2017 (9) TMI 1511 - AT - Customs

Concessional rate of duty - benefit of N/N. 21/2002-Cus. - import of Glazed News Print - it emerged that the commodity was news print with surface roughness of 1.9 / 1.8 and 1.7 / 1.6 respectively. It appeared to the department that the imported consignments did not satisfy the condition of Chapter Note 4 for Chapter 48, whereby the Parker Print Surface roughness should exceed 2.5 microns - Held that - The samples tested conformed to all specifications of news print except for the surface roughness. The imported items being Glazed News Print, it cannot be expected to have surface of Parker Print Surface roughness of more than 2.50 microns. By glazing the ordinary news print, its roughness gets reduced and therefore the specifications given with regard to standard news print cannot be applied to them of glazed newsprint - further, There is no dispute that the goods imported fall under Chapter 48. As the Chapter Notes are entitled to consideration in deciding the matter of classification of particular goods, nonetheless, when it comes to extending effective rate of duty, the intention of the legislature will certainly have to be given paramount importance and supremacy over even Chapter notes. Further, there is no dispute that the imported goods have been used as Glazed paper for the cover of the magazine published by them. The imported goods are eligible for the benefit of exemption under said entry Sl.No.154 of N/N. 21/2002-Cus. - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Chapter Notes for classification of imported goods as newsprint under Chapter 48 and eligibility for concessional rate of duty under Notification No.21/2002-Cus.

Analysis:
The case involved the import of 'Glazed News Print' by the appellants, which did not meet the surface roughness criteria specified in Chapter Note 4 for Chapter 48. This discrepancy led to the denial of the concessional rate of duty under Notification No.21/2002-Cus. The Commissioner (Appeals) upheld the original authority's decision, prompting the appeal. The main contention raised by the appellant was that the glazed newsprint, despite not meeting the roughness requirement, should still be classified under Chapter 48 due to the processes it underwent as per Note 3. The appellant argued that the exemption under Notification No.21/2002-Cus. was not limited to standard newsprint but also covered glazed newsprint.

The appellant's representative highlighted that the glazing process reduced the roughness of the newsprint, making it fall below the specified 2.5 microns. They emphasized that the exemption should apply to all newsprint falling under Chapter 48, including glazed newsprint. Additionally, they argued that rules of interpretation, section notes, and chapter notes should not be considered when interpreting exemption notifications. The appellant also referenced the Finance Minister's budget speech from 1998-99, which proposed a reduction in duty for standard newsprint and rationalization of duty for glazed newsprint.

On the other hand, the respondent referred to a Supreme Court judgment emphasizing the persuasive value of Explanatory Notes to HSN in classifying goods under the Central Excise & Customs Tariff. The Tribunal noted that while the imported goods fell under Chapter 48, they did not meet the roughness specifications for standard newsprint. However, considering the intention behind the budget proposal and the uniform tax structure for newsprint, the Tribunal ruled in favor of the appellant. The Tribunal held that the glazed newsprint was eligible for the exemption under Notification No.21/2002-Cus., setting aside the impugned order and allowing the appeal.

In conclusion, the judgment focused on the interpretation of Chapter Notes and the eligibility for a concessional rate of duty under a specific notification concerning the import classification of glazed newsprint under Chapter 48. The Tribunal's decision highlighted the importance of legislative intent and the overall context of the exemption notification in determining the applicability of duty benefits to the imported goods.