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Issues: Misdeclaration of imported goods; Classification under Customs Tariff Heading; Confiscation under Section 111(m) of Customs Act; Reduction of redemption fine and penalty; Request for mutilation under Section 24 of Customs Act.
In this case, the appellant, a reputed manufacturer of paper, imported a consignment declared as 'waste paper/box board cuttings' for pulping and manufacturing duplex boards. However, upon examination, it was found that a portion of the consignment contained white card board sheets, leading to a dispute over the classification of the goods under Customs Tariff Heading. The lower authorities determined that a significant quantity of the imported goods did not qualify as waste paper or box board cuttings, classifying them under a different heading and imposing a higher rate of duty. The goods were held to be misdeclared and liable for confiscation under Section 111(m) of the Customs Act, with a reduced redemption fine and penalty imposed by the Commissioner (Appeals). The appellant argued that they should be allowed to mutilate the alleged serviceable goods and provide an end-use certificate to demonstrate that the imported goods were intended for pulping purposes only. They relied on a previous decision and emphasized that they were not traders but actual users of the goods for manufacturing duplex boards. The department, on the other hand, cited a Supreme Court decision to oppose the appellant's claims and asserted that the examination and test reports supported the misdeclaration of goods under import. The Tribunal analyzed the submissions and found that the appellant's request for mutilation, supported by evidence from the supplier, was made before the final examination, indicating the bona fides of the importer. Relying on legal precedents, the Tribunal allowed the mutilation of the goods under Section 24 of the Customs Act and directed classification and clearance as waste paper. Additionally, a Survey Report revealed that the goods were extensively wet and unsuitable for any purpose except recycling as waste paper, leading to a reversal of the classification under a different heading. The Tribunal concluded that there was no evidence of misdeclaration or intent to deceive, ultimately setting aside the order, allowing the appeal, and ordering clearance of the goods as waste paper post verification of mutilation.
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