2021 (6) TMI 917 - HC - Customs

Classification of imported goods - Art paper of different descriptions - falling under CTI 4810 or under under 4811 - HELD THAT - It is evident that the form, size, GSM and any other special characteristic plays a major role in classification of the paper. The detailed Packing List for the Bill of Entry No.3192548, dated 18.03.2021, forwarded by the supplier suggested that the imported cargo contains different descriptions of Art paper falling under 481014 and 481019 depending upon size - It is evident from the seizure that the importer had classified the Art paper of different descriptions falling under CTI 4810, which is definitely Stock Lot of paper, as per DGFT Notification No. 45/2015-20 under 4811 to circumvent the prohibition imposed. The findings of the order passed by the learned Single Bench of this Court in M/S. JAYASAKTHI PAPERS VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS, (GROUP-2) 2021 (4) TMI 83 - MADRAS HIGH COURT was completely ignored where it was held that by introducing an impermissible yardstick namely, GSM variation, the respondents have arrived at a finding that the imported goods constitute a stock lot. This is patently illegal. The respondents are directed to release the goods, by granting liberty to the parties to adjudicate the matter - Petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Seizure of goods under DGFT Notification No.45/2015-2020.
2. Misdeclaration of imported goods under different classifications.
3. Interpretation of stock lot of coated paper.
4. Legal validity of the seizure and subsequent investigation.

Seizure of Goods under DGFT Notification No.45/2015-2020:
The petitioner, a proprietary firm involved in paper import and sales, imported coated paper sheets from the UK. Upon arrival at Tuticorin Sea Port, the goods were seized by the respondents under a seizure memo, citing a prohibition imposed by DGFT Notification No.45/2015-2020. The petitioner contended that the goods were not stock lot and did not fall under the prohibited category. The respondents argued that the importer misdeclared the goods to circumvent the prohibition, as the cargo contained coated paper classified under different descriptions within CH 4810 but declared under CTI 48119099.

Misdeclaration of Imported Goods under Different Classifications:
The respondents claimed that the importer misdeclared the coated paper sheets to avoid the prohibition, as the cargo contained different GSMs and sizes of coated paper falling under CH 4810 but declared under CTI 48119099. This misdeclaration was considered an attempt to circumvent the prohibition imposed by DGFT Notification No.45/2015-2020. The detailed examination of the cargo revealed discrepancies between the declared classification and the actual content of the imported goods.

Interpretation of Stock Lot of Coated Paper:
The classification of the imported paper was crucial, as certain characteristics determined whether it constituted a stock lot under DGFT regulations. The petitioner argued that the goods were not stock lot as per the DGFT Trade Notice and that the prohibition should not apply. However, the respondents maintained that the imported cargo indeed fell under the category of stock lot coated paper, as per the explanatory note of CTH 4810, and the misdeclaration was an attempt to evade the prohibition.

Legal Validity of the Seizure and Subsequent Investigation:
The court, after considering arguments from both sides and referencing a previous Division Bench decision, ruled in favor of the petitioner. Citing the precedent set by the Division Bench, the court directed the respondents to release the goods to the petitioner and allowed the parties to adjudicate the matter further. The court found the seizure of the goods for investigation to be legal, proper, and maintainable, ultimately leading to the decision to release the goods to the petitioner with liberty to adjudicate the matter as per the law.