ORDER
1. Heard both sides. The appellant filed these appeals against the common adjudication order passed by the Commissioner of Customs.
2. Brief facts of the case are that M/s. Sanjeev Woollen Mills the appellant made import of a consignment and declared the same as synthetic waste with predominance of acrylic staple fibre with wide variation in denier and length containing both drawn and undrawn fibres. The appellant claimed the clearance of the consignment without payment of duty under Notification No. 117/88-Cus. under Import Licence dated 29-9-89 which allows the import of synthetic waste having pre-dominance of acrylic staple fibre with wide variation in denier and length containing both drawn and undrawn fibres under the Import -Export Pass Book Scheme. The Customs authorities on examination found that the bales are having manufacturers, label showing the goods as Acrylic Staple Fibre of Commercial quantity Bright. The 48 samples were drawn and were sent for Chemical examination to M/s. Indian Petro Chemical Ltd. (IPCL), Baroda. The test result of the Chemical Examiner shows that the goods imported by the appellant is stable fibre. A SCN was issued to the appellant for confiscation of the imported goods on the ground of mis-declaration and for imposition of penalties on the importer as well as partners of the firm. The revenue also proposes to enhance the value of the imported goods treating as synthetic staple fibre. Thereafter addendum to SCN was issued alleging that there was manipulation in respect of the description of the goods in the Bill of Lading. The adjudicating authority held that the imported goods are synthetic staple fibre that the appellant mis-declared the goods, therefore, the goods were confiscation and penalties were imposed. The value was also enhanced after treating as prime quality staple fibre.
3. The contention of the appellant is that 48 samples were taken from the consignment and were sent for chemical examination to IPCL whereas the report of IPCL shows that only one sample was tested. The appellant pointed out that in the report dated 9-3-1990, it was specifically mentioned that it is in respect of sample No. 1, the appellant also pointed out that after issuance of SCN during adjudicating proceedings, the Commissioner of Customs again sent the samples to CRCL, Delhi and the report of CRCL, Delhi was not supplied to the appellant and without supplying the report, the same was relied upon the adjudicating authority in support of the allegation that goods are synthetic staple fibre. The appellant also relied upon the observation made by the Chemical Examiner in both the reports to show that goods in question are waste fibre. The contention is that in view of these reports, the goods in question cannot be held to be synthetic staple fibre. The appellant relied upon the HSN Explanatory notes and submits that under Chapter 55 the synthetic staple fibre are usually press-packed in bales. The fibres are generally of uniform length, which distinguishes them from the waste material. The contention is that the fibre imported by the appellant is not of uniform length, therefore, it is out of the scope of heading synthetic staple fibre and it will go under heading waste of man-made fabric. The contention of the appellant is also that they had specifically asked for cross-examination of the Chemical order denied the cross-examination of Chemical Examiner of CRCL on the ground that CRCL was not initially involved in testing of the samples, therefore, cross-examination of chemical examiner from CRCL is not necessary. In respect of the cross-examination of the Chemical Examiner of IPCL, the adjudicating authority held that the cross-examination is unnecessary. In these circumstances, the appellant contended that the findings in the impugned order that the goods imported by the appellants are not waste of man-made fibre, are not sustainable.
4. The contention of the revenue is that apart from report of the Chemical Examiner, there is ample evidence to show that after mis-declared the impugned goods, the contention is that during investigation which comes on record. It was found that the bales of the impugned goods are having the manufacturers’ labels whereby it was specifically mentioned that these are acrylic staple fibre commercial quality bright. It has also come on record that there was interpretation of the mis-declaration in the bill of lading. During investigation it has come on record that the description of the goods in the bill of lading was changed on the basis of instructions from the supplier of the goods, thereafter the bill of lading was changed in respect of description of the goods to suit the present importer so that he can clear the goods under the import licence. The description was changed by white fluid in the original writing and subsequently it was typed as synthetic waste/soft quality with predominance of acrylic staple fibre with wide variation so that the benefit of the exemption notification can be made by the appellant. The contention of revenue is also that 48 samples taken from the include goods sent to IPCL and all the samples were tested by the Chemical Examiner and detailed report was given and as per the opinion of Chemical Examiner, the goods were not staple fibre. The contention is that as the importer was contesting the Chemical Examiner of IPCL, the adjudicating authority sent the samples to CRCL, New Delhi and as per the report of CRCL, the goods were also of staple fibre. In these circumstances the contention is that apart from the reports of Chemical Examiner the manipulation in the bill of lading and the labels recovered from the consignments, the appellants misdeclared the goods with intent to evade payment of Customs duty, therefore, the impugned order is rightly passed. The contention of the revenue is also that the allegation regarding manipulation in the bill of lading was specifically made in the annendum. In reply to the SCN this allegation was not refiled by the importer. The contention is that in these circumstances the impugned order was rightly passed.
5. In this case the dispute is regarding the description of the goods imported by the appellant. The appellant described the goods as waste of man made fibre with predominance of acrylic staple fibre with wide variation in denier & length containing both drawn and undrawn fibres. The adjudicating authority held that these goods are acrylic staple fibre. Relying upon the stickers, labels recovered from the consignment on the basis of the reports of the Chemical Examiner that the documents recovered during the investigation which shows that there was change in the description of goods in the bill of lading.
6. The contention of the appellant is that 48 samples were taken from the impugned goods and were sent to the IPCL and the Chemical Examiner of IPCL only examined one sample. We have gone through the Chemical report given by the IPCL Chemical Examiner. No doubt in the subject it is mentioned that analysis of samples sent by DRI but in the beginning of report it is mentioned the testing of sample No. 1. The appellant asked for cross-examination of the Chemical Examiner which was denied. It is not clear from the report whether it is in respect of all the samples sent by revenue or in respect of one sample i.e. sample No. 1. Further we find that during proceedings, samples were sent to CRCL, New Delhi and this report was not supplied to the appellant and adjudicating authority relied upon in this test report given by CRCL first time in the impugned order.
7. The revenue no doubt relied upon the documents recovered during the investigation which shows that there are certain changes made in respect of description of goods but the issue before us is whether the goods imported by the appellants are staple fibre or waste man made fibres. The goods were chemically examined by IPCL as well as CRCL. Both reports are on record and copy of report by CRCL is not supplied to appellant. The cross-examination was denied by the adjudicating authority in respect of the chemical examination report by IPCL. As we discussed above the report of Chemical Examiner of IPCL is not clear whether it is in respect of one sample i.e. No. I or in respect of 48 samples sent to Chemical Examiner. The goods were again examined by CRCL during adjudicating proceedings and report which was not supplied to the appellant but the same was relied upon in the order. The revenue relied upon the decision of the Tribunal in the case of Hindustan Alloys Mfg. Co. Ltd. v. CC, Bombay to submit that denial of cross-examination of Chemical Examiner is not required as the Chemical Examiner only for giving the physical or chemical analysis of goods in dispute. In the present case we find that the appellants are also questioning whether the Chemical Examiner of IPCL examined one sample or 48 samples. It is necessary for cross-examination by the appellant that CRCL report is obtained by the Revenue during adjudication proceedings which was relied upon by the adjudicating authority. In these circumstances, the ratio of decision relied upon by revenue is not applicable on the facts of present case. In these circumstances, we find that it is a fit case for reconsideration by the adjudicating authority for affording an opportunity for cross-examining of Chemical Examiner i.e. IPCL and CRCL. The impugned order is set aside and the matter is sent back to decide afresh after affording an opportunity of cross-examination of Chemical Examiner and hearing to the appellants. The appeals are allowed by way of remand.
(Order dictated in the open Court)