TaxTMI 
TaxTMI 
2007 (6) TMI 341
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....ty confirmed the demand and also imposed penalty. 3. The learned Advocate appearing for the applicant submits that they have been from the beginning challenging the tests conducted by the CRCL and were requesting the authorities to send the sample for testing to IIT or NITARA. It is the submission of the advocate that the tests conducted by the CRCL is not based on any standard methods but only on visual inspection. He submits that the revenue in another case of a different importer has sent the sample of identical imports for analysis to IIT and given benefit to that assessee. He submits that they on their own got the customs sealed sample analysed from IIT and the test results are in variance with the test report of the CRCL. 4. The learned DR on the other hand submits that the Joint Director of the CRCL has categorically stated that the repeated tests on the sample had indicated that the imported goods were of textured multifilament yarn and has been correctly classified. It is his further submission that the visual inspection of the imported goods is the correct method as has been confirmed by the Joint Director of the CRCL. It is his submission that the test re....
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.... report given in Jan. 2006 the same chemist carried out the test or some other. (A) The same chemist. (Q) Has he adopted any different method this time or another method which he used last time? (A) Same method. Further Cross-examination of Shri R.B. Saxena, Assistant Chemical Examiner was conducted by Dr. Badri Prasad, Consultant on 7-4-2006 and the relevant portion is reproduced as under : (Q) Have you done initial testing of the samples relating to Bill of Entry Nos. 2597 and 2905? (A) I had supervised the testing. (Q) What method of testing for determination of texturisation has been used? (A) Visual examination. (Q) Have you arrived at the conclusion given in your test report that samples under reference are crimped i.e. wavy nature? (A) Yarns have clear crimps and have permanent waves in nature. (Q) How could you determine that crimp's wavy nature of permanent or temporary? (A) On releasing t....
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...."(Q) The HSN sub-heading 5402 describes the physical properties and characteristics of the yarns in general. It does not describe if any, test method, for the distortions introduced such as crimps etc. For determination of the crimps etc. standard methods for test have been laid down. What standard method test have you followed to conclude that yarns removed from the fabric or textured yarn. (A) Such fabrics called as textured are non-standard product as their preparation varies from requirement to requirement and the nature of twisting untwisting false twisting compression, ruffling, heat, setting, which introduced curls, crimps, loops depends on the type of fabric required. This is the reason that till date no standard writing institution all over the globe have published and test procedure for texturised or non-texturised fabric whereas for in house quality control of the material which manufacturer produces, various tests are required like bulkiness of the textured fabrics crimp percentage which are already well documented procedure in ASTM IS and may be in other specification of other institutions etc. and these tests has no relation with that requir....
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....g the yarn may form away appearance or crimps but weaving may not alter the orientation of filaments which are very important in case of textured yarn and under my observations during the testing it has been observed that filaments of yarn were entangled at regular intervals and it was difficult to separate them from each other which clearly shows that a physical modification of yarn was made before weaving and crimps which the yarns of the samples had were not from the weaving but due to physical or mechanical process. (Q) How it could be ensured and what observations have you recorded. The report submitted by you does not show any observations in this respect. (A) It is incorrect. Neither learned Consultant nor department has till now requisitioned my finding, therefore, whatever he has concluded is incorrect. Further there is no standard scientific procedure published to differentiate textured yarns from non-textured filament yarns." 8. It is also curious to note that there is difference of opinion as regards the existence of the standard test method to ascertain whether the fabric is made out of textured yarn or not. The person ....
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....ation is made of 100% non-textured warp and weft polyester yarns. 9. It can be noticed from the report of the IIT that the sample sent by the applicant had customs seal No 159, which is not disputed by the lower authorities. This would indicate that the applicant had sent the sample as drawn by the Customs authorities to IIT for tests. The above reproduced test result of IIT indicate that the sample was tested applying the standard tests as per ASTM, and the result indicate that the fabric is made of non-textured yarns. It is noticed that the CRCL authorities despite having knowledge of standard test method being in existence for testing the textured nature of the yarn, thought it fit not to use the same, whilst the testing carried out by the IIT, indicate the standard methods having been used. 10. Hon'ble Supreme Court in the case of Quinn India Ltd. [2006 (198) E.L.T. 326 (S.C.)] has held that: "Test Report of the Chemical Examiner and Chief Chemist of the Revenue unless demonstrated to be erroneous, cannot be lightly brushed aside." 11. In this case the applicant has brought on record that the tests conducted at CRCL, is flawed due to the fact that the....
