TaxTMI 
TaxTMI 
1987 (12) TMI 157
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....ak wood squares" in the import documents furnished by the suppliers, namely, specification list, country of origin certificate-cum-invoices, bill of lading etc. On examination, the customs authorities found the goods to be "Dressed squares" and not as they were described in the Bill of Entry. The Department, therefore, alleged that the appellants had deliberately mis-declared the description of the goods with intent to evade the auxiliary duty of customs (hereinafter referred to as auxiliary duty), leviable in terms of Customs Notification No. 310/86 at 40% ad valorem amounting to Rs. 5,56,074-00. Accordingly a show cause notice dated 5-3-1987 was issued to the appellants and their Custom House Agent (M/s. Clifford D'Souza) and on conclusion of the adjudication proceedings, the Additional Collector of Customs - (i) ordered classification of the goods under Heading No. 44.21 of the First Schedule to the Customs Tariff Act, 1975 (hereinafter the said Schedule is referred to as the Schedule), assessment of basic duty of customs (duty leviable in accordance with the schedule) at 'nil' rate in terms of Notification No. 280/76 and auxiliary duty at 40% ad valorem in terms of Notificat....
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....t further manufactured". On the reverse of the original Bill of Entry is the report of examination by the Inspector of Customs in the presence of the Superintendent of Customs. - Docks. It reads :- "Inspected the lot of Teak wood squares. Verified the goods. The goods are square teak wood. The wood is dressed and square. Test measured 20 samples. Teak wood squares. Marks and Nos. agreed." From this the department seems to have concluded that the goods were "dressed squares" and not "roughly squared or half squared but not further manufactured" as declared in the Bill of Entry and this forms the basis of the allegation that the goods had been mis-declared with a view to evade payment of auxiliary duty of customs. 4. In the above context, The learned Counsel points out that the Additional Collector has held that the goods were classifiable under Heading No. 44.21 of the Schedule. The heading reads as follows :- "44.21      -    Other articles of wood. 4421.10      -    Clothes hangers 60% 4421.90     -    Other 60%" It is the counsel's submission that a p....
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....hould not be relied upon because examination by these authorities was done after the customs examination was over and without the knowledge and permission of the customs authorities. In other words, the Custom House was not a party to the examination of- the goods by those authorities. As the adjudication order shows, the pieces of wood were planed on all the six sides and have no traces of bark or rough areas, the presence of which is necessary for the goods to be called "roughly squared". 6. We have carefully considered the submissions of both sides. The Additional Collector has classified the goods under Heading No. 44.21, the text of which has been reproduced earlier. Even on prima facie considerations, we are of the opinion that the present goods cannot be said to be "articles of wood", which would imply articles fabricated or made out of wood, whereas, even assuming for a moment, that the goods are not "roughly squared" but are planed on all the six sides, they cannot be said to be fabricated or made out of wood. The basis for this view is contained in the headings of Chapter 44 themselves. Heading Nos. 44.01 to 44.13 describe various forms of wood and some articles of woo....
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.... and the Packing List describe the goods as Burma Teak squares, we cannot overlook the fact that the Certificate of origin which has also been issued by the Timber Corporation of the Union of Burma, amplifies the description to read "teakwood roughly squared and half-squared but not further manufactured". The customs examination report no doubt reads that the wood is dressed and squared, but as Shri Lakshmikumaran points out, the term "dressed timber" has a particular significance in the timber trade- as may be gathered from the Indian Standard Glossary of Terms applicable to Timber Technology and Utilization (IS: 707 - 1976). The Standard describes dressed timber as timber which has been sawn, planed and worked to the exact required condition. It also describes "dressing" as initial preparation of a log for extraction or conversion, including removal of bark, branches, protuberances, buttresses, etc. The customs examination report does not show that the timber pieces have been planed on all the six sides though the Additional Collector has recorded that "it is seen that the planing after sawing has also been completed". The basis for this finding is not clear and has not been spel....
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....not worked to the exact required condition. They need to be further worked by re-conversion for further manufacture to conform to the requirements of IS ; 1331. These certificates have been rejected by the Additional Collector inter alia on the ground that since the sapwood and bark had been removed on all four sides, what remains is the heart wood. This means that there are no traces of bark on the pieces of wood. The Additional Collector notes that according to the Explanatory Notes under Heading 44.03, "roughly squared wood" means trunks or sections of trunks of trees, the round surfaces of which have been reduced to flat surfaces by means of axe, adze or by coarse sawing, to form wood of roughly rectangular (including square) cross section; roughly squared wood is characterised by the presence of rough areas or bark traces. Half squared wood, which is wood prepared in this manner on two opposite faces only is also classified under the heading. Since the present goods do not have any traces of bark on them, the Additional Collector concludes that they are not roughly squared wood. However, the notes only lay down that roughly squared wood is characterised by the presence of roug....