Commissioner of Customs Vs. Aniraj International - Court Judgment

Excerpt:
1. the respondent had imported what was declared as 'cardboard', under three value-based advance licences (deec) and filed a bill of entry dated 31.12.1998 for clearance of the goods in terms of customs notification no. 79/95. the material was to be used for manufacture of cartons for packing tobacco (export product) to be exported in discharge of export obligation under the above licences and the notification. a dispute arose as to whether the cardboard was importable under the above licences which were issued for import of 'cardboard other than ivory board'. the cardboard was apparently white in colour. as 'white cardboard' figured in the sensitive list of imports under the then prevailing import policy, the customs authorities entertained a doubt regarding its importability under deec scheme. therefore, they had referred the question to director general of foreign trade (dgft) in an earlier case and obtained reply from his office to the effect that 'while cardboard' meant 'cardboard having white colour' and that clearance of white cardboard was not to be allowed against licences issued for import of 'cardboard other than ivory board'. acting upon this clarification, the department proposed to confiscate the goods imported by the respondents as also to deny them the benefit of deec scheme in respect of the goods. apparently, the respondents waived show-cause notice but objected to the above proposal. the commissioner of customs, in adjudication of the dispute, passed the impugned order, wherein the clarification issued by dgft's office was held to be only an inter-departmental communication not affecting the respondent's legal rights under the advance licences and the subject goods were allowed to be cleared under the licences. hence the present appeal of the department.2. the memorandum of appeal refers to an earlier case of m/s. itc ltd., wherein the department had obtained the above clarification from the dgft's office. in that case, clearance of white cardboard by the company was not permitted by the commissioner vide order-in-original no. 215/97-cau dated 13.11.1997. the grounds of appeal say that the facts of the present case are identical to those of itc case. learned counsel today submits that the appeal filed with the tribunal by m/s.itc ltd. against the above order-in-original was allowed vide 2002 (147) e.l.t.864 (tri.-chennai). in view of the tribunal's decision in itc case, learned counsel would pray for sustaining the impugned order.learned counsel has also referred to the tribunal's decision in cham ice and cold storages v. collector of customs in support of his submission that, on the specifications of ivory board as found by the tribunal in that case, the goods in question in the present case must also be held to be importable under deec scheme.3. on the other hand, learned sdr relies on final order no.882-884/2005 dated 08.06.2005 passed by this bench in appeal nos.c/912/1997 and c/336 and 501/1998 [commissioner of customs, chennai v.archies greetings and gifts ltd. and ors.], wherein white cardboard imported by the said parties were held, on the basis of clarificatory letters of jt. dgft, to be the same as 'ivory board' and accordingly the department's appeals against the appellate commissioner's orders allowing clearance of the goods under deec scheme were allowed.4. after giving careful consideration to the submissions, we find that the case of m/s. itc ltd., said to be identical to the present case, stands decided in favour of the party by the tribunal. in that case, dgft's clarification was not accepted and it was held that the benefit of doubt was to be given to the assessee. moreover, the deputy chief chemist's report and the opinion of an expert from the institute of paper technology were also examined and on that basis, it was observed that the revenue's plea of 'white cardboard' had not been established.in the result, the cardboard imported by m/s. itc ltd. was found not hit by anything contained in the sensitive list and accordingly its clearance under deec scheme was permitted. we have found no reason not to follow the decision rendered in itc case, which has been accepted by the appellant himself to be an "identical" case.5. as regards the decision in archies greetings case, we find that the present memorandum of appeal contains a reference to this case also, but the appellant does not seem to consider the case as 'identical'. in other words, the appellant apparently does not rule out the scope of distinguishing the present case from that of archies greetings (supra).in this view of the matter, we think, we need not examine archies case further in support of the appellant.6. both sides have also addressed the question whether the clarification issued to the department from the office of the dgft is valid and, if so, whether it is applicable to the present case.admittedly, the clarification was issued in respect of cardboard imported earlier by itc ltd. in that case, the clarification was not accepted by this tribunal. therefore, we think, we need not examine this question further.7. in the result, the impugned order is sustained and this appeal is dismissed.

