(1.)Rakesh Kumar, Member (T)
(2.)THE facts leading to filing of this appeal by Revenue, in brief, as under:
1.1 The respondents are manufacturer of paper including kraft paper by recycling waste paper and for this purpose, they import waste paper subject to actual user condition at a concessional rate under notification No. dated 1 -3 -2002. Serial No. 152 of notification No. prescribes concessional rate of duty for the goods heading 4707 (waste paper) for use in the manufacture of paper/paperboard or newsprint. The appellant during July, 2011 imported eight consignments declared to be containing "waste paper -used kraft paper" and filed eight bills of entry for their clearance. The total CIF value declared for these eight consignments of paper waste was Rs. 52,47,174/ - and the total quantity imported was 272.793 MTs. The goods had been imported at ICD Concor, Kanakpura -Jaipur where the bills of entry had been filed. The goods were examined by the officers of the Customs along with the officers of ICD Concor -Jaipur. According to the department, the goods in the said containers were found in the form of rolls of kraft papers of different size 4 to 5 feet in width and while 15 to 25 per cent paper was in waste form, the remaining appeared to be fresh and serviceable kraft paper. The department was of the view that the quantity of paper which was fresh karft paper, would not be eligible for exemption under Notification No. . The department also drew samples from the imported consignments and got the same tested through CPPRI -Saharanpur and the report of CPPRI -Saharanpur indicated that the paper imported cannot said to be waste kraft paper. The department was accordingly of the view that the imported paper, which is in good condition, is not only ineligible for duty exemption under notification No. , but its declared transaction value is also on lower side. The matter was adjudicated by the Additional Commissioner vide Order -in -Original dated 31 -1 -2014 by which the Additional Commissioner while accepting the declared transaction value held that the goods are not eligible for duty exemption under Notification No. . and on this basis, he confirmed duty demand of Rs. 9,23,079/ - under Section 28 of the Customs Act, 1962 along with interest on it under Section 28AB. Besides this, he also ordered confiscation of 230.98 MTs of serviceable kraft papers valued at Rs. 44,42,078/ - under Section 111(m) of Customs Act, 1962 with option to be redeemed on redemption fine of Rs. 10,00,000/ -. Besides this, he also ordered confiscation of the waste kraft paper weighing 41.809 MTs, of waste paper under Section 119 of the Customs Act, 1962 with option to be redeemed on redemption fine of Rs. 1,00,000/ - as the same was held to have been used for concealing the goods kraft paper which was alleged to have been imported in the guise of waste paper. He also imposed penalty of Rs. 9,23,079/ - on the appellant. The appellant filed an appeal to the Commissioner (Appeals) against this order of the Additional Commissioner. Commissioner (Appeals) vide Order -in -Appeal dated 27 -2 -2013 set aside the Additional Commissioner's order and allowed the appeal. Against this order of the Commissioner (Appeals), this appeal has been filed by the Revenue.
Heard both sides.
Sh. M.S. Negi, ld. DR assaulted the impugned order by reiterating the ground of appeal in the Revenue's appeal and pleaded that the goods imported by the respondent consist of rolls of kraft paper; that while the goods were declared in the bills of entry as waste paper/used kraft or waste paper/used brown kraft, on examination, only 41.8096 MTs of the paper was found to be waste paper and the remaining quantity of 230.983 MTs was found to be fresh/serviceable paper; that the samples of the paper which appeared to be fresh kraft paper were drawn and were tested by CPPRI -Saharanpur whose report indicated that tensile strength and bursting strength of the sample paper was comparable with these parameters of prime quality kraft paper; that the kraft paper, in question, can be used for various purposes including making grocery bags, wrapping paper, bituminized paper, etc.; that the same cannot be called waste or scrap of paper and paper -board; that the Commissioner (Appeals) has erred in holding that the paper, in question, is waste and scrap of paper, that just because, the Adjudicating Authority has accepted the declared value of the consignment, the goods cannot be treated as waste paper, as this fact has to be ascertained on basis of the actual condition of the goods, that just because the pre -shipment inspection certificate and other documents described the goods as waste paper as per the internationally accepted parameters, these goods cannot be treated as waste paper when the physical examination of the goods shows that the same are serviceable paper which can be used for various purposes like, making of grocery bags, wrapping paper, bituminized paper etc.; that besides the report of CPPRI -Saharanpur, the report of Director of Kumarappa National Handmade Paper Institute -Jaipur, M/s. Nisha Enterprises -Jaipur and the market enquiry also shows that the goods, in question, are serviceable kraft paper which would be useful for various purposes and cannot be considered as waste and scraps of paper; that Commissioner (Appeals) has wrongly relied upon the end use certificate issued by the Jurisdictional Assistant Commissioner of Central Excise, Alwar as evidence that the goods were waste paper; that this certificate has not been issued on the basis of any type of physical verification, that the said goods have actually been used in the manufacture for the specified goods and that in view of the above submissions, the impugned order is not correct.
(3.)SH . A.K. Sharma, Senior Vice -President of the respondent representing the respondent defended the impugned order by pleading that the goods imported were waste and scrap of kraft paper; that this fact is clear from the photograph of the goods which have been placed on record; that the goods imported were in the form of rolls of assorted size and width and from the photograph it is clear that the rolls were damaged rolls and the papers in those rolls could not be used for writing or printing purposes; that pre -shipment inspection of the goods also certifies the goods as waste and scrap of paper, that just because the tensile strength and bursting strength of the samples of paper were found to be comparable with these parameters of the fresh kraft paper it cannot be concluded that the goods imported by the respondent were of prime quality fresh kraft paper, when the condition of the goods, as is clear from the photographs, shows that the goods are not fresh/prime quality kraft paper; that just because in each roll some quantity of paper was found to be serviceable paper, the consignments cannot said to be of the fresh/prime quality kraft paper; that when the Additional Commissioner has accepted the declared value of the goods, it is totally incorrect to accuse the respondent of having imported fresh/prime quality paper by mis -declaring the same as waste paper, as price of the fresh/prime quality kraft paper and the waste paper would be totally different; that respondent have used the paper for manufacture of kraft paper and the end use of the goods has been certified by the Jurisdiction Assistant Commissioner; that Tribunal in the case of Mohit Paper Mills v. C.C.E. reported in : 2012 (285) E.L.T. 379 (Tri -Del) has held that when the consignment of the waste paper was found to be containing some good quality paper in rolls and that this discrepancy was noticed by the Customs but the Customs did not change the value, and as such accepted the declared value of the goods, the department cannot make out the case of mis -declaration of description, that the ratio of this judgment of the Tribunal is squarely applicable to the facts of this case and that in view of the above submissions, there is no infirmity in the impugned order.