Imported calcite powder classification dispute resolved in favor of importer after revenue's test report deemed unreliable due to inadequate laboratory facilities

CESTAT Ahmedabad allowed the appeal regarding classification of imported calcite powder. The dispute centered on whether the goods should be classified as natural calcite powder under CTH 25309030 (eligible for notification benefits) or precipitated calcium carbonate powder under CTH 28365000 (without notification benefits). The revenue relied on a test report from CRCL Kandla, but the laboratory admittedly lacked testing facilities for the specific product. Following precedent from Gaurav Lubricants Industries case, the Tribunal held that test reports from laboratories without proper testing facilities cannot be relied upon for classification decisions. The impugned order was set aside, accepting the appellant's classification claim.

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Issues Involved:
1. Classification of imported goods as natural Calcite Powder or precipitated Calcium Carbonate Powder.
2. Validity of the test report from CRCL, Kandla.
3. Compliance with High Court orders regarding the release of goods.

Summary:

1. Classification of Imported Goods:
The primary issue in this case is whether the imported goods should be classified as natural Calcite Powder under CTH 25309030, as claimed by the appellant, or as precipitated Calcium Carbonate Powder under CTH 28365000, with the denial of notification No. 46/2011-CUS, as contended by the revenue.

2. Validity of the Test Report from CRCL, Kandla:
The appellant argued that the CRCL, Kandla laboratory did not have the necessary facilities to test the goods in question, as per various board circulars and judgments. The appellant cited several judgments, including Asian Granito Vs. CC Mundra, Chem Plast Vs. Commissioner of Customs, and others, to support their claim that the issue is no longer res-integra. The tribunal noted that it is admitted that at the relevant time, CRCL, Kandla did not have the facilities to test Calcite Powder. The tribunal referred to previous judgments, including Gaurav Lubricants Industries Pvt. Ltd, which emphasized that test reports from laboratories lacking the necessary facilities cannot be relied upon for classification decisions.

3. Compliance with High Court Orders:
The appellant also submitted that the department violated the High Court's direction by not releasing the goods despite a specific order. The tribunal acknowledged the High Court's order, which directed the release of goods upon furnishing a bank guarantee. The tribunal noted that while it cannot give a direction regarding the High Court's order, the appellant is entitled to the release of goods based on the merits of the case.

Conclusion:
The tribunal concluded that since the CRCL, Kandla did not have the facilities to test Calcite Powder, the test report cannot be accepted. Consequently, the appellant's declaration regarding the nature, classification, and valuation of the goods was found to be correct. The impugned orders were set aside, and the appeals were allowed with consequential relief.

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