2023 (12) TMI 615 - AT - Customs

Classification of imported goods purchased on High Seas Sale - waste paper printed waste books - classifiable under RITC 49011010 or under RITC 47079000? - HELD 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. 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. The appeal is disposed off by way of remand for a decision afresh, within 90 days of receipt of this order.

Summary

Issues: Classification of imported goods, applicability of customs duty, violation of EXIM procedures.

Classification of imported goods:
The appellant imported waste paper - printed waste books from Canada, but upon examination, it was found that the goods were new printed books like novels, story, comics, biography, etc. The Customs Act, 1962, specifies different classifications and duties for waste paper and printed books. The imported goods were classified under RITC 49011010 attracting 5% basic customs duty, while waste paper falls under RITC 47079000 with nil duty for recycling units. The adjudicating authority confiscated the cargo under sec. 111(d), (l), and (m) of the Customs Act, 1962, but allowed redemption on payment of a fine. The appellant argued that the goods were purchased for recycling into pulp for manufacturing 'duplex boards,' citing a High Court procedure for mutilation of goods. The respondent contended that the goods were books, not wastepaper, and the intended end-use does not determine classification. The Tribunal noted that the condition of goods at import is crucial for classification, although post-import procedures may be allowed in certain cases. The matter was remanded for fresh decision within 90 days, following the procedure outlined by the High Court.

Applicability of customs duty:
The dispute arose from the misdeclaration of imported goods as waste paper when they were actually new printed books. The basic customs duty differs for waste paper and printed books, leading to a Show Cause Notice proposing confiscation and penalties. The appellant claimed that the goods were meant for recycling into pulp for manufacturing 'duplex boards,' seeking permission for mutilation as per a High Court directive. The respondent argued that the goods violated EXIM procedures and should be upheld as books, not wastepaper. The Tribunal emphasized that the goods' condition at import is crucial for classification, despite potential post-import procedures to align with policy guidelines. The matter was referred back for a fresh decision within 90 days, with the appellant instructed to cooperate with the Adjudicating Authority.

Violation of EXIM procedures:
The case involved a discrepancy in the classification of imported goods, with the appellant mistakenly declaring new printed books as waste paper. This misdeclaration led to a Show Cause Notice, proposing confiscation and penalties under relevant sections of the Customs Act, 1962. The appellant argued that the goods were purchased for recycling into pulp for manufacturing 'duplex boards,' citing a High Court procedure for mutilation. The respondent contended that the goods were books, not wastepaper, and the imports violated EXIM procedures outlined in the impugned order. The Tribunal highlighted the importance of accurate classification at the time of import, while acknowledging potential post-import procedures permitted by authorities in certain cases. The matter was remanded for a fresh decision within 90 days, with the appellant instructed to assist the Adjudicating Authority in expediting the process.