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2016 (3) TMI 511 - CESTAT NEW DELHI

2016 (3) TMI 511 - CESTAT NEW DELHI - 2016 (337) E.L.T. 93 (Tri. - Del.) - Validity of opinion - No opportunity for cross examination - Appellant contended that experts opinions should not be relied upon as their cross-examination was not permitted - Held that:- there may be situations where it is felt that fair hearing would make no difference-meaning that a hearing would not change the ultimate conclusion reached by the decision-maker in such situations, fair procedures appear to serve no purp .....

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void. The validity of the order has to be decided on the touchstone of prejudice. There is no doubt that there can be a situation whether denial of cross-examination of expert may not cause any prejudice and in such case not allowing cross-examination would not vitiate the proceedings. However, in the present case it is eminently arguable that not allowing cross examination of the experts has caused prejudice to the appellant as their opinion was relied upon to negate the appellant's plea/conte .....

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ted artificial fur lining of the same quality, character and technical specifications (except colour) under all the bills of entry. Further the examination of samples drawn from a number of consignments imported under various bills of entry supported the said statement of the authorised representative. Therefore there is no requirement of drawing the samples from each and every consignment imported under each and every bill of entry. - Classification - Whether HSN Explanatory Notes for Chap .....

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particular animal. That however is not of any consequence because even if the impugned goods looked liked some fur, by virtue of the HSN notes cited earlier and the analysis, because of the fact that nylon flocks had the length between 0.45 mm to 0.5 mm, the impugned goods do not get excluded from the scope of chapter heading 59.07. Therefore, to exclude the goods from the scope of 59.07 the flocks have to be of length 5 mm or longer and the goods should have the character of artificial fur. .....

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SCN No. VIII (ICD) 6/BE/110153/96 dated 23.11.1996 and ₹ 1,68,34,435/- as per SCN No. VIII(ICD) 6/10047/SCN dated 5.12.96. Having regard to the liability of the impugned goods totally valued at ₹ 11,93,805/- CIF covered by the first SCN and valued at ₹ 3,08,74,405/- CIF covered by the second SCN under Section 111(d) and 111(m) of the Customs Act, 1962 and in view of the fact that those goods are not available for confiscation having been provisionally released, I impose a pena .....

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authority vide order-in-original dated 30.5.1997 held the goods to be classifiable under 43.04 as claimed by the appellant and dropped the demand. Revenue went in appeal and CESTAT vide order dated 20.2.2001 allowed Revenues appeal by way of remand as under : 16. We, therefore consider that this matter needs to go back to the jurisdictional Commissioner of Customs for de novo consideration in the light of our above discussion. We, therefore, remand this matter to the jurisdictional Commissioner .....

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d, I confirm the demand of duty to the tune of ₹ 92,179,54 as per SCN No. VIII (ICD) 6/BE/110153/96 dated 23.11.1996 and ₹ 1,68,34,435/- as per SCN No. VIII(ICD) 6/10047/SCN dated 5.12.96. Having regard to the liability of the impugned goods totally valued at ₹ 11,93,805/- CIF covered by the first SCN and valued at ₹ 3,08,74,405/- CIF covered by the second SCN under Section 111(d) and 111(m) of the Customs Act, 1962 and in view of the fact that those goods are not availab .....

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ons : We are constrained to send back the matter to the Jurisdictional Authority with the direction to adjudicate the matter afresh in the light of the observations in the terms of remand contained in the said Final Order No. 62-63/2001-D which reads as under : We, therefore, consider that this matter needs to go back to the jurisdictional Commissioner of Customs for de novo consideration in the light of our above discussion. We, therefore, remand this matter to the jurisdictional Commissioner o .....

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n has been determined on the basis of report of IIT, Delhi, SASMIRA and NITRA. No opportunity for cross examination of Shri P.K. Hari of IIT, Delhi, Dr. R. Sarkar of SASMIRA and Shri S.S. Satsangi of NITRA was afforded and therefore their opinion cannot be relied upon. It cited several judgements in support of the said proposition : (ii) Initially IIT, Delhi gave opinion in favour of the appellant and it was only when Revenue wrote a detailed letter to IIT that the opinion was changed and theref .....

