Tariff classification of nylon lining turned on proof of coating, with exemption upheld and confiscation rejected.

Imported nylon lining material was held not to be a coated fabric because the invoice, chemical report and technical opinion did not establish a coating of the kind required by the tariff. Water-repellant treatment was treated as distinct from water-proofing, and in the absence of proof of coating composition the goods fell under Tariff Item 22(i)(b) as lining material and qualified for exemption. On the import-control issue, a correction in the bill of lading was accepted as a bona fide mistake, the goods were covered by a valid import licence, and the basis for confiscation failed; the confiscation order was therefore unsustainable and relief followed.

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Issues: (i) Whether the imported nylon lining materials were correctly classified as coated fabrics or fell under Tariff Item 22(i)(b) for the purpose of duty and exemption. (ii) Whether the import was unauthorised and liable to confiscation under the Customs and Imports and Exports (Control) law.

Issue (i): Whether the imported nylon lining materials were correctly classified as coated fabrics or fell under Tariff Item 22(i)(b) for the purpose of duty and exemption.

Analysis: The invoice reference to dyeing and coating was held not decisive on the question of coated fabric classification. The chemical examiner's report stated that the material was not a coated fabric but a fabric possessing water-repellant property. Water-repellant treatment was distinguished from water-proofing, and neither the test report nor the technical opinion established that the goods were water-proofed or coated with preparations of cellulose derivatives or other artificial plastic materials. In the absence of proof of the composition of any coating, the goods could not be brought under Tariff Item 22(3). The material therefore answered the description of lining material under Tariff Item 22(i)(b) and was eligible for the exemption applicable to that item.

Conclusion: The goods were correctly classifiable under Tariff Item 22(i)(b) and not as coated fabrics, and the benefit of exemption was available to the assessee.

Issue (ii): Whether the import was unauthorised and liable to confiscation under the Customs and Imports and Exports (Control) law.

Analysis: The correction in the bill of lading was accepted as a genuine and bona fide mistake supported by the insurance policy describing the goods as lining materials. Since the goods were held to be lining materials covered by a valid import licence, the foundation for treating the import as unauthorised did not survive. The reliance placed on extraneous material obtained behind the appellant's back was also found impermissible.

Conclusion: The import was held to be valid and the confiscation was not sustainable.

Final Conclusion: The impugned order was set aside, the appeal succeeded, and the assessee obtained consequential relief.

Ratio Decidendi: A fabric cannot be classified as a coated fabric unless the coating and its legally relevant composition are established by reliable evidence; water-repellant treatment is not the same as a coated fabric, and absent such proof the goods must be classified according to their proven description and entitlement to exemption.

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