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TMI Blog2002 (8) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... urther clarification obtained from the Jt. DGFT, Calcutta to the effect that white card board and ivory paper are not to be allowed under the said licences produced by the appellant. Ld. Commissioner in the impugned order disallowed the benefit of the notification. As a result, appellants were required to pay duty on the said consignments which was paid and cleared by them during the investigation itself under protest as a result of the impugned order, duty paid gets confirmed. 2. The facts of the case as narrated in the Order-in-Original in paras 4 to 9 and 12.1 to 18 are extracted herein below :- 4.0 Intelligence gathered indicated that attempts were being made to clear White Card Board in the guise of Card Board other than White Card Board under DEEC/transferred Advance Licences, the subject bills of entry were taken up for closer scrutiny to verify the eligibility of the imported goods (viz.; White Card Boards) for clearance against the advance licences submitted by the importers. 5.0 On examination, it was found that the goods imported under both the bills of entry covered by this Show Cause Notice were card board in white colour i.e., white card boards. The goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signments were also sent to the Central Revenue Control Laboratory, New Delhi vide this office letter SIIB/27/96, dated 20-5-96 with a request to analyse and report the nature and composition of the Card Board forwarded as well as to confirm whether they are other than White Card Board and Ivory. After testing the samples, the CRCL vide their letter C. No. 34-CUS/96, dated 20-6-96 have reported that the two samples were in the form of white and dull whiteboard made of layers of paper pasted together, having one surface smooth and glossy and other surface smooth and non-glossy. The smooth and glossy surface is coated with inorganic clay and binding material. Finish in each case is composed of Chemical pulp . They have reproduced the definition of Ivory Board as well as Card Board as available in the ISI Bulletin on Paper and Paper Products . They have concluded that the two samples do not have the characteristics of Ivory Board. 7.2 Though the reports did not say whether it is white card board or not, the colour of the card board is indicated as white and dull white. 8.1 During the course of the investigation, it was found that the office of the Joint Director General of Forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such licence shall be issued in accordance with the policy and procedure in force on the date of issue of the licence. Further, as per para 49 of the EIP, under a Value Based Advance Licence (VABAL) any of the inputs specified in the licence may be imported within the total CIF value indicated for those inputs, except inputs specified as sensitive items. If any sensitive item is not imported, the value indicated against the said item may be used for importing non-sensitive items. Sensitive items may be imported only to the extent of the quantity of value specified in the licence. The importer shall have the flexibility of importing a sensitive item in excess of the quantity or value limit indicated against it up to an extent of 20% of the quantity or value indicated, as the case may be, subject to the overall CIF value of the licence. 12.2 Chapter VII of the Handbook of Procedure (HBP) Vol. 1 to the EIP 1992-97 contains the provisions relating to the Duty Exemption Scheme . As per para 109C of the HBP Vol. 1, for the purpose of import, quantity and/or value restrictions shall be imposed on certain items categorised as, negative in the Hand Book of Procedure (HBP) Vol. 2 Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cardboards in white colour imported are to be treated as white cardboards and do not qualify for clearance against the entry non sensitive item - card board other than ivory board listed under the eight Advance Licences produced for the clearance of the two consignments covered by this Show Cause Notice. 13.1 The Customs Notification No. 79/95, dated 31-3-95 exempts materials imported into against a Value Based Advance Licence (VABAL) issued on or after 1st April, 1995, in terms of Para 49 of the EXIM Policy 1992-97, from the whole of the duty of the customs leviable thereon, which is specified in the First Schedule to the Customs Tariff Act, 1975, subject to the condition that the materials imported are covered by a Value Based Duty Exemption Entitlement Certificate (DEEC) issued by the licencing authority, in respect of value, description, quality and technical characteristics and that the said licence and the said certificate are produced before the proper Officer of Customs at the time of clearance for debit. As per the explanation (iii)(c) to the said notification materials means among other things packing materials required for packing of export product . 13.2 It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n payment of full duty as the materials were required by them urgently for completing some work orders. Considering the time involved in completing the investigation and the request of the importers, it was decided to release the goods imported in 7 out of 9 containers, on payment of full duty on the entire goods imported in 9 containers. Accordingly, the entire goods were assessed provisionally on merits, duty collected and cargoes stuffed in 7 containers were released on 17-5-96. Since, it took some time for completing the investigation, the order of competent authority as provided under Section 110(2) read with 124 of the Customs Act, 1962 was obtained, extending the time-limit for issue of Show Cause Notice by three months from the date of expiry of original time-limit of six months. The same decision was also conveyed to the importers vide this office letter of even no. dated 4-11-96. 15.0 From the foregoing, it was seen that M/s. ITC Ltd., Chennai have imported two consignments of White Card Board i.e. Card Board in white Colour and sought clearance under Customs Notification No. 79/85 issued under DEEC Scheme, against the eight VABAL listed under Para 1.0 of this Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd Board in white colour and the benefit of exemption claimed in terms of Customs Notification 79/95, dated 31-3-95 should not be denied as the Advance Licences produced do not cover the item under import viz., White Card Board, and duty collected on merits; (ii) the provisional duty of Rs. 36,56,545/- paid on provisional assessment should not be adjusted towards the duty payable on finalisation of assessment on merits; (iii) the goods White Card Board covered by the Bills of Entry No. 16030/2-4-96 and 15879/2-4-96 should not be confiscated under Section 111(d), (m) (o) of the Customs Act, 1962 readwith Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 for the act of misdeclaration of description, violation of the provisions of Export and Import Policy 1992-97 relating to Duty Exemption Scheme and also the conditions of the Customs Notification 79/95; and (iv) penalty should not be imposed on the importer for the above acts of commission and omission under Section 112(a) of Customs Act, 1962. 