2025 (12) TMI 718 - AT - Customs

Rectification plea over textile test reports rejected; customs retains quasi-judicial role in HS classification assessment

The CESTAT New Delhi dismissed the rectification of mistake application filed by the appellant. The appellant alleged that the Tribunal had misunderstood ... Rectification of mistake - mistake apparent on records or not - recording of wrong facts and coming to erroneous conclusion - Appellant contented that, the Tribunal has misunderstood that the subsequent reports given by the Textile Committee were based on the same samples which were already destroyed during the initial testing for the nature of fabric and the material content. - Non consideration of second test report. HELD THAT:- What is recorded in Final Order is what the test reports stated. RUD 23 included the test report dated 30.08.2016 and the additional test report dated 21.09.2016 in respect of the same sample sent by DRI under letter dated 06.07.2016. The submission of the learned special counsel that additional test report should be treated as having been given on the basis of given second set of samples sent by DRI under its letter dated 01.09.2016 cannot be accepted as it is contrary to what is recorded in the test report and the additional test report. The additional test report clearly states that the sample was received on 08.07.2016 and not on or after 01.09.2016 when, according to the learned special counsel, the second set of samples were sent. It cannot be said that the reports which were given by the Textile Committee are based on a second set of samples. An illustration will make this position clear beyond any shadow of doubt - Simply because DRI sent another set of samples on 01.09.2016, the report given by the Textile Committee which specifically states that the tests were performed on the sample received on 08.07.2016 cannot be taken as the reports of the sample sent on 01.09.2016. The subjective opinion of the experts of the Textile Committee regarding the correct HS classification of the imported goods is irrelevant and that the Adjudicating authority has to decide the classification based on the Customs Tariff and this view needs re-consideration - classification is a part of assessment which is a quasi-judicial function and which can be done only by the authorities empowered to do so, so that a remedy available to the aggrieved party. It cannot be done by an expert because there is no appeal against any opinion of an expert and the aggrieved party will be remediless. There are no mistake in the Final Order, let alone, a mistake apparent on record - The application for rectification of mistake is rejected. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the Tribunal had recorded incorrect or inaccurate facts regarding the Textile Committee's test reports and use of first and second sets of samples, amounting to a 'mistake apparent on record' justifying rectification. 1.2 Whether the Tribunal's view that classification is a quasi-judicial function of customs authorities and that the Textile Committee's opinion on HS classification is not determinative, constitutes a rectifiable 'mistake apparent on record.' 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Alleged factual mistakes regarding Textile Committee test reports and samples Interpretation and reasoning 2.1 The application asserted that the Tribunal, in paras 27-33 and 38 of the Final Order, wrongly assumed that the Textile Committee's subsequent reports on HS classification were based on samples already destroyed during initial testing, whereas they were allegedly based on a second set of samples sent later by DRI. 2.2 The Tribunal examined the test reports (including those enclosed as RUD 23) and noted that both the initial and 'additional' test reports for the relevant lab samples referred to the same DRI covering letter dated 06.07.2016 and recorded the date of receipt of samples as 08.07.2016. 2.3 The first reports stated that the samples were tested from 08.07.2016 to 30.08.2016, gave fibre composition, and recorded that HS classification could not be ascertained because the samples got 'de-shaped and destructed.' The additional reports, however, stated that the same samples were tested from 08.07.2016 to later dates (21.09.2016 / 06.10.2016) and gave opinions on HS codes, without mentioning receipt of any extra or second set of samples. 2.4 The Tribunal held that only the issuing laboratory can state which physical sample corresponds to which report; neither the Tribunal, nor the Revenue, nor the importer can re-assign a report to another alleged sample contrary to what is expressly recorded in the test report itself. 2.5 The mere fact that DRI sent another set of samples on 01.09.2016 could not, in law or on facts, justify treating the additional reports-expressly recording receipt on 08.07.2016-as relating to the 01.09.2016 samples. 2.6 By analogy to diagnostic laboratory practice, the Tribunal underscored that the identity and timing of the sample tested are determined from the face of the report; external assumptions cannot override the recorded dates and references in the test documents. 2.7 On this basis, the Tribunal found that its earlier observations questioning the credibility of the test reports, given the destruction of the samples yet later use of the same samples for HS classification, were precisely based on the language and data in the test reports and not on any misreading of the record. Conclusions 2.8 The Tribunal concluded that its factual findings in paras 27-33 of the Final Order faithfully reflected the contents of the Textile Committee's reports and were not incorrect or inaccurate. 2.9 No 'mistake apparent on record' was established regarding the factual appreciation of the test reports and the use of samples; rectification on this ground was rejected. Issue 2: Nature of HS classification and role of expert opinion as an alleged mistake apparent on record Legal framework (as discussed) 2.10 The Tribunal proceeded on the premise that classification forms part of assessment under customs law and is a quasi-judicial function entrusted to designated customs authorities, whose decisions are appealable. Interpretation and reasoning 2.11 The Revenue argued that para 38 of the Final Order, which treated the Textile Committee's expert opinion on HS classification as subjective and legally non-determinative, required reconsideration and constituted a mistake apparent on record. 2.12 The Tribunal held that its view on classification-namely, that HS classification is to be decided by the adjudicating authority on the basis of the Customs Tariff (including relevant explanatory materials), with expert opinions serving only as aids and not binding decisions-is an expression of the Tribunal's adjudicatory opinion. 2.13 The Tribunal noted that disagreement by the Revenue with this legal view cannot be equated with an error 'apparent from the record'; such disagreement, if any, must be pursued by way of appeal, not by rectification. 2.14 The Tribunal further reasoned that allowing experts to effectively decide classification would displace the quasi-judicial role of customs authorities and deprive the aggrieved party of an appealable decision, since there is no appeal against an expert's opinion. Conclusions 2.15 The Tribunal reaffirmed its earlier legal position that expert opinions on HS classification are not determinative; classification must be decided by the adjudicating authority as part of assessment. 2.16 The Tribunal held that its reasoning in paras 34-41 of the Final Order represents a considered legal view, not a clerical or manifest error, and therefore does not constitute a 'mistake apparent on record.' Overall Disposition 2.17 The Tribunal found no mistake, much less a mistake apparent on the face of the record, in its Final Order. The application for rectification of mistake filed by the Revenue was rejected.