1999(03)LCX0242
IN THE CEGAT, COURT NO. II, NEW DELHI
S/Shri P.C. Jain, Vice President and S.S. Kang, Member (J)
YOGI INDUSTRIES PVT. LTD.
Versus
COLLECTOR OF CUSTOMS, CALCUTTA
Final Order No. 32/99-B2, dated 9-3-1999 in Appeal No. C/501/90-B2
Cases Quoted
Indian Thermoplastics (P) Ltd. v. Collector — 1996(06)LCX0060 Eq 1996 (087) ELT 0536 (Tribunal) — Referred [Para 4]
Northern Plastics Ltd. v. Collector — 1995(12)LCX0030 Eq 1996 (083) ELT 0132 (Tribunal) — Followed [Paras 4, 10]
Advocated By : Shri T. Vishwanathan, Advocate, for the Appellant.
Shri S.N. Ojha, JDR, for the Respondent.
[Order per : S.S. Kang, Member (J)]. - The appellant filed this appeal against the order-in-original dated 29-9-1989 passed by the Collector of Customs, Calcutta.
2. Brief facts of the case are that appellant made import of a machine and declared the same as “Fully Programmable Paper cutting machine Model 735". The appellant claimed the classification of the machine under Heading 8441 of the Customs Tariff and claimed that machine is under the O.G.L. under Sl. No. 11(G) Appendix I Part B of the Import Policy 1985-88. The machine was assessed accordingly and was cleared under O.G.L.
3. Thereafter a show cause notice was issued on 8-3-1989 alleging that machine is classifiable under 90.10 of the Customs Tariff and machine was also not eligible under O.G.L. It was also alleged that value of the machine was also declared less than the comparable price of identical goods imported by other importers. After adjudication the Collector held that the machine in question was a slitter rewinder machine and is classifiable under 9010.20 of the Customs Tariff. Hence the appellant misdeclared the goods and the machine was not under the Open General Licence. The machine was ordered to be confiscated and option to redeem the machine on payment of redemption fine of Rs. 2 lakhs was given to appellant. Penalty of Rs. 2 lakhs was also imposed upon the appellant under Section 112 of Customs Act. The charge of under valuation was dropped.
4. Ld. Counsel appearing on behalf of the appellant submits that appellant placed order of fully programmed paper cutting machine and the supplier sent the same machine giving the same description in the invoice. He submits that in the trade this machine is also known as multipurpose stiller rewinder but the basic function of the machine is to cut the paper. He relied upon the decision of the Tribunal in the case of Northern Plastics Ltd. v. Collector of Customs reported in 1996 (083) ELT 132. He submits that in this case the Tribunal in respect of same machine held that stiller cum rewinding machine is internationally recognised as paper cutting machine. He therefore, submits that the appellant had correctly describe the machine before the Customs authorities as Fully programmable paper cutting machine. He submits that this decision was followed by the Tribunal in the case of M/s. Indian Thermoplastics (P) Ltd. v. Collector of Customs reported in 1996 (087) ELT 536.
5. In respect of classification, he submits that sub-heading 8441.10 covers the paper cutting machine. He submits that Heading 9010.20 of the Customs Tariff covers “other apparatus and equipment for photographics (including cinematographic laboratories megaloscopees (sic). He further submits that the supplier vide letter dated 27-6-1989 clarified that the machine in question cannot be used for cutting films. Therefore he submits that the machine is not covered under Heading 9010.20 of the Tariff.
6. He also submits that show cause notice was issued beyond the period of six months from the payment of duty. He further submits that at the time of clearance of goods all the relevant documents which are now relied upon by the Revenue, were submitted by appellant and the goods were cleared after verifying description of goods as the basis of relevant documents. Hence there is no suppression on the part of appellant. He therefore, prays that the appeal be allowed.