17. In reply to the Show Cause Notice dated 31-1-97, and addendum to the show cause notice dated 25-7-97, the party vide letters dated 30-5-97, 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port on 10-5-96 and 18-9-96. Shri S.P. Singh, O.C, Institute of Paper Technology, Saharanpur, the person who has given his comments from CPPRI and Shri M. Guru Raju Rao, JDGFT, during the personal hearing. 18. Accordingly, personal hearing was fixed for 19-9-97 but the party sought adjournment of the personal hearing to a later date in the month. Accordingly, the hearing was adjourned to 29-9-97. Shri Sashidharan, advocate, appeared and reiterated the submissions made in the letter dated 18-9-97 and insisted cross-examination of the persons stated supra and again sought adjournment. The next personal hearing was fixed for 5-11-97. During the personal hearing, Smt. D. Maitili, Advocate, appeared and cross-examined Shri S.P. Singh, Assistant Professor, Institute of Paper Technology, Saharanpur and Shri K. Sankaranarayanan, Deputy Chief Chemist, Custom House, Chennai. During the cross-examination, Shri S.P. Singh while confirming that he had given the test report being No. 32197, dt. 3-9-97, stated inter alia that a card board is a general term applied to board of 150 micrometer or more in thickness and the term is too vague to be technical. He was not aware whether there are differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ardboard can be classified as a white cardboard or otherwise based on thickness alone. There is no technical definition for white cardboards. Both sides of the cardboard should be white to call it as a white cardboard. The SIIB sought our clarification for white cardboard and since there is no technical reference for white cardboard, I had advised that the words white cardboard may be omitted from the test, reports referred to earlier. I cannot answer to your query as to what is Manila since it has no relevance to the case in question. I deny your suggestion that on the basis of pressure from the Investigating Officer I had agreed to delete the words white cardboard from the test results. The said words were suggested to be omitted since there is no technical reference for the term white cardboard . I agree with your suggestion that since there is no technical reference for white cardboard, a cardboard cannot be called as white cardboard or otherwise technically. The Advocate has no further questions to ask from the witness. 4. The answer given by Shri S.P. Singh, Principal Investigator, Institute of Paper Technology, Saharanpur, U.P in his cross-examination dated 5-11-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the common parlance, he answered it as chromo board . Much reliance has been placed by the appellant on these answers that the item is not a white card board . They also refer to the procedure of the Customs in having cleared this very item on umpteen occasions against the licence and contend that the item is a card board and clearly permissible under the licence and does not fall within the sensitive list. They also referred to the test report dated 10-5-1996 annexed to the show cause notice of the Chief Chemist who had clearly indicated that the item is a card board other than white card board and ivory board . They pointed out that this itself is sufficient to establish that the item is not a white card board . They contend that it is only the opinion of the JDGFT who, in his letter dated 13-6-97 to the Commissioner of Customs relying on the comments received from the Central Pulp and Paper Research Institute (CPPRI), clarified that the item is a white card board and hence it is not permissible to be imported, but however the very same authority in cross-examination could not confirm categorically that the item is a white card board . Therefore, they state that although ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only, despite the fact that the Dy. Chief Chemist in his cross-examination contended that the card board has to be white on both sides. He contended that the assessee ought to have also broughtout evidence in their favour to establish that the item is not white card board which they have failed to do so and hence the item is a sensitive item which cannot be imported and impugned order has to be upheld. He also referred to the JDGFT s letter dated 13-6-97 to the Commissioner who gave opinion on the basis of comments received by the Central Pulp and Paper Research Institute on the basis of examination of the item that it is a white card board which is a sensitive item and not permissible against the licence issued for import of card board other than ivory board. 9. We have carefully considered the submissions made and have perused the entire record. We notice in this case the revenue has not produced any evidence of common parlance or trade enquiries as to what the product is and how it is known in the market. They have not made enquiries from the supplier as to what the product is known internationally and as to whether the same is a white card board . The appellants are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating authority as to how in common parlance, the board tested by him is known, he answered that it is known as Chromo board . Therefore even as per the Principal Investigator of IPT, on whose evidence the Revenue is relying, has came out with a categorical answer that the item in question is a chromo board as understood in common parlance therefore, the item cannot be construed and understood as white card board . The Revenue ought to have established as to what a white card board is and how it is understood as both technically as well as in the trade. The answer given by Shri S.P. Singh, the Principal Investigator of Institute of Paper Technology clearly states that there is no definition of White Card Board in the Dictionary of Paper. Then the understanding arrived at by DGFT who are the licencing authorities ought have been explicitly brought out at least as understood in the common parlance or in the trade which, we find, has not been established. In the result, the judgment of the Apex Court rendered in Poulose and Mathen v. CCE (supra) is required to be given effect to inasmuch as that when there is a doubt and two difference of opinions in a particular matter, then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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