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....lly and nationally recognized in order to remain at the forefront on the scientific and technological developments and share its experience with them. In this backdrop, asking highly qualified professor of IIT to test a small piece of textiles so as to determine whether or not it is untexturised (which can be so easily tested) would be a waste of his talent and abilities." 13. The reasoning adopted by the adjudicating authority for rejecting the test report of IIT seems to be queer. On one hand the deposition of the CRCL Asstt. Chemical Examiner brings out that they have not applied standard testing methods while the adjudicating authority is insisting that the report of CRCL as gospel. It would be difficult to legally sustain the findings on the face of directly contradictory test result from IIT, that too after testing the sample by standard testing methods. To contradict the test report of IIT the revenue has not produced any other test report of another technical expert. The Hon'ble High Court of Gujarat in this regard has laid down the law in the case of Inter Continental (India) v. Union of India as reported at 2003 (154) E.L.T. 37 (Guj.). We may read the relevant por....
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.... accepted the test result and allowed the goods to be cleared as fabrics made out of non-textured yarn. When pointed out by the applicant about the same, the adjudicating authority has dismissed the plea as under : "I also find that the defense Counsel has also argued that in many cases, the Department itself had sent the samples for testing at IIT and denying same in their case was violation of principles of natural justice. I find from the perusal of the records that in respect of clearance of import consignments pertaining to M/s. Kirti Sales Corporation under B/E No. 95 dated 10-1-2005 and No. 113 dated 11-1-2005, the same were cleared on the basis of reports from IIT. I find from the perusal of the relevant records that the consignments were subjected to live test by IIT due to exigency on the part of the concerned importer (as the CRCL testing was taking more time) and subsequently cleared on the basis of reports received from IIT on the very next day. However, in the present proceedings, the consignments have already been provisionally released after execution of test bond by the noticee party." 17. It is a well-settled law that in taxation matters there has to be....
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....ple is a small cut piece of black woven fabric, in the construction of each textured multi filament yarns of polyester have been used along both sides." 24. On receipt of the above retest report, the importer wanted the sample got re-tested at IIT, Delhi, and not at CRCL. In the meanwhile, on the ground that the importer had mis-declared the goods by showing them as "non-textured", a show cause notice was issued to them on 13-5-2005 which inter alia sought to classify the goods under Chapter Heading 5407.5290 demanding the differential duty of Rs. 33,59,027/-. In respect of another Bill of Entry (No. 2905), similar action was proposed and the differential duty of Rs. 25,22,151/- was inter alia demanded. Corrigendums to the above show cause notices were also issued on 2-9-2005 to the appellant. 25. It is interesting to note in Para 10 of the impugned order that the Department allowed testing for the third time by CRCL at the request of the appellant without even making any reference to previous testing by CRCL in order to avoid any kind of prejudice on their part (Test memo dated 19-12-2005 refers). 26. The test report dated 20-1-2006 in respect of two sample....
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.... "12. These orders are now under challenge before this Court. We were referred to a number of test reports obtained by the appellant from various persons and on the basis of these opinion, the reports of the Departmental Chemical Examiner and also the Chief Chemist were assailed. We are of the view that the Assistant Collector cannot be said to have erred in relying upon the reports given by the Chemical Examiner and the Chief Chemist. It may be that in a given case, the report of the Chief Chemist may be demonstrated to be palpably wrong. In such a case, the Court may direct re-examination of the whole issue. But that is not the case here. It has not been shown that the Chemical Examiner or the Chief Chemist were in error in their analysis in any way. The views expressed by the Chief Examiner and Chief Chemist of the Government cannot be lightly brushed aside on the basis of opinion of some private persons obtained by the appellant."                          (Emphasis Supplied) 31. Further, while entertaining very similar grounds in Stay Applic....