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as been held by several judgements which were cited. 5. Ld. DR, on the other hand, stated that the Commissioner in the impugned order has analysed the issue of classification and has come to a clear finding that by virtue of the fact that the length of flock was ranging between 0.45 to 0.50 mm, such goods could not be classifiable under Heading 43.04 as artificial fur lining. He strenuously referred to the chapter headings 59.07, 56.01 and 43.04 and relied upon HSN Explanatory Notes to contend t .....

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and its evidentiary value has to be ascertained by permitting his cross-examination. In the case of Dharampal Sataypal Ltd. Vs. CCE - 2015 (87) SCC 519 (SC), Supreme Court has summed up to the issue essentially holding that there may be situations where it is felt that fair hearing would make no difference-meaning that a hearing would not change the ultimate conclusion reached by the decision-maker in such situations, fair procedures appear to serve no purpose since the right result can be secur .....

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rder has to be decided on the touchstone of prejudice. The Honble Supreme Court in para 40 of the said judgement observed as under : 40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the Courts. Even if it is found by the Court that there is a violation of principles of natural justice, the Courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision aft .....

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be a situation whether denial of cross-examination of expert may not cause any prejudice and in such case not allowing cross-examination would not vitiate the proceedings. However, in the present case it is eminently arguable that not allowing cross examination of the experts has caused prejudice to the appellant as their opinion was relied upon to negate the appellants plea/contention and therefore the least that follows is that as the cross examination of the experts who gave their opinions w .....

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no sage during the proceedings it disputed that the average flock length was not ranging between 0.45 to 0.50 mm or claimed that it was more than 5 mm. As a matter of fact, in the reply to the show cause notice (in para 20) the appellant claimed that the minimum of length of fur is nowhere laid down in the chapter notes of Chapter 43 of Customs Tariff. Therefore the department s contention by cross reference to some length referred to in sub heading 56.01 has no relevance . Not only that, even .....

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pertaining to 59.07; as per note (G) under that chapter it is stated as under: (G) Fabric, the surface of which is coated with glue (rubber glue or other) plastics, rubber or other materials and sprinkled with a fine layer of other material such as:- (1) Textile flock or dust to produce imitation suedes (fabrics produced in a similar manner with longer textile fibres are excluded if they have the character of artificial fur of heading 43.04). Fabrics covered with textile flock or dust to produc .....

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om the shearing of velvets. It is also produced by cutting textile tow or fibres. Textile dust is obtained as waste, or by grinding textile fibres to a powder. Textile flock and dust fall in this heading even if bleached or dyed or if the fibres having been artificially curled. These products are used for a wide variety of purposes (e.g. for blending with other fibres and spinning into yarns, for making imitation suedes, for coating or decorating wallpaper, as a basis for face powder or -make up .....

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imed that the impugned goods looked like fur of any particular animal. That however is not of any consequence because even if the impugned goods looked liked some fur, by virtue of the HSN notes cited earlier and the analysis above, because of the fact that nylon flocks had the length between 0.45 mm to 0.5 mm, the impugned goods do not get excluded from the scope of chapter heading 59.07. We may repeat that to exclude the goods from the scope of 59.07 (i) the flocks have to be of length 5 mm or .....

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e judgement in the case of Puma Ayurvedic Herbal Pvt. Ltd. Vs. CCE - 2006 (196) ELT 3 (SC) was cited to support the proposition that the burden of showing correct classification lies on Revenue and the expert s opinion has no relevance for determining classification of products as the role of chief chemist is only to supply analytical data. In the case of HPL Chemicals Ltd. Vs. CCE, Chandigarh - 2006 (197) ELT 324 (SC), Supreme Court reiterated that if department needs to classify goods under a .....

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. As stated earlier, the classification has been determined on the basis of the length of the flock fibres being between 0.45 limited to 0.5 mm which was never contested and on the basis of the HSN Explanatory Notes on classification which are standard and internationally accepted for the purpose of determining the classification of goods. Thus, Revenue has discharged its burden of proof while determining the classification. 10. As regard the contention of the appellant that when the samples hav .....

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