Prima facie case on textile classification supported waiver of pre-deposit against duty and penalty demand.

The appellant established a strong prima facie case for waiver of pre-deposit in a classification dispute concerning imported fabric treated by revenue as textured multifilament yarn fabric. The testing report was weakened because the Chemical Examiner admitted that the sample had been tested only under general laboratory conditions, not under conditioned temperature, humidity or pressure, and the procedure indicated in the HSN Explanatory Notes for determining textile properties was not followed. In light of that evidentiary deficiency and the supporting material produced by the appellant, duty and penalty pre-deposit was waived for hearing of the appeal.

---

---

Issues: Whether, for purposes of waiver of pre-deposit, the appellant had made out a prima facie case against the demand of differential duty and penalty arising from the classification of imported fabric as textured multifilament yarn fabric.

Analysis: The testing report relied upon by the revenue indicated that the fabric was composed of textured multifilament yarn, but the Chemical Examiner admitted in cross-examination that the sample was tested in general laboratory conditions and not under conditioned temperature, humidity or pressure. The procedure indicated in the HSN Explanatory Notes for determining the physical and mechanical properties of textile material was not followed. In view of these circumstances, and the supporting material produced by the appellant, the appellant was found to have established a strong prima facie case.

Conclusion: The pre-deposit of duty and penalty was waived for hearing of the appeal.

---