1996(11)LCX0139
IN THE CEGAT, COURT NO. IV, NEW DELHI
Shri G.R. Sharma, Member (T) and Mrs. Archana Wadhwa, Member (J)
A.G. DAFTARY
Versus
COMMISSIONER OF CUSTOMS, BOMBAY
Final Order No. 693/96-D, dated 21-11-1996 in Appeal No. C-1419/89-D
Cases Quoted
Soni Enterprises v. Collector — Order Nos. 161 & 162/1989-D [Para 2]
Hariram Goel v. Collector — 1993(04)LCX0077 Eq 1994 (069) ELT 0715 (Tribunal) [Paras 2, 5]
Advocated By : Shri L.P. Asthana, Advocate, for the Appellant.
Shri B.K. Madan, SDR, for the Respondents.
[Order per : Archana Wadhwa, Member (J). - The appellant herein, M/s. A.G. Daftary imported 42 bundles containing 251 pieces of Australian White Wood Logs valued at Rs. 4,19,235.00 (C.I.F.). The appellant claimed the clearance of the said goods as wood roughly squared and half-squared but not further manufactured by classifying the same under Heading : 4403.99 of the Customs Tariff Act, 1975 and by claiming the benefit of Notification No. 160/88-Cus., dated 13-5-1988. Vide Serial No. 6 of the said Notification, wood of the description as mentioned therein was exempted from so much of the Auxiliary Duties of Customs calculated at the rate of 5% of the value of the goods. In the Bill of Entry No. 4868, dated 14-9-1988, the benefit of the concessional rate of duty under the said Notification was claimed by the appellant. As the Customs Authorities entertained a view that the goods in question were not wood roughly squared or half-squared as the same have been reported to be sawn lengthwise on two sides, they are not entitled to the benefit of the Notification and the description of the goods have been mis-declared by the appellant calling for their confiscation and penal action against the appellant. Accordingly, a show cause notice dated 29-11-1988 was issued under Section 124 of the Customs Act, 1962 which after due adjudication resulted into the Order passed by the Additional Collector of Customs vide which he denied the benefit of Notification No. 160/88-Cus., dated 13-5-1988 to the appellant but refrained from confiscating the goods or imposing any personal penalty on the appellant. The said Order is impugned before us.
2. Appearing on behalf of the appellant, Shri L.P. Asthana, learned Advocate submitted that the dispute revolves around the fact whether the timber logs in question cut on two sides and untouched on the rest of the sides, can be called wood roughly squared but not further worked upon and hence entitled to the benefit of Notification. A sample of the log duly sealed by the Customs was produced before us. Before breaking the same open, seal was duly checked by the S.D.R. as also by the representative of the Department especially present for the purpose. Drawing our attention to the goods, it was clarified by the learned Counsel that logs have been sawned on two sides only and there are barks on two sides because these sides have been totally untouched. He, further, stressed that the goods have not been subjected to fine sawing but only coarse sawing which has been done for the purpose of facilitation of transportation and freight reduction. Our attention was also drawn to CCCN Explanatory Notes of Heading : 43.03 and stated that the imported goods fall within the definition of the Explanatory Note and as such entitled to the benefit of Notification No. 160/88-Cus. supra. He also relied upon two decisions of the Tribunal in the case of M/s. Soni Enterprises & Others v. Collector of Customs, Bombay being Order Nos. 161 & 162/1989-D and M/s. Hariram Goel & Co. v. Collector of Customs, Visakapatnam being Order Nos. 130 to 134/93-D, dated 2-4-1993. It was his prayer that in view of the above two decisions of the Tribunal extending the benefit to the goods at the same time, the appeal under consideration is also entitled to be allowed.
3. Arguing on behalf of the respondent Commissioner, Shri B.K. Madan reiterated the reasoning adopted by the Collector and submitted that the benefit of Notification has been rightly denied to the appellant as the goods have been finely sawn on sides and as such, had lost their identity as pieces roughly shaped.
4. We have considered the submissions made by both sides and have perused the records. The sample of log provided before us clearly depicts the presence of bark and rough areas on two sides. By coarse sawing the wood on two or four sides for the easy transportation, will not take away the same from Heading No. 44.03. It is only the fine sawing with dimensional accuracy which will convert the wood into planks and beams etc. The Collector has discarded the appellant’s claim on the ground that wood is sawn lengthwise alongside the general direction of the grain and as such comes under Explanatory Note : 44.07 and not entitled to exemption. However, what he has failed to appreciate is that this sawing is not on all the sides and as such, presence of bark on two sides is the factor which will keep the log under Heading : 44.03. The Collector in Paragraph : 16 of the impugned Order has observed as under :-
“..... No doubt these are barks on one or two sides but is because these sides have been totally untouched. These are not traces of barks due to coarse sawing but no sawing has been done and hence barks or rough areas remain as they were.”
5. We also observe that the issue is no more res integra and has been decided in favour of the appellant by the two decisions of the Tribunal cited by the appellant. Para 19 of the Tribunal’s judgment in the case of M/s. Hariram Goel & Co. is reproduced as under :-
“19. As can be seen from the above description, sap wood is outer, live wood of the trees. The said sap wood unless treated, it gets decayed and for the purpose of transportation of the wood logs to the saw mills, the sap wood and the outer chips are removed either by sawing by means of axe or adze, or by coarse sawing to form wood of roughly rectangular (including square, cross section). The NSN Explanatory Notes further states that roughly squared wood is characterised by the presence of rough areas or bark traces. While the explanatory notes for wood sawn under sub-heading 44.07 as noted above, has clearly stated that the wood and timber falling under this heading would have been sawn or chipped along with the general direction of the grain or cut by slicing or pealing. The wood is obtained by the use of chipping machines and which has been chipped to extremely accurate dimensions - a process which results in a surface better than that obtained by sawing and thereby renders subsequent planning unnecessary. Therefore, it has to be seen whether the impugned goods have fulfilled the specified criteria laid down under the HSN Explanatory Notes for sawn wood which has got the pursuasive value for the purpose of classification. ...”
6. As seen by us from the sample produced by the appellant before us, we find that the wood logs are untouched on the two sides. This fact has also been admitted by the Collector. Applying the ratio of the above two decisions of the Tribunal to the facts of the instant appeal, we hold the goods to be wood roughly squared and half-squared but not further manufactured and entitled to the benefit of Notification No. 160/88-Cus.
7. Accordingly, impugned Order is set aside and the appeal is allowed with consequential relief, if any.
Equivalent 1997 (92) ELT 584 (Tribunal)