- (1.) THIS appeal is directed against a judgment and order of Banerjee, J. , dated June 14, 1963, whereby a rule nisi issued on January 5, 1961, was made absolute, a writ of certiorari was issued quashing the adjudication order hereinafter mentioned and a further order was made restraining the appellants from giving effect to the same. Liberty was given to the respondent No. 1 to apply for refund of certain sums paid by it. The respondent No. 1 carries on business as a dealer and importer of paper and paper-boards. In November, 1952, it imported at Calcutta 163 bales of white antique laid printing paper and 143 bales of white glazed news printing paper. It is alleged that the imported goods contained not less than 70 percent, of mechanical wood pulp weighing more than 40 Grams per square metre. These goods were imparted under the then existing O. G. L. No. XXIV in the Import Trade Control Policy Book for the Licencing Period July December, 1952. It is claimed that the said goods were covered by Item No. 44 Part V of Appendix 'a' of the said Book. This Item No. 44 runs as follows: - "44. Printing paper which contains mechanical wood pulp amounting to not less than 70 percent, of the fibre content and which weighs not less than 40 Grams per square meter (news print ). "
(2.) IT is also alleged that the said goods were covered by Entry No. 44 read with the Foot Note to the same in the First Schedule to the Indian Customs Tariff, 36th Issue, which was in force at the material time. The said Entry 44 in the First Schedule and the Foot Note thereunder are as follows: -"44. Paper-all sorts not otherwise specified nature of duty-revenue, standard rate of duty 39. 38 per cent ad valorem. " Foot Note. "under Government of India, Finance Department (Central Revenues), Notification No. 33 dated 22nd June, 1935 as amended subsequently, the following classes of printing paper containing mechanical wood pulp amounting to not less than 70 percent, of the fibre content are exempt from payment of so much of the import duty as is in excess of the amount mentioned against each. " on November 8, 1952, the respondent No. 1 filed two Bills of Entry claiming that the goods were assessable to duty under the said Item 3 in the Foot Note to Entry 44 of the Indian Customs Tariff. The customs authorities allowed the respondent No. 1 to clear a lot of 82 bales out of the consignment of 163 bales, and 92 bales out of the consignment of 143 bales, on the basis of the statements made in the Bills of Entry. Thereafter samples were drawn by the customs authorities from the remaining bales, for ascertaining the correctness of the description of the imported goods as set out in the Bills of Entry, by testing the percentage of mechanical wood pulp and weight per square meter. On such test the goods were found to be according to the description in the Bills of Entry, and were thereupon released on payment of duty in terms of Item No. 3 of the Foot Note to Entry No. 44 of the Indian Customs Tariff.
(3.) ON January 19, 1953, the respondent No. 1 received a Short Levy Notice of Demand for Rs. 10,892-3-0 (Later changed to Rs 9655-2-0) in respect of the said consignment of 163 bales and a similar notice was also served demanding Rs. 8787-6-0 in respect of 143 bales. on March 18, 1953, the respondent was informed in writing that the reasons for the Short Levy Demand was that, on examination the goods were found to be assessable to duty under Item 44 as 'paper other sort at 39. 38 per cent. ad valorem". On August 11, 1953, the respondent No. 1 was informed by the customs authorities that the goods were found to be hard sized paper, suitable for writing. The respondent No. 1 asked the Assistant Collector of Customs to supply it with the sample, on the basis of' which the revised decision as to quality was arrived at. The respondent No. 1 also furnished the customs authorities with an affidavit from the shippers and a test report from the Institute of Pulp and Paper Technology, Grez, Austria, relating to the mechanical wood pulp contents of the paper. On February 14, 1955, the respondent No. 1 was served with a show cause notice in which it was stated that on test, the paper was found to be writing paper for the import of which an Import licence was necessary. In this notice it was alleged that there was a misdeclaration involving a loss of Rs. 9655/- as the paper was assessable to duty at 39. 38 per cent ad valorem. This notice was with regard to 163 bales and a similar show cause notice was also served with regard to 143 bales. Adjudication proceedings followed, and the respondent No. 1 was held guilty of misdeclaration of the said two consignments. It was found that the goods were assessable to duty at 39. 38 percent, ad valorem as writing paper. Personal penalties of Rs. 12,400/- and Rs. 13,750/- were imposed in respect of the two consignments imported.;