-examination but also relied upon the decision of the Hon’ble Supreme Court in KANUNGO & CO. VERSUS COLLECTOR OF CUSTOMS, CALCUTTA AND OTHERS [1972 (2) TMI 35 - SUPREME COURT] which dealt with proceedings under Sea Customs Act, 1872 in a seizure of October 1959 that did not provide for cross-examination; indeed, even Customs Act, 1962 incorporated ‘relevancy of statements’ subject to examination in section 138B only from September 1973. It is common ground that no test method existed, as standard, for ascertainment of ‘textured yarn’ in fabric and that a methodology had been devised by Joint Director, Central Revenue Control Laboratory (CRCL) along with two members of the Textile Committee. In these circumstances, cross-examination would appear to have been intended for placing on record the technical competence of the progenitors of the new testing parameters as expertise in one or, even several branches of science, does not necessarily imply expertise in ascertainment of composition of fabric. More to the point, therefore, is the implicit, as it turns out, resolution of disputed classification within chapter 54 of First Schedule to Customs Tariff Act, 1975, intended for ‘man-made filaments; strip and the like of man-made textile materials’, by reliance on the test report. Surprisingly, the adjudicating authority had, not two but, three possible tariff items to choose from and that is in breach of the General Rules for the Interpretation of Import Tariff which permits alternative to claimed classification subject to compliance with stipulations therein - There is no dispute at the heading level as both sides did not seek to foray beyond ‘WOVEN FABRICS OF SYNTHETIC FILAMENT YARN, INCLUDING WOVEN FABRICS OBTAINED FROM MATERIALS OF HEADING 5404’ corresponding to heading 5407 in First Schedule to Customs Tariff Act, 1975. It is at the next subordinate level that the divergence occurs between sub-heading 5407 61 and sub-heading 5407 72 of First Schedule to Customs Tariff Act, 1975 and which, in accordance with the decisions of the Hon’ble Supreme Court, places onus on customs authorities to defend the appropriateness of the latter before evaluating comparative precedence between the two. It is apparent from the classification adopted by the customs authorities that preference been accorded to the generality of fabric woven from synthetic filaments over the more specific composition of textured polyester filaments even though the reference to the testing authorities was ascertainment of the presence of texturised yarn in the impugned fabric. The declaration of goods as polyester fabric has not been controverted. Woven fabrics containing less than 85% by weight of textured polyester yarn and woven fabrics containing more than, as well as less than, 85% by weight of non-textured polyester yarn are covered with sub-heading 5407 61 of First Schedule to Customs Tariff Act, 1975; by no stretch can a later sub-heading be adopted for ‘woven fabrics from polyester’, except on composition less than 85%, without compromising the General Rules for the Interpretation of Import Tariff in Customs Tariff Act, 1975. In the absence of finding, or even proposal, that samples of impugned goods contained less than 85% by weight of polyester yarn, the sub-heading adopted for re-classification does not meet the test of decisions of the Hon’ble Supreme Court in HPL CHEMICALS LTD. VERSUS CCE, CHANDIGARH [2006 (4) TMI 1 - SUPREME COURT] where it was held that If the Department intends to classify the goods under a particular heading or sub- heading different from that claim by the assessee, the Department has to produce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue. The classification declared in the bills of entry, along with claim for effective rate according to the relevant notification, of both importers, stands unchallenged. Appeal of Revenue dismissed.
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