Customs, Excise and Gold Tribunal - Mumbai
Leldekar Laminates Pvt. Ltd. vs Collector Of Customs on 12 February, 1990
Equivalent citations: 1990(30)ECR331(TRI.-MUMBAI), 1990(50)ELT40(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. The present appeal is directed against the Order-in-Original No. S/10-65/84 dated 11.6.84 passed by the Additional Collector of Customs, Bombay, rejecting the clearance of the items imported by the appellants vide Bill of Entry No. 2558/318 as Base Paper for waxing, impregnating and coating material falling within entry No. 29 in Appendix 5 of the Import Policy 1983-84 AM.
2. The appellants are the manufacturers of laminated sheets and held import licence No.P/A/2231411/C/XX dated 26.8.83, duly endorsed for import of items figuring in Appendix 5 of the Policy AM 1983-84. The appellants imported certain items and sought clearance vide Bill of Entry 2558/318 declaring the item as Base Paper for waxing, impregnating and coating, claiming the same as falling within entry No. 29 of Appendix 5. The department objected to the clearance observing that the items were the decorative papers falling within entry No. 129 of Appendix 3 of the Policy. A test of the sample was carried out by the Dy. Chief Chemist, who declared the items as usable as Base Paper. The department, however, served a notice to show cause, dated 23.4.1984. The appellants, in their reply thereto, contended that what was imported was the Base Paper, specifically permissible under Entry 29 of Appendix 5, and pleaded that even the Dy. Chief Chemist had also opined accordingly. They also contended, that entry 29 in Appendix 5 was a specific entry as against entry 129 of Appendix 3 which was in generic terms, and that vide Para 240 of the Policy Book, the specific entry would prevail over the generic entry. They therefore submitted that the consignment be cleared. In the alternative, they pleaded that, as per their licence, they were even authorised to import items falling under Appendix 3 and as such, items imported may be cleared.
3. In the adjudication proceedings that followed, the Additional Collector, besides considering the points raised, also called the Acting Dy. Chief Chemist, for the second opinion as to the nature of the item imported, and the Acting Dy. Chief Chemist, on visual examination opined that considering the thickness, it was suitable for use as wall paper or decorative paper. The Additional Collector basing his conclusion thereon, held that the item imported was also a decorative paper. He also took the view that entry No. 29 in Appendix 5 was a generic entry whereas entry No. 129 in Appendix 3 was a specific entry and vide para 240 (B) of the Policy Book, the specific entry should prevail. He therefore refused clearance under entry 29 of Appendix 5. He also took support to his said conclusion from import of the similar items made by another manufacturer of such laminated sheets, where item was cleared as "decorative paper" and not "base paper". As the licence was also available for import of Appendix 3 items, the Additional Collector allowed clearance of the said item under Appendix 3 to the extent of the value of Rs. 1,00,000/- as was the permissible limit, and holding the surplus of item valued at Rs. 49,954.00 as unauthorised, ordered confiscation but allowed option to pay fine of Rs. 30,000/-, in lieu of confiscation. It is this order which is challenged here.
4. Mr. S.D. Nankani, the learned advocate for the appellants submitted that the Additional Collector has misguided himself on the point, both of law and facts and has misread and misinterpreted the provisions of the Policy. In his submission, item imported is the base paper for waxing, impregnation and coating which though appears like a decorative paper is different, as the base paper is essentially required to have special essential quality of absorption, as otherwise, impregnation is not possible. He submitted that this special quality distinguishes the base paper from decorative paper and that in the item imported, this special quality exists, as is now duly established even by the report of the Dy. Chief Chemist of the department. In his submission, even after the Additional Collector, sought second opinion, by adopting an unusual and unwarranted procedures, the department has not been able to establish that the item imported is not the base paper, and that the finding of the Additional Collector also reflects the same. He submitted that when the item imported is proved to be the base paper, it was not open for the Additional Collector to hold the same as "decorative paper". Mr. Nankani further submitted that assuming that the item imported also falls within the description of "decorative paper", the term "decorative paper" used in entry No. 129 of Appendix 3 is a generic term whereas the "base paper" in entry No. 29, of Appendix 5 was the specific item and vide para 240(B) of the Policy Book, specific entry would prevail over the generic entry and as such the clearance ought to have been allowed, and that the Additional Collector has mis-interpreted the provision of the Policy by taking the view contrary thereto.
