2000(06)LCX0052

IN THE CEGAT, EASTERN BENCH, KOLKATA

Smt. Archana Wadhwa, Member (J) and Dr. S.N. Busi, Member (T)

BHAIRAMAL GOPIRAM

Versus

COMMISSIONER OF CUSTOMS, CALCUTTA

Order No. A-788/CAL/2000, dated 22-6-2000 in Appeal No. C/R-327/99

Cases Quoted

A.G. Daftry v. Collector — 1996(11)LCX0139 Eq 1997 (092) ELT 0584 (Tribunal) — Followed.............................. [Para 9]

Displayor of Customs v. Sony Enterprises — 1997(10)LCX0174 Eq 1998 (098) ELT 0579 (S.C.) — Followed...... [Para 10]

Hanuman Goel & Co. v. Collector — 1993(04)LCX0077 Eq 1994 (069) ELT 0715 (Tribunal) — Followed.............. [Para 8]

Advocated By :   S/Shri Ramesh Chowdhury and B.N. Pal, Advocates, for the Appellant.

Shri T.P. Kumar, SDR, for the Respondent.

[Order per : Archana Wadhwa, Member (J)]. - The short question required to be decided in the present appeal is as to whether timber imported by the appellants is classifiable under Heading 44.03 or the same falls under Customs Tariff Heading 44.07. The appellants have described the product as ‘chipped timber wood in rough-not sawn log’. The goods were examined by Customs authorities who felt that the same was sawn timber. Thereafter opinion of Forest Range Officer Shri B.K. Bose was obtained, who in his report dated 5-2-1998 stated that sawn size wood in different sizes were found to be in the containers. He also reported that sap wood in four sides of the beam was not visible, the peel as well as the fresh sap wood was already removed, the timber did not contain any bark sap and veins. He opined that the wood was not in rough, they are sawn wood and would fall under Heading 44.07 attracting higher rate of duty.

2. Thereafter a show cause notice was issued to the appellants proposing confiscation of the goods, confirmation of differential demand of duty and imposition of penalty upon the appellants. Shri B.K. Bose, Range Officer was cross-examined by the appellants during the course of adjudication when he opined that the samples produced before him was roughly squared wood, hand sawn and no sawing machine had been used. He further confirmed that it was soft wood and therefore could not be used as beams and was not in a ready to use condition. On being specifically asked he confirmed that the centre of annual ring was visible.

3. The said show cause notice resulted into passing of the impugned order by the Commissioner of Customs, Calcutta vide which he held that the timber in question fell under Heading 4407.10 and liable to duty @ 33% ad valorem basic and 5% ad valorem special. He also confiscated the goods with an option to the appellants to redeem the same on payment of redemption fine of Rs. 6 lakes 50 thousand and imposed personal penalty of Rs. 1 lakh.

4. We have heard Shri Ramesh Chowdhury, ld. Advocate along with Shri B.N. Pal, ld. Advocate for the appellants and Shri T.P. Kumar, ld. SDR for the Revenue.

5. The short question which falls for our consideration is as to whether the timber in question imported by the appellants is wood in rough classifiable under Heading 44.03 or sawn wood falling under Heading 44.07. The two contending entries are reproduced below :-

6. The HSN explanatory notes under Heading 44.03 said that the said heading, inter alia, excludes wood cut into the form of beams. The relevant portion of the explanatory notes in HSN under Heading 44.03 is reproduced below for better appreciation.

“This Heading also includes Roughly Squared Wood which consists of trunks or sections of trunks of trees, into rough 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. Roughly Squared Wood is characterised by the presence of rough areas or bark traces.”

7. On the other hand explanatory notes under heading 44.07 read us under :-

“Such wood and timber includes sawn beams, planks, flitches, boards, laths, etc. and products regarded as the equivalent of sawn wood or timber which are obtained by the use of chipping machines and which have been chipped to extremely accurate dimensions, a process which results in a surface better than that obtained by sawing and which thereby renders subsequent planning unnecessary.”

8. The question which now arises is as to whether the timber in question has been further worked upon apart from squaring and removal of bark to such an extent that the same would get excluded from the purview of heading 44.03 and would fall under 44.07. The question essentially becomes one of evidence. We find that in the case of Hanuman Goel & Co. v. CC, Visakhapatnam - 1993(04)LCX0077 Eq 1994 (069) ELT 0715 (Tribunal) it has been observed in Para 19 that sap wood is outer life of the trees. The said sap wood unless treated gets decayed and for the purposes of transportation 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. It has been further observed by the Tribunal that explanatory notes for wood sawn under heading 44.03 clearly state 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 peeling. 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.

9. In the instant case we find that the opinion of the Range Officer given by him on 5-2-1998 which in any case was not conclusive has been changed by him on cross-examination. As such the Commissioner after observing that the two opinions of the Range Officer were self-contradictory has held the same to be unreliable. If the said opinion of the Range Officer is excluded from consideration, there is no other evidence on record to support the Revenue’s contention that the timber in question has been sawn to such an extent so as to get it covered by heading 44.07. There is nothing on record to show that the timber in question has been further manufactured apart from sawing and such further sawing is to such an extent so as to not require any further planning. The appellants’ contention is that the wood in question was coarse sawn for the purposes of smooth transportation and merited classification under heading 44.03. The Revenue has not placed any evidence on record to the contrary. It is well settled that the burden in such cases is upon the Revenue to show that the goods fell under 4407. We also take note of another Tribunal’s decision in the case of A.G. Daftry v. CC, Bombay - 1996(11)LCX0139 Eq 1997 (092) ELT 0584 (Tribunal) where wood logs sawn on two sides were held to be classifiable as wood roughly squared and half squared but not further manufactured and falling under heading 4403.99 of the Customs Tariff Act, 1975.

10. The Hon’ble Supreme Court has also in the case of Displayor of Customs, Bombay v. Sony Enterprises - 1997(10)LCX0174 Eq 1998 (098) ELT 0579 (S.C.) has held that the wood roughly squared and half squared and not further manufactured as classifiable under 44.03. As such following the ratio of the decisions we set aside the impugned order and allow the appeal with consequential relief to the appellants.

Equivalent 2001 (134) ELT 0239 (Tri. - Kolkata)