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TMI Blog1987 (1) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... Chairman and an Assistant Collector of Customs and a Senior Scientific Officer of the Office of the Textile Committee as Members. Based on the panel s findings, show cause notices were issued to the importers to the effect that the goods appeared to be other than wool waste but long lengths of slivers/tops or deliberately broken tops which could be easily joined at the end to prepare them ready for spinning. The importers were charged with violation of import control regulations and asked to explain why action should not be taken under sections 111(d) and (m) of the Customs Act, 1962 and also why the goods should not be charged to duty under heading 53.01(1) [the correct No. is 53.01/05(1)] of the Customs Tariff Schedule (i.e. the First Schedule to the Customs Tariff Act, 1975) read with Customs Notification No. 154-Cus. dated 4-7-79 at the rate of 40% + auxiliary duty at 10% + addl. duty of customs at Rs. 9.375 per kg. under item No. 43 of the Central Excise Tariff Schedule read with the relevant notification. Adjudication proceedings were held by the Additional Collector of Customs, Bombay, in the course of which the importers counsel had also cross-examined the members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to earlier) and were found to contain natural coloured slivers of about 5 meters and 4 meters respectively. The department concluded, on the basis of the Panel report, that the goods could not be treated as wool waste. The goods were, therefore, held to be not entitled to duty exemption in terms of the aforesaid notification and further not eligible for clearance against the aforesaid import licences. L.W.S. were, therefore, called upon to show cause (by a notice dated 3-1-85) why the goods should not be confiscated under Sec. 111 (d).) of the Customs Act and penal action should not be taken against them under Sec. 112 of the Act. L.W.S. replied on 23-2-85 denying the allegations in the Show Cause Notice. They drew attention to the report of the expert panel in which, whereas the Dy. Chief Chemist and the Assistant Collector (Shri Bhide) had held that the goods were not wool tops for customs classification and ITC licence purposes but were cut pieces of slivers/cut pieces of wool tops which could be directly used for spinning into yarn, the Senior Scientific Officer, Textile Committee (Shri Rane had stated :- On examining the samples visually drawn from each consignment, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wool tops and soft waste to the following effect :- Slivers of different small lengths, cut slivers, broken pieces of slivers of variable and non-continuous small lengths upto 20 meters or even more cannot be subjected to drawing and spinning process directly as in the case of wool tops. These are a kind of soft wool-waste and nothing else. Wool tops which can be subjected to drawing and spinning processes directly have a standard weight and specific continuous length, the definition of wool Tops is a running length of at least 300 to 450 meters approximately and weight of sliver varies from 10 to 20 grams per meter of length, which are wound into a ball weighing 5 kgs. to 8 kgs. approximately or even more.." All these disproved the department s allegation that pieces of sliver of 4-5 meters length were directly spinnable and were not wool waste. Finally, L.W.S. asked for cross-examination of the Deputy Chief Chemist, the Assistant Collector and any other person on whose opinion reliance was being placed by the department. In the hearing which took place before the Additional Collector of Customs, Bombay, the Members of the Expert Panel were cross-examined by the counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded slivers which have been deliberately cut or broken into short uniform lengths. On the other hand, heading 53.03 covers waste from combing, carding and .other processes preparatory to spinning, namely, noils, composed of short fibres removed during combing, laps and sliver ends, small waste pieces of the combed lap etc. Though the length of slivers or rovings or tops to be considered as waste has not been indicated in the aforesaid CCCN notes, the Additional Collector concludes that sliver ends refer to short pieces. (ii) Heading 53.03 would cover also slivers/tops whether deliberately cut or broken or whether in short uniform or non-uniform lengths. (iii) Board s Tariff Advice of 4.2.60 with reference to item No.49(4) of the Indian Customs Tariff Schedule (in force prior to the 1975 Schedule) provides that woollen waste may consist of free fibres and clippings, cuttings etc. They should not consist of long lengths of yarn or of rovings or slivers. (iv) In the light of the above, it is clear that rovings, slivers/tops of short lengths or ends alone could be considered as wool waste. The wool content of the present disputed consignments is more than 