Customs, Excise and Gold Tribunal - Delhi
Suja International vs Collector Of Customs on 9 September, 1987
Equivalent citations: 1989(44)ELT387(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. Appellants have imported a consignment of 12 cases declared to contain "Decorative Paper-4495 rolls" valued at Rs. 4,96,431/-. Customs drew samples on two occasions and the Custom House Laboratory declared that the Decorative Paper contained P.V.C. ranging between 66.9 to 77%, the rest being paper. The Custom House, therefore, held that the goods could not be accepted as Decorative Papers but that they were "design embossed plastic sheeting used for wall covering", being a plastic product and falling under 39.01/06 C.T.A. and not 48.01/21, as claimed. Accordingly, they also held that the licence, which was for Decorative Papers, could not be considered as valid for the imports, as consumer goods, were banned for import vide entry No. 77 of Appendix 4 of AM 83 policy. The Assistant Collector, therefore, confiscated the goods and imposed a redemption fine of Rs. 2 lakhs.
2. When the appellant went up in appeal before the Collector of Customs (Appeals), he rejected it holding that the goods are correctly classifiable under Heading 39.01/06 being, according to the Collector (Appeals), high grade imitation leather, used for the manufacture of book covers, curtains, aprons, rain-coats etc.
3. Heard Shri Rajan Sheth, Advocate for the Appellant and Shri Vineet Kumar, SDR for the department.
4. The learned Advocate submits that there is a basic error in approach of the lower authority inasmuch as the imported goods cannot be classified under Heading 39.01706 since they are not plastic materials at all. In this connection he cites the decision of the Government of India in Bhor Industries Ltd. -1980 E.L.T. 368 (G.O.I.).
5. Further, it is emphasised that for classification under 39.01/06 the goods ought to be made entirely of plastics. In making this submission appellant relies on the decision of the Supreme Court in the case of Geep Flashlight Industries Limited v. Union of India and Ors. -1985 (22) E.L.T. 3 (S.C.).
6. The learned SDR reiterates the view taken in the Order-in-Appeal. It is submitted that the product is in fact a wall covering not a wall paper. As regards the decision in the Bhor Industries Limited (supra) it is contended that the judgment was in the context of the Central Excise Act and it was not applicable on the Customs side.
7. We have carefully considered the facts of the case and the submissions made before us. The importers hold a licence which is valid for import of decorative paper. The impugned goods are described in the Bill of Entry as decorative paper. They are also invoiced as such. In the circumstances the onus of proving, that the goods are not covered by the licence and that they are not decorative papers, is on the department.
8. We find that the department had drawn some samples which were tested and re-tested by the Custom House. The report, in each case, refers to the product as decorative paper, and states that the product is "a white sheet composed of P.V.C. embossed design on one side and paper layer on the other. The paper is said to be composed of chemical wood pulps. The percentage of P.V.C. contained of the product was found to range from 70.5 to 77.2%. In the order-in-original it has been held that "the goods get their essential character as wall covering from the design embossed plastic side and the paper is only a backing for the purpose of sticking to the wall". It is further held that "the plastic content on an average is 75% and the paper content is only about 25%. Since the major constituent is not paper and the essential character is not of paper the goods cannot be treated as paper. The same is plastic product. The goods imported are design embossed plastic wall covering...".
9. We are not at all satisfied with the reasoning of the Assistant Collector in holding that the item is classifiable not as decorative paper but as plastic product. The chemical test by the Custom House itself shows that the design is embossed on paper. It is true that the paper is embossed and in this process of embossing P.V.C. has been used in proportion from 70.5 to 77%. However, this does not detract from the fact that the basic material on which the embossing is done is paper. Having seen the product it seems to us that the essential character of the product is derived from the base on which the embossing is done. In such cases it is mis-leading to characterise the product in terms of the proportion of material used for embossing. It is fallacious to say that if the embossing of plastic is limited to lesser percentage than the paper content then the final product can be considered as decorative paper and that if the proportion of plastic increases beyond the paper content it becomes a plastic product instead of a paper product.
10. Admittedly decorative papers include wall paper. Wall paper is a very heavy grade paper which is subject to coating. The use of synthetic resins for coating and embossing is common as it makes the product resistant to greases and oils. Polyvinyl acetate emulsions give better resistance to light and heat. Acrylic emulsions are also used as their stability to light and heat is excellent.
11. The use of the coating and embossing ingredients cannot take away the essential character of the product. The Assistant Collector has chosen to call the impugned goods "design embossed plastic wall covering". We do not know from where he has gathered this expression which, apparently, would not be known to the trade or industry. In fact the identity of the product as wall paper is admitted. It is certainly design embossed, but it is essentially nothing but wall paper embossed with P.V.C.
12. The Collector (Appeals) has held that the product is high grade imitation leather for the manufacture of book covers and that it is widely used as water proof materials for curtains, aprons, rain-coats etc. Despite our repeated queries, the learned SDR has not been able to enlighten us as to what is the basis for the conclusions of the Collector of Customs (Appeals). There is neither any literature nor any technical or trade opinion on record which can justify these findings. Therefore, these have to be rejected.
13. In the light of our above finding the correct classification of the product under the Customs Tariff would be Item 48.01/21 and not 39.01/06.
14. We also hold that the impugned goods are duly covered by the Import licence.
Appeal allowed.