Evidentiary support for duty demand is essential when challenging grading and valuation of polyurethane foam.

A duty demand based on alleged lower-grade classification of polyurethane foam was not sustained because the record lacked material evidence contradicting the assessee's grading and valuation. The goods were shown as cut into different sizes and shapes, and part of the production was treated as second- and third-grade stock sold at lower prices. In the absence of supporting evidence that the grading was artificial or that the goods were sold at a higher value, the demand was set aside and the impugned order was annulled.

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Issues: Whether the duty demand was sustainable when the alleged lower-grade classification of polyurethane foam was not supported by evidence.

Analysis: The goods were shown to be cut into different sizes and shapes, and part of the production was treated as second and third grade and sold at lower prices. The record did not disclose material evidence to show that the grading was done or that the goods were sold at a higher price. In the absence of supporting evidence, the demand could not be sustained.

Conclusion: The demand was set aside and the appeal was allowed in favour of the assessee.

Final Conclusion: The impugned order was annulled for lack of evidentiary basis, and the assessee obtained consequential relief.

Ratio Decidendi: A fiscal demand cannot be upheld without material evidence contradicting the assessee's grading and valuation of the goods.

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