Native starch misdeclaration claim failed where expert test reports showed the goods remained native starch, defeating duty demand.

Revenue's allegation that the assessee cleared modified tapioca starch as native starch failed because the evidence did not prove actual conversion or misdeclaration. Buyer statements were not decisive, several were weakened in cross-examination, and the dispatch register was treated only as a marketing or appraisal record. The Tribunal relied on chemical test material, including expert reports from recognised institutions, which showed the samples to be native starch. In the absence of positive and tangible evidence that modified starch had been cleared under the guise of native starch, the duty demand could not be sustained, and the related interest, penalty and confiscation were also held unsustainable.

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Issues: Whether the assessee had cleared modified tapioca starch in the guise of native tapioca starch so as to justify the demand of duty, penalties and confiscation.

Analysis: The Tribunal held that the Revenue's case rested mainly on buyer statements, internal dispatch records, and assumptions drawn from pH, viscosity, sulphur-di-oxide usage and pricing, but these materials did not establish that the native starch was actually converted into modified starch. The buyers' statements were not decisive, several were shaken in cross-examination, and the dispatch register was found to be only a marketing or appraisal record. The decisive factor was the chemical test material, including expert test reports from recognised institutions, which showed the samples to be native starch. In the absence of positive and tangible evidence of conversion or of clearance of modified starch under the guise of native starch, the duty demand could not stand.

Conclusion: The allegation that the goods cleared were modified starch was not proved; the demand, interest, penalty and confiscation were unsustainable.

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