1993 (2) TMI 175 - AT - Customs

Summary

Issues:
1. Confiscation of paper under Customs Act.
2. Nature of imported goods - Waste Paper or not.
3. Import under Open General Licence (OGL).
4. Classification of goods under sub-heading 4707.20.
5. Exemption under Notification 219/84.
6. Valuation of the goods.

Confiscation of Paper under Customs Act:
The appeal was against the Collector of Customs confiscating 13.254 MTs of paper under Sections 111(d) and 111(m) of the Customs Act. The Collector alleged that the imported paper was not Waste Paper and was mis-declared to avoid duty payment. An option to clear the goods on payment of a fine was given. The appellants argued that they had ordered Waste Paper as per a specific notification and circular, supported by a certificate from the Defence Logistics Agency. The main issue was determining the true nature of the imported goods.

Nature of Imported Goods - Waste Paper or Not:
The key point was to ascertain whether the imported goods were indeed Waste Paper, as claimed by the appellants. The examination revealed that a portion of the import was not Waste Paper. The appellants argued that they had ordered Waste Paper for pulping purposes, citing past Tribunal decisions to support their case. However, the examination results contradicted their claim, leading to a dispute over the classification of the goods.

Import under Open General Licence (OGL):
The Tribunal analyzed the import policy regarding "paper waste" under the OGL. The expression "paper waste" was not explicitly defined, but it implied material unfit for normal use and intended for pulping. The appellants' import of bond paper, copy paper, and Xerox paper did not align with the criteria for Waste Paper as per the policy and circular. The Tribunal upheld the Collector's decision that the goods were not eligible for import under the OGL.

Classification of Goods under Sub-heading 4707.20:
Since the goods were not deemed Waste Paper, they did not qualify for classification under Heading 47.07. The Explanatory Note to the heading clarified that only specific waste materials were covered. Consequently, the goods were classified under the residuary sub-heading 4802.60 based on the examination results.

Exemption under Notification 219/84:
The Tribunal assessed the goods against the items listed in Notification 219/84 for exemption. The notification primarily covered shavings, cuttings, and waste materials, excluding certain specific items. The imported goods did not match any listed items, leading to the denial of exemption from basic and auxiliary duty. The Tribunal distinguished a previous case and upheld the denial of exemption based on the examination results and evidence presented.

Valuation of the Goods:
Regarding the valuation of the goods, the appellants did not provide an alternative valuation. The Collector used the white ledger value from the invoice for valuation, which the Tribunal deemed appropriate and not arbitrary. The appeal was rejected on all counts, affirming the Collector's decision on confiscation, classification, exemption denial, and valuation.