Judgment:
1. The respondent had imported what was declared as 'cardboard', under three value-based advance licences (DEEC) and filed a bill of entry dated 31.12.1998 for clearance of the goods in terms of Customs Notification No. 79/95. The material was to be used for manufacture of cartons for packing tobacco (export product) to be exported in discharge of export obligation under the above licences and the Notification. A dispute arose as to whether the cardboard was importable under the above licences which were issued for import of 'cardboard other than ivory board'. The cardboard was apparently white in colour. As 'white cardboard' figured in the sensitive list of imports under the then prevailing import policy, the Customs authorities entertained a doubt regarding its importability under DEEC scheme. Therefore, they had referred the question to Director General of Foreign Trade (DGFT) in an earlier case and obtained reply from his office to the effect that 'while cardboard' meant 'cardboard having white colour' and that clearance of white cardboard was not to be allowed against licences issued for import of 'cardboard other than ivory board'. Acting upon this clarification, the department proposed to confiscate the goods imported by the respondents as also to deny them the benefit of DEEC scheme in respect of the goods. Apparently, the respondents waived show-cause notice but objected to the above proposal. The Commissioner of Customs, in adjudication of the dispute, passed the impugned order, wherein the clarification issued by DGFT's office was held to be only an inter-departmental communication not affecting the respondent's legal rights under the advance licences and the subject goods were allowed to be cleared under the licences. Hence the present appeal of the department.

2. The memorandum of appeal refers to an earlier case of M/s. ITC Ltd., wherein the department had obtained the above clarification from the DGFT's office. In that case, clearance of white cardboard by the company was not permitted by the Commissioner vide Order-in-Original No. 215/97-CAU dated 13.11.1997. The grounds of appeal say that the facts of the present case are identical to those of ITC case. Learned Counsel today submits that the appeal filed with the Tribunal by M/s.

ITC Ltd. against the above Order-in-Original was allowed vide 2002 (147) E.L.T.864 (Tri.-Chennai). In view of the Tribunal's decision in ITC case, learned Counsel would pray for sustaining the impugned order.

Learned Counsel has also referred to the Tribunal's decision in Cham Ice and Cold Storages v. Collector of Customs in support of his submission that, on the specifications of ivory board as found by the Tribunal in that case, the goods in question in the present case must also be held to be importable under DEEC scheme.

3. On the other hand, learned SDR relies on Final Order No.882-884/2005 dated 08.06.2005 passed by this Bench in Appeal Nos.

C/912/1997 and C/336 and 501/1998 [Commissioner of Customs, Chennai v.Archies Greetings and Gifts Ltd. and Ors.], wherein white cardboard imported by the said parties were held, on the basis of clarificatory letters of Jt. DGFT, to be the same as 'ivory board' and accordingly the department's appeals against the appellate Commissioner's orders allowing clearance of the goods under DEEC scheme were allowed.

4. After giving careful consideration to the submissions, we find that the case of M/s. ITC Ltd., said to be identical to the present case, stands decided in favour of the party by the Tribunal. In that case, DGFT's clarification was not accepted and it was held that the benefit of doubt was to be given to the assessee. Moreover, the Deputy Chief Chemist's report and the opinion of an expert from the Institute of Paper Technology were also examined and on that basis, it was observed that the Revenue's plea of 'white cardboard' had not been established.

In the result, the cardboard imported by M/s. ITC Ltd. was found not hit by anything contained in the sensitive list and accordingly its clearance under DEEC scheme was permitted. We have found no reason not to follow the decision rendered in ITC case, which has been accepted by the appellant himself to be an "identical" case.

5. As regards the decision in Archies Greetings case, we find that the present memorandum of appeal contains a reference to this case also, but the appellant does not seem to consider the case as 'identical'. In other words, the appellant apparently does not rule out the scope of distinguishing the present case from that of Archies Greetings (supra).

In this view of the matter, we think, we need not examine Archies case further in support of the appellant.

6. Both sides have also addressed the question whether the clarification issued to the department from the office of the DGFT is valid and, if so, whether it is applicable to the present case.

Admittedly, the clarification was issued in respect of cardboard imported earlier by ITC Ltd. In that case, the clarification was not accepted by this Tribunal. Therefore, we think, we need not examine this question further.

7. In the result, the impugned order is sustained and this appeal is dismissed.