KARACHI: The Customs Appellate Tribunal has remitted the fine and penalty imposed by Customs Adjudication on a paper importer for misdeclaring the classification as the Customs itself failed to classify the impugned goods correctly.
According to details of the case, M/s Dynamic Incorporated imported a consignment of news print paper in rolls from USA and sought clearance under Hs Code 4801.0000 chargeable customs duty as 5.0 percent.
Scrutiny of the Goods Declaration in the light of Test Report revealed that the importer had mis-declared in terms of description and classification of the impugned goods. The importer had declared the description of goods as ‘News Print Paper in Rolls’ under H.S Code 4801.0000, chargeable to Customs Duty 5.0 percent.
On joint examination with R&D staff the representative samples of the instant consignment were sent to Custom House Lab for test. As per Lab Test Report, the sample is not news print paper in respect of Grammage. It was found to be mechanical paper in the form of off white paper sheet, neither coating nor impregnated.
It is composed of mixture of mechanical and chemical wood pulp, suggested PCT 4802.5890, which attracting Customs Duty 20 percent and benefit/exemption for Sales Tax under 6th Schedule is not available against ascertained PCT heading.
Importer try to clear the goods under PCT heading of lower rate of Customs duty by mis-declared the description, classification and claimed inadmissible exemption.
The Customs Adjudication established that the imported goods did not meet the basic condition of newsprint and has been incorrectly declared as newsprint.
Dissatisfied with the order-in-original, the importer approached Customs Appellate Tribunal.
Mohammad Yahya, Member Technical-I, after detailed deliberation of facts observed that description and mode of packaging which clearly says ‘rolls’ are correctly classifiable under HS 4802.6100.
The Tribunal noted that since the department itself has failed to classify the impugned goods correctly and failed to establish any mensrea on part of the importer that he willfully stated wrong HS heading, thus each wrong determination of HS Code on part of importer does not require invoking penal laws.
Accordingly, the fine and penalty imposed in this instant case are remitted.