2007(06)LCX0054

IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri P.G. Chacko, Member (J) and P. Karthikeyan, Member (T)

Farwood Industries (P) Ltd.

Versus

Commissioner of Customs, Chennai

Final Order No. 807/2007, dated 29-6-2007 in Appeal No. C/573/2000

Advocated By -

Shri Aashish Kumar, Advocate, for the Appellant.
Shri T.C. Rajadas, SDR, for the Respondent.

[Order per : P.G. Chacko, Member (J)]. -

The appellants had filed bill of entry dated 24-4-2000 for clearance of goods described as BEECH WOOD -UNEDGED, STEAMED in three different dimensions (thickness) viz. 26 mm - 40 mm - 51 mm; 60 mm; and 80 mm and classified under SH 4403.92 of the First Schedule to the Customs Tariff Act attracting duty @ 5% + 10%. The connected invoice described the wood as 'roughly squared'. Upon physical examination by the Customs authorities, the wood was found to be roughly sawn lengthwise. It appeared to be classifiable under Heading 44.07 attracting duty @ 25% + 10%. The authorities took the view that the appellants had misdeclared the description of the goods with the intent to evade payment of appropriate duties of Customs. As the party waived show-cause notice, the Commissioner of Customs took up the case for adjudication, and, after hearing them, passed the impugned order, wherein the goods were classified under Heading 44.07 and confiscated under Section 111(m) of the Customs Act with option for redemption against payment of fine of Rs. 1,00,000/-. A penalty of Rs. 10,000/- was also imposed on the party under Section 112(a) of the Act.


2. After examining the records and hearing both sides, we note that the dispute essentially pertains to classification of the goods. The item imported by the appellants is 'beech wood', which was described in the invoice as 'roughly squared' and in the bill of entry as 'unedged and steamed'. The bill of entry separately mentioned 'beech wood' of three different dimensions (thickness) as indicated above. Heading 44.03 covered 'wood in the rough, whether or not stripped of bark or sapwood, or roughly squared'. SH 4403.92 covered beech wood of this description. Heading 44.07 as claimed by the Revenue covered 'wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end jointed, of a thickness exceeding 6 mm'. SH 4407.92 covered beech wood of this description. Learned Commissioner took note of the examination report which indicated that the wood was sawn lengthwise/rectangled wood. He also observed that the wood was of extremely uniform thickness as per the invoice. On this basis, he concluded that the subject goods satisfied the terms of the HSN Explanatory Notes under Heading 44.07 to be classified under the said Heading. We have also perused the HSN Notes under Heading 44.03. According to these notes, Heading 44.03 includes roughly squared wood which consists of trunks or sections of trunks of trees, the round surfaces of which have been reduced to flat surfaces by means of axe or adze or by coarse sawing, to form wood of roughly rectangular (including square) cross-section. This Heading excludes wood cut into the form of planks, beams etc., which are classifiable under Heading 44.07 or 44.18. HSN Notes under Heading 44.07 say that this Heading excludes wood roughly squared, e.g. by coarse sawing (Heading 44.03). Learned Counsel has claimed that the goods imported by the appellants was beech wood of roughly rectangular cross-section on account of coarse sawing and, therefore, it requires to be classified under Heading 44.03 only. We note that, according to the examination report, the goods were roughly sawn lengthwise/rectangled wood. This report seems to support the counsel's claim. It appears from the HSN Notes under Heading 44.03 that wood of roughly rectangular/square cross-section having attained this form on account of coarse sawing is classifiable under this Heading. Further, it appears from the HSN Notes under Heading 44.07 that this Heading excludes wood roughly squared by an activity such as coarse sawing. These Notes also indicate that such wood is classifiable under Heading 44.03. The examination report describes the goods as 'roughly sawn wood'. Apparently, what is referred to as 'coarse sawing' in the HSN Notes is the same as 'rough sawing' found in the examination report. HSN Notes under Heading 44.07 indicate that the wood falling under this Heading must be of accurate dimensions like uniform thickness. 'Rough sawing' cannot yield such accurate dimensions.


3. In the light of our findings recorded above, the decision of the Commissioner cannot be sustained. Accordingly, the impugned order is set aside and this appeal is allowed.


(Operative portion of the order was pronounced in open Court on 29-6-2007)

Equivalent 2007 (215) ELT 0068 (Tri. - Chennai)

Equivalent 2007 (082) RLT 0865 (CESTAT- Che.)

Equivalent 2007 (122) ECC 0219

Equivalent 2007 (148) ECR 0219 (Tri.- Chennai)