Classification based on late-supplied test evidence requires fresh adjudication; maltodextrin demand failed, maltodex was remitted.

Maltodextrin was held not to justify the demand, because the record did not support misdeclaration and the assessee's classification under Chapter 29 was supported by the certificate relied upon for the relevant period; the demand was therefore set aside. Maltodex, however, could not be finally classified on the existing record because the chemical test report was furnished only after the hearing, denying effective rebuttal. The connected issues of duty, valuation, marketability and Modvat credit were also not properly examined and were remitted for de novo adjudication after full opportunity to meet the evidence.

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Issues: (i) Whether maltodextrin was correctly classified and whether the demand raised on it could be sustained on the basis of the record. (ii) Whether maltodex was correctly classified and whether the consequential duty, valuation and related objections required fresh adjudication.

Issue (i): Whether maltodextrin was correctly classified and whether the demand raised on it could be sustained on the basis of the record.

Analysis: The product was treated by the department as commercial glucose, but the record showed that the certificate and classification list referred to maltodextrin-BPC and not to a different suppressed product. The finding of misdeclaration was not supported on the available material. The classification under Chapter 29 was consistent with the certificate relied upon by the assessee for the relevant period. The demand for the earlier period also could not survive once the basis of suppression was not established and the classification adopted by the assessee was found supportable.

Conclusion: The demand on maltodextrin was not sustainable and was set aside.

Issue (ii): Whether maltodex was correctly classified and whether the consequential duty, valuation and related objections required fresh adjudication.

Analysis: The classification of maltodex rested substantially on a chemical test report supplied to the assessee after the hearing had concluded. The assessee had no effective opportunity to meet that material. Since the product was treated as identical or substantially similar to maltodextrin by the technical evidence on record, the issue of classification could not be concluded on the present record. The connected questions of short levy, valuation, marketability and Modvat credit also had not been properly examined and required reconsideration by the adjudicating authority after giving full opportunity of rebuttal.

Conclusion: The classification of maltodex and the consequential duty demand were remitted for de novo decision by the jurisdictional Commissioner.

Final Conclusion: The assessee succeeded on the demand relating to maltodextrin, while the controversy concerning maltodex and the connected fiscal issues was sent back for fresh adjudication.

Ratio Decidendi: A demand or classification finding cannot be sustained where it relies on material supplied to the assessee too late for an effective rebuttal, and the assessee must be given a fair opportunity to meet the evidence before adverse fiscal consequences are confirmed.

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