Tariff classification burden of proof: Revenue failed to justify higher-duty reclassification of yarn on the evidence relied upon.

In a tariff classification dispute, the Revenue was required to prove that the yarn answered the ingredients of the proposed higher-duty heading. Test reports describing the samples as fibrous mass and non-cellulosic polyester waste did not establish manufacture from man-made fibre in the manner required for the higher classification, and the later sample report was treated as irrelevant to the disputed period. The existing approved lower classification was therefore not displaced on the facts proved, and the duty demand based on reclassification was stated to be unsustainable.

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Issues: Whether the yarn cleared by the assessee was correctly classifiable under Cellulosic Spun Yarn and whether the demand raised on the basis of reclassification as a higher-duty heading was sustainable.

Analysis: The classification dispute turned on the actual composition of the goods and the effect of the test reports relied upon by the Revenue. The reports described the samples as fibrous mass and referred to non-cellulosic polyester waste, but they did not establish that the yarn was manufactured from man-made fibre in the manner required for the higher-duty classification. The evidence also did not displace the original approved classification under the lower heading, and the report relating to the later sample was held irrelevant to the disputed period. In a classification matter, the burden remained on the Revenue to prove the correctness of the proposed higher classification, and that burden was not discharged on the facts proved.

Conclusion: The higher-duty classification was not established and the duty demand was unsustainable.

Final Conclusion: The assessee succeeded on the classification dispute, the duty demand was set aside, and the appeal was allowed with consequential relief.

Ratio Decidendi: In a tariff classification dispute, the Revenue must prove by relevant evidence that the goods answer the ingredients of the higher classification, and a sample described only as fibrous mass or waste does not by itself establish classification under a heading requiring manufacture from man-made fibre.

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