Etcho Process International vs Commr. of Cus., New Delhi>1999(10)LCX0150

1999(10)LCX0150

IN THE CEGAT, COURT NO. IV, NEW DELHI

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

ETCHO PROCESS INTERNATIONAL

Versus

COMMR. OF CUS., NEW DELHI

Final Order No. 941/99-D, dated 29-10-1999 in Appeal No. C/338/97-D

Advocated By : Shri K.K. Anand, Advocate, for the Appellant.

Shri R.S. Sangia, JDR, for the Respondents.

[Order per : G.R. Sharma, Member (T)]. - In the impugned order ld. Commissioner demanded differential duty of Rs. 6,89,540/- appropriated an amount of Rs. 3 lakhs deposited by the appellants as security and also imposed a personal penalty of Rs. 2 lakhs. Being aggrieved by this order, the appellants have filed the captioned appeal.

2. The appellants imported a consignment of goods declaring them as DECALCOMANIA PAPERS in the Bill of Entry. The Department alleged that Explanatory Notes under Chapter Heading 4908.10 explains

“Transfers (decalcomanias) consist of pictures, designs or lettering in single or multiple colours, lithographed or otherwise printed on absorbent......”

3. Accordingly, the importer was asked to explain as to why the paper imported by them should not be classified under Heading 4908.90 as against their claim of its classification under Heading 4908.10. The second issue that was raised by the Department was that the imported items were not covered by OGL provisions and required a specific licence.

4. The appellants replied that similar product was imported by them earlier also as actual users which was classified by the Department under Chapter Heading 4908.10 and since there was no change either in the process of manufacture or use of the product in terms of the import, therefore, the product should have been classified by the Department as was earlier done. On the question of obtaining a specific licence, the importers again submitted that their product was covered by OGL. Moreover, they were actual users and therefore, no specific licence was noted. It was, therefore, pleaded that since the goods were earlier classified under 4908.10 and there has been no change in the goods and the goods were cleared without insisting on licence, therefore, it was prayed that the SCN may be dropped and the proceedings may also be dropped.

5. After careful consideration of the submissions made, the ld. Commissioner confirmed the demand of differential duty. He also appropriated an amount of Rs. 3 lakhs deposited as security and imposed a penalty of Rs. 2 lakhs.

6. Arguing the case Shri K.K. Anand, ld. Counsel submits that the appellant is actual user; that the appellant had been importing consignment of the same paper declared as decalcomanias paper. He submitted that the Department on the earlier two occasions had cleared the consignment classifying it under Chapter sub-heading 4908.10 and without insisting on any licence meaning thereby that they were taking that the goods were permitted to be imported under OGL. He submits that since the Department had earlier classified those goods as claimed by them, no reason had been shown as to why the same goods have now been proposed and actually classified under Chapter Heading 4809.90.

Ld. Counsel agitated the findings an import licence as held by the ld. Collector. He submits that the goods were the same as imported earlier, that the Department had not insisted for any licence and therefore, there was no question of asking for any licence when the third consignment was imported. He submits that if the paper was considered as printing and writing paper then the paper should have been permitted to be imported under OGL. He submits that they had contended before the authorities below that the goods were the same as were permitted, to be cleared under those Bills of Entry; that their process of manufacture was the same and that they were the actual users of the product imported. He referred to the policy, for the period and submitted that certain items which included their product also were permitted under OGL even if classifiable under Chapter sub-heading 4809.90. He, therefore, submits that confiscation of the goods and imposition of penalty was not at all warranted and prays that the appeal may be allowed.

7. Shri R.S. Sangia, ld. DR submits that the present consignment came up for examination. It was found that Explanatory Notes under Chapter Heading 4908.10 stipulated Transfers (Decalcomanias) consist of pictures, designs or lettering in single or multiple colours, lithographed or otherwise printed on absorbent etc. He submitted that since the product did not confirm to the requirement of Chapter sub-heading 4908.10, therefore, the authorities rightly classified it under Chapter sub-heading 4809.90.

On the question of the requirement of a licence ld. DR submits that the product was decalcomanias paper and papers classifiable under the aforesaid heading. He submits that the ld. Collector examined this aspect in detail and came to the conclusion that in the absence of any samples of the old product imported by the appellants, it was not possible to say that the product imported earlier was identical to the product now imported. He submis that thus the plea of the importer that the goods were the same as were imported earlier is not supported by any acceptable evidence. He, therefore, prays that the appeal may be rejected.

8. We have heard the rival submissions. We have also perused the case law cited and relied upon by the Counsel for the appellant. We find that two issues have come up for decision in this case. The first issue is that of classification and the second issue is that of requirement of the specific licence.

On the first issue we find that HSN Notes under chapter sub-heading 4908.10 stipulate that there should be some sorts of printing visible or otherwise in the decalcomania. In the instant case we note that there was no printing on the paper imported visible to the naked eye. Ld. Counsel argued that there was some invisible printing or base printing, however, he could not show it by any method as to how this printing could be seen. Since there was no printing visible to the naked eye nor there was any evidence placed to show that there was some invisible printing on the imported product, we hold that the product is classifiable under Chapter sub-heading 4809.90.

9. On the question of requirement of a licence, we note that the appellants have claimed that the product was permissible to be imported under OGL. We have seen the relevant entry in the Import Export Policy for the year April, 1990 to March, 1993 though some entries were pointed out by the ld. Counsel for the appellant. On perusal of those entries, we found that the paper imported by the appellants was not covered by those entries. Since the appellants could not produce substantive evidence that the product imported was covered by the OGL and since some of the products falling under Chapter 4809.90 require a licence, we hold that the licence was required and therefore, confiscation of the goods and imposition of penalty are sustainable in law.

10. However, having regard to the facts of the case, specially the fact that two consignments of goods claimed to be identical were cleared by the Customs authorities earlier, we hold that both the redemption fine and the penalty are on the higher side. The redemption fine is, therefore, reduced to Rs. One lakh and the penalty to Rs. 50,000/-.

11. But for the above modifications, the impugned order is uphold and the appeal is disposed of accordingly.

Equivalent 2000 (115) ELT 132 (Tribunal)