98% or completely wool a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 4-7-79. The notification, in turn, pertained to wool, raw and wool tops falling under heading 53.01/05(2) of the Customs Tariff Schedule. The impugned order, however, went on an entirely different basis, namely, that the goods were neither wool, raw nor wool tops nor woollen waste but process woollen products falling under heading 53.01/05(1) attracting duty at the statutory rate. (v) The evidence produced by the appellants in support of the contention that slivers upto, and even more than, 15 meters in length could be considered as waste was, without justification, ignored. The Deputy Chief Chemist, in his cross-examination, had deposed that the panel noted down only the length of the sample drawn from the consignment and no other features of the sample. He had further made it clear that he had to follow the Central Board of Revenue s Tariff Advice on the subject of what constituted woollen waste though the said advice did not define what should be considered as long length . However, the Deputy Chief Chemist had clarified that there was no note of examination by the panel to the effect that the goods were found to be cut pieces or deliberately cut pieces or that they were h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 240-Cus dated 2-8-76 exempted woollen waste falling under chapter 53 of the Customs Tariff Schedule. It did not matter under which heading of the chapter the waste fell. The Custom House could not, therefore, deny exemption on the ground that the subject goods fell under one particular heading and not the other. Notifications ought to be construed liberally (authorities cited). The CCCN explanatory notes should not be followed in interpreting the entries in the Customs Tariff Schedule 1975 (authority cited). (ii) Even CCCN did not define woollen waste. It classified different types of wastes under different headings. (iii) The subject goods are woollen waste. As per the definitions in the ASTM (American Society for Testing of Materials), the present goods would be classifiable as soft waste . Waste could arise out of excess lengths in wool tops which could not be economically used and which were, therefore, disposed of as wool waste. To say that fibres exceeding 3 meters in length were not eligible to be classed as waste would amount to adding words to the notification which itself did not define waste. (iv) An established practice followed by the Custom House could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both sides and perused the records. 15. The first thing we would like to observe is that there does not appear to be any authoritative definition of what constitutes woollen waste . At any rate, none has been placed before us. The glossary of Textile Terms (natural fibres) published by the Indian Standards Institution - I.S. 232:1967-defines wool tops but not woollen waste. The Central Board s Tariff Advice of 14-7-60 states:- Woollen waste - should consist entirely of woollen fibres or can also contain a small %age of other fibres such as cotton or nylon...... It may consist of free fibres and clippings, cuttings etc. They should not consist of long lengths of yarn or of rovings or slivers. The wool content (expressed as a percentage of total fibre content) should not be less than 80% in the case of woollen waste. The other 20% may consist of any other fibres natural or synthetic. It may be noted that the above definition contemplates free fibres and clippings, cuttings etc. It also envisages that there should not be long lengths of yarn, rovings or slivers. As to what constitutes long lengths, it is silent. While it is a settled position in law that Board s Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wool waste, Shri Rane, Senior Scientific Officer of the Central Testing Laboratory, Textile Committee, Bombay, appended a dissenting note. As already noted, the Panel did not have any authoritative definition to go by. The Deputy Chief Chemist placed reliance on the Board s Tariff Advice which, as we have noted, was far from being precise. The majority report records that the goods were found to be cut pieces of slivers which are parallely laid, homogenous and the thickness is even. Merely by visual inspection, it was found by us that these were nothing but cut pieces of wool tops which could not have been said to have arisen during the process of manufacturing yarn from the wool tops in order to qualify (as) soft waste viz. small cut ends of wool tops. In these consignments, the length of the slivers has also been found by us to be ranging from 3 meters to 15 meters. The goods in these cases cannot be considered to be wool waste for the purpose of exemption under notification No. 240-Cus., dated 2-8-76 as these are not short lengths in entangled form which is generally the condition of wool waste. These are such that these can be directly used for spinning. These are also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alidity