Tariff classification of woven fabrics followed CRCL test findings, supporting exemption eligibility under the customs notification.

Woven fabrics were classified by reference to the CRCL test report, which found non-textured polyester multifilament yarns and no visible separable layer, film, or coating. On that basis, the goods were held classifiable under Heading 5407 61 90 rather than Heading 5407 69 00, and the contrary Textiles Committee view was not accepted. That classification result also supported entitlement to Notification No. 14/2005-Cus., as amended, since the goods satisfied the applicable conditions. Duty, redemption fine, and penalty were left to be re-quantified and re-determined by the adjudicating authority in accordance with law.

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Issues: (i) Whether the impugned woven fabrics were classifiable under Heading 5407 61 90 or Heading 5407 69 00 of the Customs Tariff Act, 1975 on the basis of the CRCL test report; (ii) Whether the appellant was entitled to the benefit of Notification No. 14/2005-Cus. as amended.

Issue (i): Whether the impugned woven fabrics were classifiable under Heading 5407 61 90 or Heading 5407 69 00 of the Customs Tariff Act, 1975 on the basis of the CRCL test report.

Analysis: The dispute turned on the proper classification of the fabrics by reference to the chemical and textile test findings. The CRCL report showed that the base woven fabric consisted of non-textured polyester multifilament yarns, with no separable layer, film, or coating visible to the naked eye, and the goods answered the description of woven fabrics containing 85% or more by weight of non-textured polyester filaments. The Tribunal applied the CRCL report as the governing test for classification and rejected reliance on the contrary view taken on the Textiles Committee report.

Conclusion: The goods were held classifiable under Heading 5407 61 90, in favour of the assessee.

Issue (ii): Whether the appellant was entitled to the benefit of Notification No. 14/2005-Cus. as amended.

Analysis: The exemption benefit depended on the classification outcome and the condition that the goods were other than upholstery. Since the goods were found to fall under the claimed heading and the adjudicating authority had already granted the corresponding notification benefit in the order, the Tribunal accepted the appellant's entitlement to the notification relief.

Conclusion: The appellant was held entitled to the benefit of the notification, in favour of the assessee.

Final Conclusion: The appeal succeeded on classification and notification benefit, while duty, redemption fine, and penalty were left to be re-quantified and re-determined by the adjudicating authority in accordance with law.

Ratio Decidendi: Where a remand direction requires classification to be determined on the basis of a particular test report, that report must govern the re-determination unless displaced by a legally sustainable basis; classification under the correct tariff heading then determines entitlement to the related exemption benefit.

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