2008 (5) TMI 598 - AT - Customs

Paper, classification of, as waste paper - Waste paper imported for re-pulping under exemption held by customs as of prime quality

Summary

Issues:
Classification of imported goods as waste paper under Chapter Heading 47.07 for concessional duty rate versus classification as prime quality paper under Chapter Heading 4804 for higher duty rate.

Analysis:
The appellant imported a consignment of paper claimed as waste paper under Chapter Heading 47.07 and cleared at a concessional duty rate. However, upon examination by Customs, it was deemed to be prime quality paper under Chapter Heading 4804, attracting a higher duty rate. The appellant contended that the goods had inherent defects, such as uneven coating, making them unsuitable for prime use. They provided a certificate from the supplier indicating the downgraded nature of the reels and their suitability only for re-pulping. The Commissioner rejected the appellant's request for re-examination of the consignment to ascertain the defects, without providing reasons.

The appellant argued that the goods' defects, like uneven coating, could be visually ascertained, and the Commissioner erred in denying the re-examination request. They emphasized that past imports of similar goods were used for re-pulping as waste paper, supported by end-use certificates. The appellant sought re-examination to determine the defects and requested a fresh decision based on the findings.

The Departmental Representative contended that the imported goods did not meet the waste paper criteria as per the HSN Explanatory Notes, which include various waste materials like shavings, cuttings, and rejects. They argued that the goods did not align with the waste paper description.

The Tribunal noted that waste paper classification encompasses defects like printers' rejects and similar issues, not limited to specific shapes or forms. Uneven coating could be considered a defect rendering the paper unsuitable for prime use. The examination report lacked details on defects but focused on packing. The Tribunal ordered re-examination of the consignment, emphasizing the need to identify defects, if any, including damage to the core sheets, to determine the waste paper classification. Both parties were directed to provide comments on the re-examination report, and no recovery proceedings were to be initiated until the report submission. The Tribunal refrained from expressing opinions on past consignments, indicating a future review during a fresh hearing.