5. Mr. Deepak Kumar, the learned JDR for the department, however, supported the finding of the Additional Collector. In his submission, in interpreting the Policy, the items as are popularly and commercially known have to be taken as such. According to him, the same/similar items imported by other manufacturers of laminated sheets have been imported under description of "decorative papers" and as such the item imported is commercially known as "decorative paper" and as such the Additional Collector was justified in holding the same accordingly. The learned JDR also supported the view held by the Additional Collector that "base paper" is a generic term and "decorative paper" being the specific item, vide para 240-B of the Policy Book, the items imported has to be taken as the one falling within Appendix 3, and the Additional Collector has permitted import accordingly.
6. From the record available, there hardly remain any doubt in holding that the item imported is base paper usable for waxing, impregnation and coating. This is apparent from the certificate issued by the Dy. Chief Chemist. The Acting Dy. Chief Chemist who was called during the adjudicating proceedings by adopting some unusual process, the process which an officer acting as a quasi-judicial authority ought to desist from adopting, as the same would go to doubt the impartiality in approach, an essential requirement for the quasi-judicial authority; even does not state that it is not usable as base paper. The following observations made by the adjudicating authority, which the department has not considered worth challenging, make the entire stand of the department as regards identity of the item imported clear :
"The department however does not dispute the suitability of these poster and decorative papers for use as base papers as well. Hence they can be classifiable both as base for impregnation as falling under S. No. 29 of Appendix 5, as well as decorative paper as falling under S. No. 129 of Appendix 3."
What however appears to have weighed with the Additional Collector is the view that base paper is the generic term and decorative paper being a specific entry, the latter should prevail over the former.
7. What, therefore, requires to be considered is whether the said view of the Additional Collector is worthy of acceptance.
8. Mr. Nankani, has submitted that the base paper is the one made of chemical/wood pulp with decorative design on one side or white plain colour having, gram-mage 30 to 150 gms, which can be used for further impregnating by lamination industry and for that purpose the paper should be absorbent. In his submission, such a special quality is not called for in ordinary decorative paper. The support to what has been submitted by the learned advocate, is however available from the test report of the Dy. Chief Chemist. In the remarks column, he has mentioned thus :
"the sample is in the form of sheet of paper with printed design on one side, made of chemical pulp having grammage 119.5. It can be used as base paper for waxing / impregnation."
If all the decorative papers could be used for such purposes, or if the base paper is a generic term, then, there was no reason for the Dy. Chief Chemist, to give the opinion in the way that he has done. Further if the base paper was a generic term, then there could be no need to specify in the Policy - while listing the item at S. No. 29 in Appendix 5, as "base paper for waxing / impregnation / coating". Even under the common parlance, decorative paper is understood as unusable as wall paper, picture paper, and all such papers need not have the specific quality of absorption and capability of sustaining waxing/ impregnating.
9. In this view of the matter, it is not possible to endorse to the view taken by the Additional Collector that base paper is a generic term and decorative paper is a specified item, on the contrary, what appears more probable is that base paper may also be a decorative paper but all the decorative papers need not always be the base paper.
10. The learned JDR submitted that the meaning as understood in commercial field ought to be accepted and the base paper is understood as decorative paper. The submission made however, cannot be sustained as the Policy itself has not understood the base paper as decorative paper and has made distinction between the two. What is laid down in the Policy has to be given appropriate interpretation.
11. Here when the department itself does not challenge the items imported being not the base paper for waxing / impregnating / coating paper, there is no justifiable ground not to permit the import under Appendix 5. The order passed under the circumstances deserves to be set aside.
12. In the result, the appeal is allowed. The order passed by the Additional Collector is set aside. It is directed that import be permitted under Appendix 5 of the Policy AM 1983-84. Consequential reliefs be given.