Classification of bleaching earth upheld where evidence of activation and misdeclaration was not established, defeating reclassification and demand.

Imported bleaching earth was held to remain classifiable under Chapter Heading 2508.20 because the department failed to produce cogent evidence, including test analysis, to show that it was an activated natural mineral product warranting Chapter Heading 3802.90. The Tribunal also accepted that the goods were declared as bleaching earth, similar goods had been classified under the declared heading, and misdeclaration or suppression was not established. It further noted delay and procedural unfairness, including non-supply of relevant test material before decision. On these findings, reclassification was not justified, the consequential demand and penalty could not be sustained, and the Revenue appeal was rejected.

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Issues: Whether the imported bleaching earth was correctly classified under Chapter Heading 2508.20 or was liable to reclassification under Chapter Heading 3802.90, and whether the consequential demand, penalty and reclassification order could be sustained.

Analysis: The Tribunal found no material to dislodge the first appellate authority's factual findings that the goods had been declared as bleaching earth, that no cogent evidence or test analysis had been produced to show that the product was an activated natural mineral product, and that similar goods had been classified under the declared heading. It also accepted the finding that the department had not established misdeclaration or suppression, and that the proceedings were vitiated by delay and by procedural unfairness in not supplying the relevant test material before deciding the case.

Conclusion: The reclassification was not justified, the demand could not be sustained, and the appeal filed by Revenue was rejected.

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