Advocated By :   None, for the Appellant. 

Shri S. Dass, JDR, for the Respondent.

[Order per : S.K. Bhatnagar, President]. - This is an appeal filed with reference to order of Collector (Appeals) dated 12-7-1993.

2. A notice for today’s hearing was sent to the appellant and duly served on him. In spite of it, neither any appearance has been caused nor there is any request for adjournment or otherwise.

3. We have perused the records and heard ld. D.R.

4. It is observed that the appellants have submitted, inter alia, that

(i)      they are manufacturing paper and paper boards of different varieties. Their factory is an approved industry under the Industrial Development and Regulation Act. The raw material needed for the appellant’s factory is waste paper.

(ii)     They had imported a consignment of the letter waste (paper waste) from New York for their own consumption in its factory and sought assessment of the said goods as waste paper classifiable under tariff item 4707.90 as per the Customs Tariff and eligible to assessment as per Notification No. 219/84 read with Notification No. 124/92.

 (iii)   On examination after arrival of the goods the Customs authorities found that 1392 boxes contained printed envelopes (waste) and 111 boxes were found to contain blank envelopes. These envelopes were not serviceable envelopes and were imported because of the fibre content and they have no commercial value as envelopes. The appellant has been importing such envelopes from 1985 onwards and has been enjoying assessment of the concessional rate all these years.

 (iv)   The Deputy Collector held that the goods fall under heading 4817.10 as envelopes and that the benefit of Notification No. 219/84 is not available to the appellants and the imports of the said goods required a licence.

 (v)    A request for the mutilation of said goods was also refused.

 (vi)   The adjudicating authority confiscated the goods but gave option to redeem the same on payment of a redemption fine of Rs. 40,000/-.

 (vii)  The Collector of appeals rejected the appeal.

5. According to the appellants, (i) the authorities have overlooked that the goods were supplied against the appellant’s orders for supply of ‘letter waste’ which is one of the items appearing in the Notification No. 219/84 and eligible for concessional rate of duty.

(ii)     on 29-9-1992 they had given necessary undertaking to produce the end use certificate to prove that the goods are meant for actual consumption by the appellant himself.

Production of such end use certificate is only to avoid any possible misuse of the goods imported.

 (iii)   The envelopes imported had lot of printed matters on them and as such the said envelopes cannot be put to any commercial use by the appellant and the only possible use is to use it as raw material for making pulp in view of its fibre content.

 (iv)   The authorities have over looked that the report of the appraiser shows that out of the total quantity of 19.391 M.T. 17.391 M.T. represented waste (printed envelopes) and 1.6 M.Ts. as blank envelopes but still the appellate Authority treated the entire consignment as envelopes fit for commercial.

(v)     The authorities should have classified the goods as ‘letter waste’ but indulged in.

6. The appellant has, further, submitted that

(i)      In respect of ‘letter waste’ where exactly similar goods were imported earlier by them, he had given end use undertaking and subsequently the authorities had cancelled the undertaking when the end use certificates were produced.

(ii)     It had been emphasised that they had placed orders for import of letter waste only and accordingly declared the goods as in the bill of entry and claimed benefit of Notification 219/84 and OGL. Furthermore, after importation, they had offered mutilation and undertaking to produce end-use certificate to prove that the goods were meant for actual consumption by the appellant himself in his plant to manufacture paper and paper boards. But the authorities did not accept the view point.

(i)      the authorities have erred in basing their conclusion.

(ii)     it was also their submission that in the case of similar consignments imported earlier the department had accepted an undertaking for producing the end-use certificate and cancelled the same after such certificate was produced.

7. The appellants have also contended that the imposition of redemption of Rs. 40,000/- is excessive.

8. Ld. D.R. drew our attention to the Order-in-Original and Order-in-Appeal. He emphasised that the facts, which have come to light during the physical examination of the goods, were important, as the description in the bill of entry did not tally with the goods, and the consignment on examination was found to contain envelopes of both printed and blank and not waste paper or letter waste is declared. The imported items were, therefore, classifiable under tariff heading 4817.10 and not 47.07 and the benefit of notification 219/84 could not be extended. Furthermore, in the circumstances of the case, the goods were liable to confiscation and imposition of redemption fine was justified.

9. We have considered the above submissions. We observe that the ld. D.R. is correct in drawing attention towards the result of examination in the docks. The consignment, in the form in which it was imported and presented for assessment, was found to contain printed envelopes and blank envelopes and such articles are classifiable under heading 4817.10 and were not covered by the notification 219/84 and required licence. The argument of the appellant that they had placed an order for supply of letter waste, does not advance their cause because the customs are concerned only with the goods which had actually arrived (irrespective of the order).

10. Insofar as the use of the goods after importation was concerned, unless it is required in terms of the language of the heading or the notification, it cannot be considered as relevant for the purpose of assessment and the appellants had not shown that it was so required in terms of the heading and notification, in question.

11. The importers had said that they had offered mutilation but the acceptance or otherwise of such an offer was in the discretion of the authorities. In any case, even if accepted, it could not have changed the classification because the classification depends upon the condition of the goods in which they are imported and is not affected by any change made subsequent to importation.

12. The past practice, the offer of mutilation or of bond for end-use and the attempt to show their bona fides could help the appellants only to a limited extent. They could neither change the classification nor make them eligible for the benefit of notification and for clearance under OGL. They could only be taken into account for considering the amount of penalty required to be imposed.

13. In this respect, we find there is some substance in the appellants’ submission that the totality of facts and the circumstances should be taken into consideration and even fine and penalty have to be proportionate to the offence and we take note in this connection that the authorities themselves have not imposed any penalty.

14. Looking to the totality of facts and circumstances of the case, we consider the fine was rather on higher side and reduce the same to Rs. 20,000/-. It is ordered accordingly and the appeal is disposed of in the above terms with consequential relief due to the appellants.