AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 450
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....oms (Appeals), Mumbai-I in appellate proceedings arising from two separate disputes, that converge on congruity of facts and circumstances and within the same window of test, assessment and retest, are the jurisdictional Commissioner of Customs (Import) and M/s Janta Trading Co. Inevitably, the submissions have been all about the primacy of one over the other and, not unreasonably, motivated by self-interest. The victim of this jousting is the law which has been relegated to the spectator lists. The context is, therefore, of vital concern necessitating elaboration, albeit briefly. 2. M/s Suri Exports (P) Ltd and M/s Janta Trading Co imported three consignments [bill of entry no. 903/21.07.03, 1198/21.07.03 and 1199/29.07.03] and one consignment [bill of entry no. 384604/26.08.03] respectively of goods declared as 'non-texturized polyester fabric' and sought classification against tariff item 5407 6190 of First Schedule to Customs Tariff Act, 1975 claiming duty liability of 25% from notification no. 36/2003-Cus dated 1st March 2003 (at serial no. 51) in bills of entry filed in July and August 2003 which were cleared upon report of the Textile Committee on the representative samples....
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..../646/CSTM/2007 dated 30th November 2007 ] , remanded back to the original authority for fresh determination of proposals in the notice after furnishing copy of test report of Central Revenue Control Laboratory (CRCL), opinion of Joint Director, Central Revenue Control Laboratory (CRCL) relied upon in its order and letter of Textile Committee of 19th July 2005. Further adjudication thereto was hindered by lingering correspondence on material yet to be furnished in pursuance of the remand order. The proceedings concluded with order of 30th December 2008 confirming the demand once again which, having been upheld by the impugned order, is now before us. 5. Thus, the dispute, remanded to the original authority by the Tribunal for remedying the deficiency in relied upon evidence furnished to the importers, is back with the contention of Revenue on the primacy of test reports returned by Central Revenue Control Laboratory (CRCL) and of the other side insisting upon the inappropriateness of later testing that, in their contention, lacks validity. The proceedings before the lower authorities were disposed off on that solitary aspect even though, in the order of the Tribunal on the earlier ....
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....e nature of the yarn used in production of the imported fabric. 8. Professedly, the controversy is about the description corresponding to the tariff item in First Schedule to Customs Tariff Act, 1975 that is most proximate to the impugned goods. The reality, however, does not give the impression of such punctiliousness: the genesis of the dispute, the course of the proceedings and the leap in the conclusions manifests the obsession with - understandable enough in business but not among administrators of tax law - the rates on the 'right hand side' which is all about the alternatives of duty at 25% ad valorem rate or at specific rate of Rs. 24 per square metre - a dispute that, conceivably, ceases to be, assuming standard width of fabric, when assessable value is Rs. 105 per metre. That sums up the contour of the controversy: tax policy determining fitment in the tariff schedule instead of being fitted around the tariff schedule with law relegated to dismissible irrelevance. The malady needs, not palliative care but, putative cure lest the damage overwhelms the whole. 9. On behalf of the importers, Learned Counsel argued that clearances were effected on the finding of conformity o....
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....this clash over test reports that is at the core of this dispute. It would appear that, for some reason, imported 'textile fabrics' was being cleared after testing by Textile Committee but, owing to intelligence reports of 'polyester fabric' being imported by misdeclration, past clearances of imports effected between January 2003 and August 2003 were subjected to scrutiny by testing of remnant sample in the New Custom House laboratory of Central Revenue Chemical Laboratory (CRCL). The consequent controversy came to a head when, after Directorate General of Foreign Trade (DGFT) issued notification no. 29/(RE-2004)/2002-2007 dated 28th January 2004 requiring imported textiles / textile articles not accompanied by pre-shipment certificate from notified agencies to be subjected to test by notified agencies in India, complaints of delay owing to multiple testing prompted Central Board of Excise & Customs (CBEC) to direct, by circular no.23/2004-Cus dated 15th March 2004, that such consignments as were to be tested for 'azo dyes' for which Directorate General of Foreign Trade (DGFT) had nominated Textiles Committee as the notified agency for the purpose of their notification supra wo....
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....ice of the Tribunal which followed the decision of the Hon'ble High Court of Calcutta in Tapan Kumar Biswas v. Union of India [1996 (63) ECR 546] and in Debu Saha v. Collector of Customs [1990 (48) ELT 302 (T)]. In re Tapan Kumar Biswas, the issue was limited to the scope of section 124 of Customs Act, 1962 and in re Debu Saha, the issue pertained to crossexamination of co-noticee. In re Jagdish Shanker Trivedi, the Tribunal was not only considering statements recorded under section 108 of Customs Act, 1962 and the non-availment of several opportunities afforded for cross-examination but also relied upon the decision of the Hon'ble Supreme Court in re Kanungo & Co which dealt with proceedings under Sea Customs Act, 1872 in a seizure of October 1959 that did not provide for cross-examination; indeed, even Customs Act, 1962 incorporated 'relevancy of statements' subject to examination in section 138B only from September 1973. Hence, the decisions rendered without referring to this provision offer no assistance in the dispute before us. Per contra, reliance placed by Learned Counsel upon the decisions of the Hon'ble High Court of Bombay in Kellog India Pvt Ltd v. Union of India [2007 ....
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....75 and, owing to goods not being 'upholstery fabric', saddled with the higher rate in the tariff. The notification sought to be applied by customs authorities covers all goods conforming to the description corresponding to tariff item 5407 7200. Hence, though the lower authorities have decided on fitment for the one or the other of the effective rates of duty and from the contents of the contested test reports, it can be seen that the presence of 'texturised yarn' in the imported fabric may, if at all, be relevant only to the primary classification for determination of 'rate of duty' mandated by section 12 of Customs Act, 1962. 15. More to the point, therefore, is the implicit, as it turns out, resolution of disputed classification within chapter 54 of First Schedule to Customs Tariff Act, 1975, intended for 'man-made filaments; strip and the like of man-made textile materials', by reliance on the test report. Surprisingly, the adjudicating authority had, not two but, three possible tariff items to choose from and that is in breach of the General Rules for the Interpretation of Import Tariff which permits alternative to claimed classification subject to compliance with stipulation....
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....ments of organic polymers produced by manufacturing processes either (a) by polymerisation of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethane, or by chemical modification of polymers produced by this process...; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produce polymers such as cellulose acetate or alginates.' in note 1 in chapter 54 of First Schedule to Customs Tariff Act, 1975 enables us to deduce that 'man-made fabric' are either 'synthetic' or 'artificial', depending upon origin, from 'organic monomers' or from 'natural organic polymers' and process of 'polymerisation' or of 'dissolution/chemical treatment' respectively. The scheme of the chapter, after enumerating yarns - synthetic and artificial - till heading 5406, moves on to woven fabric - from synthetic and from artificial - in the remaining two headings. Within the heading for woven fabric made from synthetic yar....