(1.) Heard. THIS appeal is at the instance of the revenue. It was admitted by this Court vide order dated 9th June, 2005 on the following substantial questions of law:
(2.) The officers of the Directorate of Revenue Intelligence, Mumbai ("dri" for short) were in receipt of an information indicating that certain importers were misusing Customs Notification No. ll/97-Cus dated 1st march, 1997 inasmuch as goods incapable of being used as "insole Sheets" in Leather industry were being cleared at concessional rate of duty under the said notification after availing exemption benefit. Pursuant to the said intelligence report, the officers of dri intercepted certain consignments of "nylon Tricot Flocking Fabrics", imported at Mumbai Port, and drew amples and forwarded it to the Central Leather Research Institute, Adayar, Chennai for testing and soliciting their opinion. The said institute vide its letter dated 30th December, 1997 opined that the Nylon Tricot flocking Fabric material could not be used as Insole or Insole Sheet material in manufacture of shoes.
(3.) On another reference made by the dri officers, a technical opinion dated 29th november, 1996 was received by them from the Indian Institute of Leather Products, chennai, inter alia, stating that "nylon Tricot Flocking Fabrics" is not used as Insole in footwear making.