of the majority report has been considerably diluted by the depositions in cross-examination. (v) The evidence tendered by the appellants cannot be dismissed without justification. It needs to be examined for its evidentiary value: (a) The letter, dated 5-6-81 from S.G.S. India Private Ltd. (a member of the Group Societe Generale de Surveillance) states that commercial wool tops which can be subjected to drawing and spinning process directly have a standard weight and specific continuous length. It further states that broken pieces of slivers of variable lengths cannot be subjected to drawing and spinning processes directly as in the case of wool tops. (b) The definition of soft waste as given in Applied Textiles 5th Edition - Raw materials To Finished Fabrics - by George E. Linton and Joseph J. Pizzuto reads as follows:- These comes (sic) from the carding, combing, filling and drawing departments of the mill, sliver, slubbing, top and roving furnish the waste Which may be white or coloured. Staple length, handle and appearance will be the same as those of the original source. These wastes have much call in woollens (sic) and are used to some degree in worsted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a soft wool waste." (e) Shri Kuldip Raj, a Textile Technologist of Ludhiana, in his certificate, dated 3-5-85 states that he has been in the trade and is conversant with wool tops and wool waste and opines that sliver pieces of even more than 15 meters in length arise as waste in the process of wool top manufacture and also during the first preparatory for worsted spinning. These are treated as soft waste. It is not possible to spin worsted yarn out of such wool waste. (f) To similar effect is the certificate, dated 11-5-1985 issued by Shri S.K. Kathju, a Chartered Textile Technologist from Ahmedabad. He says inter alia: short lengths of slivers, upto 15 meters or so, are discarded as waste in wool top making and in the spinning process. These wastes are used for woollen spinning. Such pieces of sliver cannot be used directly in spinning on the worsted system. (g) We do not consider it necessary to refer to other certificates from textile technologists filed by the appellants because they run more or less on similar lines. (h) The evidence discussed above, produced by the appellants, has been, in our opinion, summarily rejected by the Additional Collector on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at best, only persuasive value. Even so, it may be worthwhile looking at the C.C.C.N. notes. The crucial portion appears to be the note under heading 53.05 to the following effect :- This heading covers the slubbings, carded slivers, tops, and rovings referred to above and also cut or broken tops and cut or broken carded slivers, which have been deliberately cut, or broken into short uniform lengths. No evidence has been placed before us, nor has any evidence as on record been pointed out to us, by the department to show that the goods in the present cases consist of tops and carded slivers which have been deliberately cut or broken into short uniform lengths. The Additional Collector concluded that such deliberately cut uniform lengths or products which are not the result of deliberate cutting would fall under heading 53.03 of the C.C.C.N. Assuming for the sake of argument that it may be so, would that make any real difference? We think, not. Our reason is that, in the first place, it is nobody s case that the present goods do not fall under heading 53.01/05 of the Customs Tariff Schedule, 1975. Hence, it is immaterial whether the goods fall under heading 53.03 or 53.05 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to our findings and conclusions. 21. The result is that the evidence on record points, in our view, to the conclusion that the subject goods are woollen waste . The department has not shown that they are not woollen waste. 22. The goods are, therefore, eligible for duty exemption in terms of notification 240 Cus., dated 2-8-1976. Since the goods are held to be woollen waste, the rejection of the licences on the basis that the goods are not woollen waste has also to be held as incorrect. 23. In the view we have taken and in the light of the above discussion, we do not think it necessary to refer to and discuss the authorities cited before us by the learned counsels for the appellants. 24. The result is that the impugned orders are set aside, the goods are declared to be eligible for duty exemption in terms of Customs Notification No. 240, dated 2-8-1976 and allowed to be cleared against the licences for import of wool waste. If fines and duties have been paid, they shall be refunded to the respective appellants. 25. Shri Gagrat had submitted before us that a considerable amount of demurrage had accrued on the consignments. He, of course, conceded that the tribunal had n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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