Excluding tariff note under Chapter 59 supported prima facie classification of flock printed fabrics and stay of recovery.

Flock printed fabrics were examined for prima facie classification under Heading 59.07 in light of Note 5(c) to Chapter 59. The Tribunal found that the Commissioner had not properly considered the applicability of Note 5, and the material before it indicated that the fabrics were covered by the excluding note. On that prima facie basis, the goods were not treated as falling under Heading 59.07 for the purpose of interim relief, and waiver of pre-deposit of duty and penalty was granted with recovery stayed pending appeal.

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Issues: Whether the goods described as flock printed fabrics were prima facie classifiable under Heading 59.07, and whether, on that footing, waiver of pre-deposit and stay of recovery should be granted.

Analysis: The dispute turned on the effect of Note 5(c) to Chapter 59. The applicants contended that the fabrics, having designs produced by the flocking process, were excluded from Heading 59.07. The Tribunal found, prima facie, that the Commissioner had not properly examined the applicability of Note 5 to the fabrics, and that the material placed before it indicated that the goods were covered by Note 5(c). On that prima facie view, the goods could not fall under Heading 59.07 for the present purpose.

Conclusion: The applicants were granted waiver of pre-deposit of duty and penalty and recovery was stayed pending the appeal.

Ratio Decidendi: Where the material shows a prima facie case that the goods fall within an excluding note to the tariff chapter, pre-deposit of duty and penalty may be waived and recovery stayed pending appeal.

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