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Issues: Mis-declaration of imported goods, classification of goods as waste paper or printing & writing paper, confiscation of goods, imposition of penalty, applicability of exemption notification, requirement of import license.
In this case, the appellants imported a consignment of waste paper but the department alleged that 20% of the cargo was mis-declared as printing & writing paper, subject to higher duty rates. The department also contended that import of printing & writing paper required a license, unlike waste paper. The Additional Collector of Customs ordered the confiscation of the 20% cargo, levied a redemption fine, imposed a penalty, and enhanced the assessable value of the goods. The appellants argued that the examination report was based on approximation, cited a Tribunal decision supporting their classification, and offered to pay differential duty if necessary. The department claimed that the appellants admitted during a hearing that 20% was serviceable paper, necessitating a license for import. The Tribunal analyzed the evidence and found discrepancies in the examination report, noting that the 20% quantity was an approximation and the serviceable paper was compressed in bales with shavings. Referring to industry standards, the Tribunal determined that the goods could still be classified as waste paper based on their composition. Citing previous Tribunal decisions, the Tribunal emphasized that waste paper is commonly used for pulp-making and can be imported in bales, while printing & writing paper is typically imported in rolls. The Tribunal also referenced a similar case involving an end-use bond requirement for duty concession under Notification 219/84. Ultimately, the Tribunal held that the Additional Collector's order confiscating the goods and imposing penalties was not sustainable. The appellants' classification as manufacturers of paper, their orders for waste paper only, and their willingness to mutilate objectionable goods before clearance supported the conclusion that the goods should be classified as waste paper. The Tribunal directed clearance of the goods subject to the execution of the end-use bond as per the exemption notification, leaving the decision on mutilation to the Assistant Collector. The appeal was disposed of accordingly.
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