2018 (2) TMI 1505 - AT - Customs

Benefit of N/N. 7-21/2002-Cus dated 1.3.2002 as per Serial I52A - import of consignment of paper which was claimed by them as waste paper classifiable under Chapter Heading 47.07 - the applicant represented before the Commissioner that the goods were having inherent defects because of uneven coating and damaged sheets and therefore could not be used as such and were accordingly cleared by the supplier as a waste paper not capable of being put to prime use. Held that - the waste paper as defined even in the HSN Explanatory Notes include printers rejects and similar material. It therefore implies that the goods need not necessarily be in the shape of clippings, shavings, cuttings etc. but defects in the roll as a whole. Prima facie uneven coating can be considered as one of the defects for which purpose the paper cannot be considered as prime paper. As per report dated 04.06.2008 along with photographs (certified by the team) were furnished to this Tribunal, the paper imported is defective and scrap only. Appeal allowed - decided in favor of appellant.

Summary

Issues: Import classification of goods as waste paper under Chapter Heading 47.07, examination of goods post-clearance, rejection of request for examination by Commissioner, nature of defects in goods, re-examination of consignment, appeal against impugned order.

Import Classification of Goods: The appellant imported a consignment of paper claimed as waste paper under Chapter Heading 47.07, cleared under concessional duty rate for re-pulping. Customs later deemed the goods as prime quality under Chapter Heading 4804, chargeable at a higher duty rate.

Examination of Goods Post-Clearance: The goods were examined post-clearance, revealing prime quality characteristics, contrary to the waste paper classification claimed by the appellant in the Bill of Entry. The appellant contended that the goods had inherent defects, making them unsuitable for prime use.

Rejection of Examination Request: The appellant requested the Commissioner to examine the consignment to ascertain defects, but the request was denied without providing reasons. The appellant argued that the defects could be visually identified, emphasizing that past similar imports faced no objections upon examination.

Nature of Defects in Goods: The appellant submitted a certificate from the supplier detailing defects in the goods, including uneven coating and damage, rendering them suitable only for re-pulping. The Tribunal noted that waste paper classification includes defects like printers' rejects, implying that the goods need not be in specific forms like clippings.

Re-Examination of Consignment: The Tribunal ordered a joint re-examination of the consignment by experts to determine the nature of defects. The subsequent report confirmed the imported paper as defective and scrap only, supporting the appellant's claim of waste paper classification.

Appeal Against Impugned Order: The Tribunal allowed the appeal, setting aside the impugned order with consequential benefits for the appellant. It clarified that the limitation for the use of imported paper would run from the date of receipt of the order, providing a favorable decision based on the re-examination report.

This detailed analysis of the judgment highlights the key issues, arguments presented, examination outcomes, and the final decision by the Tribunal in favor of the appellant based on the re-examination results confirming the waste paper classification of the imported goods.