The Bangalore Bench of Customs, Excise andService Tax Appellate Tribunal ( CESTAT ) allowed relief to Malayala Manorama Company Limited by classifying imported paper in reels as “newsprint” under Customs Tariff Heading 480180, due to testing not being conducted as per International Organization Standardization (ISO).

Malayala Manorama Company Limited,appellant-assessee,imported 243.83 MTS of paper reels in May 1999, declaring them as standard “newsprint” under Customs Tariff Heading 480180. The goods were cleared provisionally, and samples were sent for testing. The test showed the Mechanical Wood Pulp (MWP) content was below 65%, meaning the goods did not qualify as newsprint.

The assessee requested a retest, which was done by the Central Revenue Control Laboratory (CRCL), New Delhi. The retest confirmed the earlier result. Based on this, the goods were reclassified under CTH 480260 and 480290, and a differential duty of ₹30,44,186 was demanded and confirmed in the adjudication order dated 28.08.2002.

The assessee challenged this before the Kerala High Court, which quashed the order and directed a fresh adjudication with an opportunity for cross-examination. The Supreme Court later modified this order and remanded the matter back to the adjudicating authority.

After allowing cross-examination, the adjudicating authority upheld the reclassification and duty demand. The Commissioner (Appeals) also confirmed this decision, leading to the present appeal.

The two member bench comprising D.M. Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) heard both sides and examined the records. The key issue was whether the imported consignment of 243.83 MTS of paper in reels under Bill of Entry dated 18.05.1999 could be classified as “newsprint” under Customs Tariff Heading 480180.

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The authorities had tested the samples at Cochin Customs Laboratory and later at CRCL, New Delhi. Both reports found the Mechanical Wood Pulp (MWP) content to be less than 65%, which disqualified the goods from being classified as newsprint.

However, the assessee challenged these reports, stating that the tests were not conducted as per ISO 9184/1-3 standards, which were specifically recommended under the Harmonised System of Nomenclature (HSN) Explanatory Notes for Chapter 48.

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The appellate tribunal noted that the Revenue relied on Indian Standard IS 5285/1998 rather than the ISO standard. It was also observed that the BIS standard considered fewer plant species compared to ISO 9184. During cross-examination, the analysts admitted the tests were not done according to ISO norms but as per BIS standards.

The tribunal found merit in the assessee's argument that applying different standards could distort test results. Citing the

Supreme Court’s decision in Tata Chemicals Ltd. v. Commissioner of Customs (Preventive), Jamnagar, it held that test results not based on the prescribed method cannot be relied upon.

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As the test reports were not in line with ISO 9184/1-3, the CESTAT rejected them and accepted the supplier’s certificate confirming that the fibre content met the required threshold. It concluded that the imported goods qualified as “newsprint” under Heading 480180, attracting ‘nil’ CVD. Accordingly, the impugned order was set aside and the appeal was allowed

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