Judgment:
1. This is an appeal filed by M/s. Vestergaard Frandsen India (P) Ltd. on the ground that the goods imported by them vide Bill of Entry (No.153011 dated 18.11.01 and 152929 dated 3.11.01) were Netting fabrics and therefore, rightly classified under 6002.43 and not under 58.04 as determined by the departmental authorities. Both these tariff entries are reproduced for convenience: 60.02 Other knitted or crocheted fabrics 6002.10 -Of a width not exceeding 30cm, containing by weight 5% or more of elastomeric yarn or rubber thread 6002.20 -Other, of a width not exceeding 30 cm 6002.30 -Of a width exceeding 30 cm, containing by weight 5% or more of elastomeric yarn or rubber thread" -Other fabrics, warp knit (including those made on galloon knitting machines): _______________________________________________________________________ 58.04 Tulles and other net fabrics, not including woven, knitted or crocheted fabrics; lace in the piece, in strips or in motifs, other than fabrics of Heading No. 60.02 2. From the order in original passed by the Assistant Commissioner of Customs, it is apparent that the goods were declared as "Netting fabric" in one bill of entry and as knitted fabrics in another bill of entry. When the matter was referred to CRCL, New Delhi, by the departmental authorities in respect of one bill of entry, the reference was made, inter alia to ascertain whether the sample was netted fabrics. In respect of other reference no such specific requirement relating to structure of fabric whether the sample was knitted or otherwise was made. In the result, the Chemical examiners report obtained was silent whether the sample was knitted or otherwise.
However, the report obtained from the Chemical examiner bears a new terminology i.e. 'netted fabrics' which does not appear to exist over any tariff or in trade nomenclature. In the eventuality, the learned Asstt. Commissioner in his order in original has accepted this terminology and concluded that the material was classifiable under 5804.10 as netted fabrics other than knitted or woven fabrics.
3. Aggrieved by the said decision when the appellants approached the Commissioner (Appeals), he observed as follows: It is seen that Chapter 58 relates to special woven fabrics, tufted textile fabric etc. and chapter 60 is for knitted or crocheted fabrics. It is observed that certain special woven fabrics, irrespective of the nature of fibres have been specifically mentioned in Chapter 58 and therefore, they merit to be classified accordingly on the principle that a specific provision of law would prevail over the general one. Tariff entry 5804 excludes woven knitted or crocheted fabrics. Therefore, the appellant's contention that the impugned netting fabrics being knitted in nature would fall outside the purview of CTH 5804 appears logical. But considering the principle of harmonious construction, the scope of a specific entry for net fabric should prevail over the general entry in chapter 60 which covers all type of knitted or crocheted fabrics.
It is further noticed that the Tribunal in the case of Mehta Netting (P) Ltd. 1990 (50) ELT 316 has already settled the classification of net fabrics and has held that net fabrics is appropriately classifiable under CTH 5804. It was only on the basis of this decision that Madhya Pradesh Collectorate had issued a trade notice No. 77/91 dated 28.8.91 and had clarified that such mosquito netting fabrics was appropriately classifiable under 58.04 of CETH 1985.
Further, contrary to the contention of the appellant, it is observed that the Supreme Court, Mobile deciding impugned products; rather they were addressing the issue of Rule 96 MMM of Central Excise Rules, 1944. Therefore, it is erroneous to say that the classification determined by the Cegat of netting fabrics has been set aside by the Supreme Court.
4. During the arguments, the learned advocate for the appellant has pointed out the lacuna in the chemical examiner's report by saying that the new terminology namely "netted fabric" appears vague as no such nomenclature exists either in trade parlance nor in the tariff. Even the learned Commissioner (Appeals), according to him, had erred in concluding that for the sake of harmonious construction even if it is a "knitted fabrics", the item could be considered for classification under 5804 despite the excluded provision thereunder.
5. The learned Departmental Representative relied upon the manufacturers invoice which clearly states that the description of the goods is "netting fabrics". He points out that nowhere in the invoice, there is mention of the goods being knitted fabrics nor on any packing list. He also points out that nowhere it is mentioned that there are two different type of fabrics. The appellants themselves have not declared that item imported is a knitted fabrics. As such, the technical opinion report placed on record by the appellant from Northern India Textile Research Association cannot be acceptable mainly since the samples forwarded by the appellant cannot be identified with the consignment imported. He also relied upon the fact that the appellants have obtained no dependable clarification from the exporters relating to exact nature of the goods.
6. However, the learned advocate states that the onus for disapproving the classification sought for by the importer lies on the department particularly in view of the ratio of the decision of Hon'ble Supreme Court in Hindustan Ferodo Ltd. v. Collector reported in 1997 (89) ELT 16 (SC). Para 3 of the said judgment reads as follows: 3. It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged.
Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed.
7. The learned SDR also recalls the post import made by the appellant and the decision of this Tribunal in Vestegard Frandsen (I) Pvt. Ltd. v. CC upheld by the Hon'ble Supreme Court. According to him there is no requirement of testing each and every consignment if there is steady sequence of supply for an established importer from such exporters According to the learned advocate for the appellant such generalization cannot be made as each consignment has to be considered for the type of goods which are actually imported.
8. We have heard both sides. Prima facie we agree that the chemical examiner's report on whose basis the department has classified the goods appears to be rather vague. Instead of ascertaining whether the sample is "knitted fabric" or not, the chemical examiner has said that fabric is "netted". In view of this, solely depending upon this report for arriving at the conclusion on classification appears rather a hasty decision. Thus, the evidence relied upon by the Department is rather fragile and inconclusive. It rather appears to us presumptive at this stage to go back to a decision which was taken in respect of some other consignment to decide the fate of the present consignment. As the Chemical examiner's report is inconclusive and vague, we allow the appeal by way of remand to the original adjudicating authority so that the remnant samples are got retested for a clear report by CRCL. The adjudicating authority would also examine denovo affording full opportunity to the appellants before passing a final order on classification of the goods imported by the appellants. We, therefore, allow the appeal by way of remand. The impugned order of the Commissioner (Appeals) is therefore, set aside.