7. Heard Shri S.N. Ojha, JDR who reiterates the findings of the Collector of Customs.
8. In the present case, two issues are involved :
(i) Whether the imported goods are classifiable under sub-heading 8441.00 of the Customs Tariff as claimed by appellant or under Heading 9010.20 as assessed by the Revenue;
(ii) Whether the imported goods are covered under the O.G.L.
9. The contention of the appellant is that the machine is cutting machine and is covered under Heading 8441.10 of the Customs Tariff. Heading 8441 of the Customs Tariff reads as under :
“other machinery for making up paper pulp, paper or paperboard including cutting machine of all kind.”
Sub-heading 8441.10 reads as under :
“Cutting Machines”
The Revenue assessed the machine in question under Heading 9010.20 of Customs Tariff. Heading 9010.20 reads as under :
“other apparatus and equipments for Photographic (including cinematographics laboratorics negatoscopes)”
10. The appellant had given the description of the machine as “fully programmable paper cutting machine”. The supplier of the goods vide letter dated 27-6-1989 clarified that the machine in question cannot be used for cutting films. Therefore, we find force in the arguments of the appellant that machine is only paper cutting machine. The Tribunal in the case of Northern Plastics Ltd. v. Collector of Customs reported in 1996 (083) ELT 132 in respect of the same machine held that in international market the slitter-cum-rewinding machine is also recognised as paper cutting machine. The Tribunal held as under :
“2. We have heard Sh. L.P. Asthana, learned Advocate for the appellants and Sh. D.S. Malik, learned DR for the respondents. The appellants M/s. Northern Plastic Ltd. are the actual users engaged in slitting/confectioning of Photo-sensitized paper/materials and duly registered with the Directorate of Industries, Uttar Pradesh as a small scale industry. The appellants imported one second hand fully programmed Paper Cutting machine and three knife trimmers with associated tools and accessories from England vide Invoice dated 12-9-1985 and Bill of Entry was filed on 18th June, 1986 claiming clearance of the machine under OGL as a fully programmed paper cutting machine with three knife trimmers. The case of the department is that paper cutting machine is different from the machine imported by the appellants as ”obviously the definition of slitter-cum-rewinder is different from that of a paper cutting machine and is limited solely to the stage of slitting and rewinding". We agree with the learned Counsel having regard to the Explanatory Notes to Heading 84.33 and 84.41 that slitter-cum-rewinder is included in the Heading “Paper cutting machines”. Heading 84.33 of the CCCN reads as follows :
`Paper or paper board cutting machines of all kinds; other machinery for making up paper pulp, paper or paperboard’
Heading 84.41 of the HSN reads as follows :
`Other machinery for making up paper pulp, paper or paperboard, including cutting machines of all kinds’.
Explanatory Notes 84.33 of the CCCN provides that the Heading includes “slitter-reelers” for unwinding reels of paper and cutting the paper into bands of required width and rewinding it. The Explanatory Note to Heading 84.41 of the HSN includes ‘Winders (slitter-winders) for unwinding reels of paper, slitting the paper into bands (slits) of the required width and rewinding it’.
3. Thus, a slitter-cum-rewinding machine is internationally recognised as a paper cutting machine. In this view of the matter, we set aside the findings of the Adjudicating authority that the machine imported by the appellants is liable to confiscation, set aside the penalties and allow the Appeals."
11. We find in the present case, the machine in question is fully programmable paper cutting machine, as in the case of above mentioned decision of the Tribunal and objection of the Revenue was also the same that machine was slitter-cum-rewinder and both were different machines. The Tribunal held that slitter-cum-rewinding machine is recognised as cutting machine.
12. In view of the above discussion and the decision of the Tribunal, we find that the machine in question is a paper cutting machine which is classifiable under 8441.10 of Customs Tariff. Therefore, the appeal is allowed and the impugned order is set aside.
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Equivalent 1999 (107) ELT 617 (Tribunal)
Equivalent 1999 (032) RLT 0029