Prima facie technical evidence justified waiver of pre-deposit where visual laboratory testing was disputed in a fabric classification case.

In a classification dispute over whether imported fabric was textured or non-textured, interim stay was justified because the departmental laboratory opinion, tested in cross-examination, was shown to rest on visual inspection rather than recognised ASTM methods. The importer produced an independent IIT report using standard test methods, which supported the claim that the goods were made of non-textured polyester yarn. As the Revenue produced no contrary expert evidence to rebut that technical report, the importer established a strong prima facie case for waiver of pre-deposit of duty and penalty, and recovery remained stayed pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit of duty and penalty should be granted in a classification dispute where the Customs laboratory relied on visual inspection while the importer produced an independent laboratory test based on standard methods.

Analysis: The dispute turned on whether the imported fabric was textured or non-textured. The Customs laboratory reports were supported by cross-examination of the chemical examiner, which disclosed that the testing was based on visual examination and not on the standard ASTM methods. The importer produced an IIT report based on recognized test methods, which concluded that the goods were made of non-textured polyester yarn. In the absence of any contrary expert report from the Revenue to displace the IIT opinion, and in view of the divergence in the laboratory approach, the importer established a strong prima facie case for interim relief.

Conclusion: Waiver of pre-deposit was warranted and recovery of duty and penalty was to remain stayed pending disposal of the appeal.

Final Conclusion: The interim relief was granted on a prima facie assessment that the importer's independent technical evidence outweighed the Revenue's visually based laboratory conclusion at the stay stage.

Ratio Decidendi: Where a departmental laboratory opinion is shown, on cross-examination, to rest on non-standard visual inspection and the assessee produces a contrary technical report based on recognized test methods, interim relief may be granted for waiver of pre-deposit in the absence of any rebutting expert evidence from the Revenue.

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