Final classification order and inadequate test reports cannot sustain fresh demand on alleged fibre waste.

An earlier classification order treating undrawn waste and cut and process waste as waste had attained finality after factory inspection and final RT-12 assessments. Later reopening on the basis of the same test reports failed because those reports did not establish the critical tariff criterion for synthetic staple fibre, namely generally uniform fibre length, and merely described the samples as polyester staple fibre or within a stated length range. The Board's circular was therefore misapplied, and the record was insufficient to displace the earlier finding, especially where the goods were under physical control. The demand and penalty were unsustainable.

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Issues: Whether the demand on cut and process waste could be sustained when an earlier classification order had attained finality and the test reports did not establish that the goods were synthetic staple fibre rather than waste.

Analysis: The earlier adjudication, passed after inspection of the factory, had treated undrawn waste and cut and process waste as waste under the tariff and the related RT-12 assessments were finalised accordingly. In the later proceedings, the same old test reports were relied upon to reopen the matter, but those reports only stated that the samples were composed of polyester staple fibre or that the fibre length fell within the range mentioned in the Board's circular. They did not address the crucial criterion indicated by the circular, namely whether the fibres were generally of uniform length, which would distinguish staple fibre from waste. The Board's directions were therefore misapplied, and the material on record was insufficient to displace the earlier finding, particularly when the goods were under physical control.

Conclusion: The demand and penalty could not be sustained, and the appeal succeeded.

Ratio Decidendi: Where an earlier classification order has attained finality and departmental evidence does not satisfy the tariff criteria for treating the goods as excisable fibre rather than waste, a fresh demand based on the same inadequate test reports is unsustainable.

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