2009 (2) TMI 160 - AT - Customs

Rejected waste paper Classification Assessee claimed classification under CTH 4707.90 as waste and scrap - The original authority held the goods to be seconds of tetra pack paper and classified the goods under CTH 4811.49 Held that - In order to be classify the goods under 4707.90 as waste of paper or paperboard three possible criteria could be followed (i) whether the goods are one of the specified categories viz, shavings, cuttings, clippings, torn sheets, old newspapers and journals, proof sheets, printers rejects and similar material, (ii) whether they are going to be used for pulping, (iii) whether they are presented in compressed bales. - In the instant case, the imported goods did not meet any one of the above criteria and hence they were not waste as described normally and often - Impugned goods are seconds of tetra pack paper not suitable for packing beverages etc. and are meant for use in making paper plates as per the order of the original authority. - These goods are rightly classifiable under CSH 4707.90 of the Customs Tariff. The appeal is allowed

Summary

Issues: Classification of imported goods under CTH 4707.90 as waste and scrap or under CTH 48.11 for packaging materials.

Analysis:
1. The case involved the classification of imported goods described as 'rejected waste paper in reels' under the Customs Tariff. The original authority classified the goods as seconds of tetra pack paper under CTH 4811.49, while the impugned order classified them under chapter Heading 48.11 for packaging materials.

2. The impugned order based its decision on the physical examination of the goods, which revealed them to be 'impregnated/coated paper with assorted width & length,' not suitable for pulping. The importer disputed the classification, arguing that the goods should be considered waste and scrap under CTH 4707.90.

3. The Tribunal considered the criteria for classifying goods under CTH 4707.90, which includes specific categories like shavings, cuttings, clippings, torn sheets, etc., normally used for pulping and often presented in compressed bales. The imported goods did not meet these criteria, leading to a dispute over their classification.

4. The appellants argued that the waste paper imported during the production of tetra pack packing material should be classified under CTH 4707.90 as it arises from various stages of production and is generated due to quality checks and processing issues. They provided detailed circumstances where waste is generated during printing and lamination processes.

5. The Tribunal analyzed the HSN Explanatory Notes to Tariff Heading 4707, which define waste and scrap of paper or paperboard, emphasizing that such materials are normally used for pulping and often presented in compressed bales. The lower authorities did not reject the importer's account of the paper generation, but the Commissioner (Appeals) found the goods not classifiable under CTH 4707.90 based on specific criteria.

6. Ultimately, the Tribunal found the reasoning of the impugned order to be fallacious, stating that the list of specified categories under CTH 4707.90 is not exhaustive. The imported goods, being seconds of tetra pack paper not suitable for packaging beverages, were deemed rightly classifiable under CTH 4707.90 as waste and scrap. The appeal was allowed, overturning the classification ordered by the Commissioner (Appeals).

7. The judgment was pronounced in open court on 27-2-2009 by the members of the Appellate Tribunal CESTAT, CHENNAI, Ms. Jyoti Balasundaram, Vice-President, and Shri P. Karthikeyan, Member.