SHREE GANESH INTERNATIONAL Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) In these two appeals, filed by M/s. Shree Ganesh International against two separate Orders -in -Originals, the common issues involved are whether the polyester fabrics imported by them is classifiable under sub -heading 5407 61 90 of the First Schedule to the Customs Tariff Act, as declared by them on Bills of Entry or under sub -heading 5407 69 00 and whether the importers are eligible to get the goods cleared without payment of duty against Duty Free Replenishment Certificate (DFRC).

(2.) Shri K.K. Anand, learned Advocate mentioned that the Appellants imported two consignments of Polyester Fabrics from M/s. Shaoxing Weifing Weaving Printing and Dyeing Co. Ltd. and M/s. Shaoxing Tialong Import and Export Ltd., China respectively; that they had ordered for import of polyester fabrics and in the test Certificates it was clearly mentioned that the impugned goods were non -texturised fabrics; that the Commissioner of Customs, under both the impugned Orders has classified the impugned goods under sub -heading 5407 69 00 of the Customs Tariff as texturised fabrics on the basis of Test Reports received from Textile Committee, Mumbai and CRCL, New Delhi; that the Commissioner has also disallowed their request to allow clearances of the goods against DFRCs on the ground that DFRCs produced by them are not having complete details about the quality, technical characters and specifications of the inputs used in the export goods. The learned Advocate submitted that the test reports relied upon by the Department are of doubtful nature because in all the three tests reports there is a wide variation; that Textile Committee had opined that the constituent yarn as 100% texturised yarn whereas the first CRCL Report opined that the yarn contained texturised multifilament yarn of 63.2% and retest report stated that it contained textured filament yarn to the extent of 62%; that there cannot be such wide variation amongst the three samples when they were drawn from the same consignment; that on the other hand, the supplier had given the test Certificate wherein it has been clearly certified that the fabrics contained non -texturised yarn; that there is no allegation in the show cause notice that Certificates given by the suppliers are incorrect; that the suppliers who had sent the consignment is the best person to know the composition of his product; that thus their declarations that the goods are made of non -texturised yarn is perfectly valid and should be accepted.

(3.) The learned Advocate further submitted that there was no intentional mis -classification of the goods by the Appellants; that they had earlier imported polyester fabrics and the same was assessed as containing non -texturised yarn; that the present Bills of Entry were also filed on the same lines; that the polyester fabrics from its look cannot be distinguished and the nature of constituent yarn could not be ascertained as such; that they had no way to know that the goods have yarn which is less than 85% non -texturised yarn; that it was only on testing conducted by the laboratories that the same could be revealed; that even the results of tests conducted by the Textile Committee and CRCL are widely different which goes to show that when the result of Government Laboratories could vary by such a large extent, then a normal business man definitely cannot tell the quantum of texture in fabrics simply by the look or feel of the fabric; that Shri S.K. Garg, authorised signatory of the Appellants, in his statement, has deposed that he has no technical knowledge regarding quality and composition of the fabric; that there is no material on record to show that the Appellants had intentionally misdeclared the composition of the goods and, therefore, wrongly, classified the goods; that they were under the bona fide impression that the impugned consignments are identical to the one they had imported earlier from the same supplier in which test report of the Department had confirmed the non -texturised content; that they had filed the Bills of Entry on the basis of documents received from the suppliers. The learned Advocate relied upon the udgment in the case of Northern Plastic Ltd. v. CC and CE, 1998 (101) E.L.T. 549 (S.C.) = 1998 (27) RLT 556 (S.C.) wherein the Apex Court has held that it cannot be claimed that "by claiming benefit of exemption under notifications which really did not apply to the imported goods, the Appellant had intentionally tried to evade proper payment of customs duty" and that the declaration made on the basis of the belief entertained by the appellant "cannot be said to be a misdeclaration contemplated by Section 111(m) of the Customs Act." Reliance has also been placed on the following decisions : (i) Jay Kay Exports v. C.C. (Port), Calcutta, 2003 (161) E.L.T. 443 (T) (ii) Jay Kay Exports & Industries v. C.C. (Port), Kolkata, 2004 (163) E.L.T. 359 (T) wherein the Tribunal has held that the finalisation of the Tariff Heading under which the goods would fall is the ultimate job of the Customs authorities and if the Appellants have claimed wrong classification according to his understanding, mens rea cannot be attributed on his part.