2015 (10) TMI 1020 - AT - Customs

Tribunal Upholds Waste Paper Classification, Emphasizes Physical Condition for Duty Exemption

The Tribunal upheld the classification of imported goods as waste paper under Notification No. 21/2002-CUS, despite the presence of serviceable paper. The ... Declaration of goods - Imported goods are waste paper or not – Used craft paper - Valuation of goods imported under Customs – Penalty imposed for wrong declaration of goods – Assesee contends that goods imported are liable for concessional rate under Notification no. 21/2002-CUS - Department contended that 15 to 25 per cent paper was in waste form, remaining appeared to be fresh and serviceable kraft paper thus not eligible for exemption under Notification No. 21/2002-Cus. – Mis-declaration of goods under Section 111(m) of Customs Act, 1962. Held That:- The photographs of the goods which have been placed on record show that the rolls of the paper which had been imported were damaged. Therefore, just because some of the paper contained in the damaged rolls was found to be of serviceable quality, the consignment cannot be treated as of prime quality kraft paper more so, when the Adjudicating Authority has accepted the declared transaction value of the goods. - Department cannot allege mis-declaration of goods and seek confiscation under Section 111(m) - Department cannot allege that no credibility can be attached to the certificate of Assistant Commissioner – Found no merit in the Revenue’s Appeal – Decided in favour of the Assessee. Issues Involved:1. Classification of imported goods under Notification No. 21/2002-CUS.2. Determination of eligibility for duty exemption under Notification No. 21/2002-CUS.3. Confiscation of imported goods under Customs Act, 1962.4. Allegation of mis-declaration of imported goods as waste paper.Analysis:Classification of Imported Goods:The case involves the import of paper waste declared as 'waste paper-used kraft paper' under heading 4707 for concessional duty rate under Notification No. 21/2002-CUS. The dispute arises from the classification of the imported goods as waste paper eligible for duty exemption.Eligibility for Duty Exemption:The Revenue contended that a significant portion of the imported paper was fresh and serviceable kraft paper, not qualifying for duty exemption. The department's examination and testing revealed that the imported paper did not meet the criteria for waste paper as per the notification. The Additional Commissioner upheld duty demands and ordered confiscation based on this assessment.Confiscation under Customs Act, 1962:The Additional Commissioner's order included confiscation of serviceable kraft papers and waste kraft paper, along with penalties and redemption fines under relevant sections of the Customs Act, 1962. The Commissioner (Appeals) set aside this order, leading to the Revenue's appeal against the decision.Mis-Declaration Allegation:The respondent defended the classification of imported goods as waste and scrap of kraft paper, supported by pre-shipment inspection certificates and physical examination findings. The appellant argued against mis-declaration allegations, emphasizing the acceptance of declared transaction value by the Adjudicating Authority and the use of imported paper for manufacturing kraft paper, certified by the Jurisdiction Assistant Commissioner.Conclusion:Upon review, the Tribunal found that the imported goods, though containing serviceable paper, were correctly classified as waste paper based on the declared transaction value accepted by the department. Citing precedent, the Tribunal dismissed the Revenue's appeal, emphasizing the acceptance of declared value and the absence of evidence to dispute the classification. The Tribunal highlighted the importance of physical condition over theoretical value assessments in determining the eligibility for duty exemption under the notification.This comprehensive analysis addresses the key legal aspects and arguments presented in the judgment, providing a detailed understanding of the case's complexities and the Tribunal's decision.