Customs, Excise and Gold Tribunal - Calcutta
M/S East Coast (I) Enterprises vs Commr. Of Customs, Kolkata on 17 January, 2001
Equivalent citations: 2001(131)ELT73(TRI-KOLKATA)
ORDER
Dr.S.N.Busi
1. The dispute in the present appeal relates to correct classification of "wax coated paper tape below 15 cm width in running length' for the purpose of ITC licence. Whereas the appellant claims its classification under Exim Code No.482390 09.90 and as such freely importable, the Revenue classifies the same under Exim Code No.482390 09.10 and being saleable and trading goods require a Special import licence.
2. The appellants M/s East Coast (India) Enterprises, Calcutta, had imported 250 cartons (288 rolls) of Wax coated paper tape of 1 cm (below 15 cm) width in running length valued s.52,912/- and filed Bill of Entry dated 1.6.99 classifying the same under Customs tariff heading 4823.90 claiming "Free" entry under OGL as per Exim Policy 1997-2000. In response to a query slip dated 16.5.99, the appellants clarified that the impugned goods were not consumer goods and as such were freely importable under the OGL. The Adjudicating authority found the goods to be self sealing tape for finishing corsoges, boquets and novalties et cetera and for trading purposes. He, therefore, held that the impugned goods were readily saleable and could be put to use without further processing and as such the same were being consumer goods meritted classification under Exim Code No.482390 09.10 of the ITC Policy for 1997-2000 which required a specific licence for importation of the goods in question. Accordingly, he ordered confiscation of the same under Section 111 (d) of the Customs Act, 1962 giving option to the appellants to redeem the same on payment of a fine Rs.7500/- and imposed a penalty of Rs.2500/- on them. As the appellants failed to succeed in their appeal before the Commissioner of Customs (Appeals), they preferred the present appeal before the Tribunal.
3. Shri Ashok Haldar, ld. Consultant appearing for the appellants, argues that the impugned goods are used as raw materials for making artificial flowers and plants and as such do not satisfy human needs directly as flowers, food or clothing do and hence cannot considered as consumer goods. He submits that was coated paper (in strips or rolls of a width exceeding 15 cm) are freely importable under its specific Exim Code No.48114 001. When the width is below 15 cm, the paper cannot fall under this Exim Code by virtue of Chapter Note 7A and as such falls under Exim Code No.48.23 but cannot be classified under Sub-code No.482390 09.10 because the goods were in rolls and in running length and hence not cut to size or shape and not made up articles of paper having distinct name and identity. He argues that the was coated paper tape in rolls and in running length cannot be called as articles of paper such as trays, cups and the like classified as consumer goods. According to him, running length means that the paper is not cut to size or shape, not given a definite size or shape or name of its own. In support of this plea, the ld. Consultant relied upon the decision of Government of India in Collector Vs. Aysha Export Corporation reported in 1993 (68) ELT 265 (GOI) wherein it was held that laces in running length are not to be regarded as made upon articles being not ready for specific use but requiring stitching etc. after cutting. He argues that in the instant case also the paper is required to be cut, wound and wrapped for making artificial plants and flowers and as such are not articles which can be classified as consumer goods. The ld.Consultant further argues that Explanatory Notes under Heading No.48.23 at page 689 Vol.2 HSN distinguishes between "paper & paper board in strips or rolls of a width not exceeding 15 cm under Group 'A' whereas articles of paper under Group 'C'. He, therefore, submits that the impugned goods in strips or rolls of width below 15 cm cannot be treated/classified as articles of paper cut to size or shape under Sub-code No.482390 09.10. The ld.Consultant pleads that the lower authorities erred in considering the impugned goods as consumer goods by applying wrong criteria such as saleability, trading etc.. He submits that as per para 3.14 of the Exim Policy "consumer goods" means any consumption goods which can directly satisfy human needs without further processing. Any trade goods or raw material for manufacture are readily saleable and can be put to use to produce/manufacture some article but that does not make all trade goods in the market into consumer goods. The policy has categorically stated that the consumer goods must be consumption goods. It has distinguished between capital goods, consumables, raw materials and consumer goods. In this context, he relies upon the decision of the Tribunal in the case Trans Freight Containers Ltd. Vs. Commissioner of Customs reported in 1998 (102) ELT 410 wherein it was held : "They must be consumption goods, they must directly satisfy a human need, they must satisfy such a need without further processing, i.e., in the form in which they are imported. The term "consumption goods" is not defined any where in the Policy. Going by ordinary meaning, consumption goods would mean the goods which are used up, exhausted or destroyed in the process of utilization. (By extension to the definition "consumer Durables" which would not be consumption goods in the manner so described have been included in the definition. We are however not concerned with this)."
4. Shri R.K.Roy, ld.JDR appearing for the Revenue, reiterates the reasoning contained in the order impugned.
5. After carefully considering the submissions of both sides, I am inclined to agree with the plea of the ld.Consultant that the impugned goods merit to be classified under Exim Code No.482390 09.90 and as such freely importable under OGL. This view is based on the fact that the impugned goods cannot be considered as consumer goods because, although they are traded/saleable, the same are used for manufacture of artificial plants and flowers. As the impugned goods in the form in which they are imported do not satisfy the human needs, it would be improper to put them in the category of "consumer goods". The case law cited by the ld.consultant supports his arguments.I am, therefore, of the opinion that the lower authorities have misclassified the same under Exim Code No.482390 09.10 which consequently led to unwarranted confiscation of the impugned goods and unjustified imposition of penalty. Hence, the impugned order needs to be set aside. Ordered accordingly.
6. In the result, the impugned order is set aside with consequential relief to the appellants.