Custom, Excise & Service Tax Tribunal
The Andhra Sugars Ltd vs Commissioner Of Customs, Chennai on 2 April, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/147/01
[Arising out of Order-in-Appeal No.C.Cus.No.66/2001 dt. 6.2.2001 passed by the Commissioner of Customs (Appeals), Chennai]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
Honble Mr. P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
The Andhra Sugars Ltd.
Appellant/s
Versus
Commissioner of Customs, Chennai
Respondent/s
Appearance :
None Smt.R.Bhagyadevi, SDR For the Appellant/s For the Respondent/s CORAM:
Mr. P.G. Chacko, Member (Judicial) Mr. P. Karthikeyan, Member (Technical) Date of hearing : 2.4.2008 Date of decision : 2.4.2008 Final Order No.____________ Per P.G.CHACKO The appellants had imported from Germany goods described as Alpha Cellulose Grade Arbocell BWW 40 (wood pulp coniferous bleached) and cleared the same under a Bill of Entry dated 30.1.97 on payment of duty as applicable to SH 4704.01. Such clearance was allowed under a test bond coupled with a Bank Guarantee. A sample of the goods drawn by the Customs authorities was tested in the departmental laboratory and the Chemical Examiner reported thus : Sample is in the form of white powder. It is composed of cellulose. It is other than pulp. On the basis of this test report, a show-cause notice was issued to the party proposing to classify the goods under SH 3912.90 and recover differential duty accordingly. In their reply to this notice, the party submitted that the test report was non-conclusive and requested that the sample be re-tested in the Central Revenue Chemical Laboratory (CRCL). In stead of allowing re-test, the Customs authorities sought clarification from the Chemical Examiner, who confirmed that the sample satisfied the definition for cellulose powder. On the basis of the test report and the subsequent clarification given by the Chemical Examiner, the original authority, in adjudication of the SCN, re-classified the goods under SH 3912.90 and demanded differential duty to Rs.2,52,707/- from the importer. The appeal filed by the party was dismissed on merits by the Commissioner (Appeals). Hence the present appeal of the assessee. Today, there is no representation for the appellants despite notice nor any request of theirs for adjournment. However, their written submissions, filed on 24.3.2008, are available on record. The appellants have prayed for a decision on merits, without hearing them. We have examined the records and heard ld.SDR.
2. One of the grounds raised in this appeal is that the principles of natural justice were not observed by the adjudicating authority by not heeding the request for re-testing by the CRCL. It is stated that the appellants did not know what literature was followed by the Chemical Examiner. But, we find, the Chemical Examiner had accepted and relied on the analytical certificate supplied by the party. That certificate had certified that the sample was highly pure cellulose having an average fibre length of 200 microns and an average fibre thickness of 20 microns and that only 0.5% of the sample was retained on 300 microns sieve. It was on the basis of this certificate as also with reference to the relevant classification opinion of C.C.C.N (BTN) that the Chemical Examiner clarified that the sample satisfied the definition of cellulose powder. We are of the considered view that there was no denial of natural justice by the original authority inasmuch as the test report and the subsequent clarification were given by the Chemical Examiner on the basis of the analytical certificate supplied by the party themselves and, therefore, no re-test was warranted. Yet another contention raised by the party is that, in the absence of evidence to show that the product was a plastic, it was not open to the authorities to classify it under Chapter 39. It is submitted that, in its nature and composition, the goods is cellulose derived from wood pulp and is not a derivative as defined under Heading 39.12. It is submitted that Alpha Cellulose is wood pulp with cellulose fibruous material but not powder as reported by the Chemical Examiner. It is submitted that Chapter 47 does not exclusively deal with all kinds of cellulose and that cellulose powder would also be covered by the expression primary form of cellulose as per Note 6 (b) to Chapter 39 of the Central Excise Tariff Schedule. The appellants have also relied on the Tribunals decision in CCE Vs Reliance Cellulose Products Ltd. 2000 (91) ECR 878. Ld.SDR has reiterated the findings of the Commissioner (Appeals). She has also referred to the relevant tariff entries, the Boards Circular No.6/90-CX. dt. 19.2.1990 and the Chemical Examiners report, in support of classification of the goods under Heading 39.12.
3. We have given careful consideration to the grounds of the appeal as also to the submissions of SDR. The relevant tariff entries are reproduced below :-
Assessees claim 47.04 Chemical wood pulp, sulphite, other than dissolving grades
- Unbleached :
4704.11 -- Coniferous
4704.19 -- Non-coniferous
- Semi-bleached or bleached :
4704.21 -- Coniferous
4704.29 -- Non-coniferous
Revenues claim
39.12 Cellulose and its chemical derivatives, not
elsewhere specified or included, in primary
forms
- Cellulose acetates :
3912.11 -- Non-Plasticised
3912.12 -- Plasticised
3912.20 - Cellulose nitrates (including collodions)
- Cellulose ethers :
3912.31 -- Carboxymethyl cellulose and its salts
3912.39 -- Other
3912.90 - Other
4. The written submissions filed by the party on 24.3.2008 say that Alpha Cellulose is a material derived from wood pulp (bleached or unbleached) falling under Chapter Heading 47.04. Their written submissions, in another place say that Alpha Cellulose is made from wood pulp (fibrous bleached with white colour with fibre length of 200 mm) and that it is not white powder as reported by the Chemical Examiner. However, in their written submissions, the appellants do not disclose the colour of the material. The appellants, however, say that Alpha Cellulose is a highly pure cellulose product from natural cellulose fibres. The data sheet of M/s.J.Rettenmaier & Sohne GmbH , filed in support of this submission, indicates that ARBOCEL is based on medium sized fibres of highly pure cellulose, white in appearance. Another document produced in support of the above submission is a letter of M/s. J.Rettenmaier & Sohne GmbH dt. 21.1.99 which says that ARBOCEL BWW 40 is made from chemical wood pulp (sulphite process pulp but no dissolving grades). We find that the documents would not go to show that the goods imported by the appellants is chemical wood pulp, sulphite, other dissolving grades. These would, at best, only indicate that the commodity was manufactured from such chemical wood pulp. A commodity made from chemical wood pulp cannot be considered as chemical wood pulp. The appellants appear to have assumed to the contra. The chemical literature indicates that cellulose is the fundamental constituent of all vegetables tissues and that it can be obtained in very pure form from chemical wood pulp also vide Halweys Condensed Chemical Dictionary. As a matter of fact, the documentary materials produced by the appellants are in support of classification of the subject goods as cellulose, not elsewhere specified or included, in primary form, under Heading 39.12 since it is other than cellulose acetates and cellulose ethers, it can appropriately be classified under SH 3912.90 (-Other). The Chemical Examiners report is very much in support of this classification. We have already noted that it was after consulting the literature produced by the party that the Chemical Examiner certified the goods to be composed of cellulose and to be other than pulp. The Chemical Examiners report based on the analytical certificate supplied by the party cannot be assailed by them.
5. In the result, we uphold the classification of the subject goods under Heading 39.12 and SU 3912.90 of the Customs Tariff Act Schedule. The assessee is liable to pay differential duty accordingly. The appeal stands dismissed.
(Operative part of the order was pronounced in open court on 2.4.2008) (P.KARTHIKEYAN) (P.G.CHACKO) MEMBER (T) MEMBER (J) gs 1 2