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Judgment
M. Ajit Kumar, Member (T)
This appeal is filed by the appellant against Order in Original TUT-CUSTOM-PRV-COM-006-20-21 dated 17.11.2020 passed by the Commissioner of Customs, Tuticorin.
Brief facts of the case are that appellants imported waste paper – printed waste books from Canada. On scrutiny, it was found that the imported had declared the goods contained in one container as waste paper – printed waste books. On examination of the cargo, it was found that the imported goods were new printed books like novels, story, comics, biography etc. The basic customs duty for the waste paper under RITC 47079000 is nil for recycling and manufacturing units. However, printed books are classifiable under RITC 49011010 and attract 5% basic customs duty (per unit) as per Sl. No. 25 of Notification No. 25/2019-Cus dated 6.7.2019. Accordingly, Show Cause Notice was issued to the appellant proposing to confiscate the goods and impose penalties. After due process of law, the adjudicating authority confirmed the proposals in the Show Cause Notice by confiscating the entire cargo covered under Bill of Entry 14.2.2020 valued at Rs.3.63 crores under sec. 111(d), (l) and (m) of the Customs Act, 1962. However, he allowed redemption of the same on payment of fine of Rs. One crore. He also imposed penalties under sec. 112(a) and 114AA of the Customs Act, 1962. Aggrieved against the said order, the appellant is now before the Tribunal.
No cross-objection has been filed by the respondent department. 3.1 Smt. H. Mary Sowmi Rexi, learned counsel appeared for the appellant and Smt. Anandalakshmi Ganeshram, learned AR appeared for the department.
3.2 The learned counsel for the appellant submitted that the imported goods were purchased on High Sea Sales basis and they were under the impression that the goods were waste paper – printed waste books, as declared by the original importer. The goods were meant for recycling and conversion into pulp in the appellants paper mill for manufacture of ‘duplex boards’. She stated that they were willing to mutilate the books as per the procedure permitted by the Hon’ble High Court of Madras in WP (MD) No 14427 of 2021 dated 31/08/2021. She prayed that the appeal may be allowed.
3.3 The learned Smt. Anandalakshmi Ganeshram submitted that the goods were books and hence could not be treated as wastepaper. The appellants claims that the books were meant for conversion into pulp in the appellants paper mill for manufacture of ‘duplex boards’, however classification cannot be made based on purported end use. She stated that the imports were in violation of the EXIM procedures as detailed at para 29 of the impugned order and hence the impugned order may be upheld.
We have gone through the appeal records carefully and heard the rival parties. We agree with Revenue that the condition of the goods at the time of import, which is the taxable event, is the material factor for the purpose of classification and that end use to which the goods are put to by itself cannot be determinative of the classification of the product. However, it is noticed that at times post import procedures of goods to suit policy guidelines have been permitted by the department. For example, Public Notice No. 173, dated 13th December, 1985, issued by the Collector of Customs, Bombay, laying down guidelines for post import mutilation and import of garments / rags. [Refer: Rupani Spinning Mills Pvt. Ltd. vs Union of India (UOI) [(1992) 60 ELT 77 / (1988) 2 GLR 880]. Such imports are subject to penal action for import violations. Similarly, Section 18 of the Legal Metrology Act, 2009 (‘LMA’) provides that no person is allowed to manufacture, pack, sell, import, deliver, distribute, offer, expose or possess for sale any prepackaged commodity unless such package contains declarations in the prescribed format. However, CBEC vide Circular No. 33/2016-Customs dated 22/07/2016 at Para 1.5.2 of Section 1 prescribes certain relaxations for importers of AEO-T2 including affixation of MRP label at their premises. We find that as relied upon by the appellant, a similar matter was examined by the jurisdictional High Court in W.P. (MD) No. 14427 of 2021 and WMP (MD) No. 11364 of 2021 dated 31.8.2021 wherein while disposing of the writ petition, the Hon'ble High Court stated as under:-
“29. In view of the afore stated discussion, this writ petition is disposed of with the following order:-
“That there shall be a direction to the respondents to consider the claim / request of the petitioner as per his request dated 3.7.2021, permitting the petitioner to denature or mutilate the goods in question, which has been imported as per Bill of Entry dated 5.7.2021 seized on 23.7.2021, in the presence of the Customs officials after adopting the due formalities in this regard, as contemplated under section 24 of the Customs Act, 1962 and accordingly after mutilation or denaturing of the goods in question, the same can be released to the petitioner by adopting the usual and regular procedure for imposing the applicable customs duty and other charges. The needful as indicated above shall be undertaken by the respondents within a period of two weeks from the date of receipt of a copy of this order.”
We deem it fit that the matter may be examined by the lower authority on similar terms. We set aside the impugned order and dispose of the appeal by way of remand for a decision afresh, within 90 days of receipt of this order. The appellant should also co-operate with the Adjudicating Authority in completing the process expeditiously. Appeal is disposed of accordingly.