Tariff classification hinges on conclusive test reports; an inconclusive departmental report could not displace the declared classification.

Imported yarn classification under the tariff depended on expert test reports: a categorical NITRA report stated the goods were not chenille yarn, while the CRCL report was inconclusive and did not definitively support the departmental case. The conclusive report supporting the declared classification could not be displaced by an equivocal report, so classification as chenille yarn under heading 5606 was not sustained. On that basis, rejection and enhancement of the declared transaction value also lacked foundation, and the reassessment order was upheld against the Revenue.

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Issues: Whether the imported yarn was classifiable as other multiple folded or cabled artificial yarn under heading 5403 or as chenille yarn under heading 5606, and whether the declared transaction value could be rejected and enhanced on the basis of the alleged chenille classification.

Analysis: The classification dispute turned on the test reports. The report of NITRA categorically stated that the yarn was not chenille yarn, whereas the CRCL report was inconclusive and did not record a definite finding that the goods were chenille yarn. In such a situation, the conclusive report supporting the assessee's declared classification could not be displaced by an equivocal report. The preference claimed for the departmental report was not accepted, and there was no sufficient basis to reject the declared value merely by treating the goods as chenille yarn.

Conclusion: The goods were not shown to be chenille yarn, and the classification under heading 5606 was not sustainable; the Revenue's challenge to the appellate order failed.

Final Conclusion: The order in appeal setting aside the reassessment was upheld, and the Revenue's appeal was dismissed.

Ratio Decidendi: For tariff classification based on expert testing, a categorical and reasoned test report cannot be displaced by an inconclusive report, and classification enhanced on that basis is unsustainable.

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