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2021 (12) TMI 13 - CESTAT NEW DELHIEntitlement for concessional rate of duty - coated paper - classified under tariff item 4810 29 00 of the First Schedule to Customs Tariff Act, 1975 or not - legality and propriety of the approach adopted by the first appellate authority in the impugned order for upholding the classification redetermined by the assessing authority to deny eligibility to concessional rate of duty - HELD THAT:- The decisions in HPL CHEMICALS LTD. VERSUS CCE, CHANDIGARH [2006 (4) TMI 1 - SUPREME COURT] and in HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1996 (12) TMI 49 - SUPREME COURT] mandate that it is for Revenue to discharge the burden of justifying the appropriateness of the proposed alternative classification in conformity with the General Rules for Interpretation of the Harmonized System and it does not secure acceptance merely by discrediting the classification claimed by the assessee. In the present dispute, that onus can be discharged only by establishing that at least 90% of the fibre content of the pulp used for manufacture of the impugned goods has been derived from ‘chemical processing’ of wood. The certification evincing the origin of the goods, and based on production process intimated by the manufacturer, is the threshold qualification for preferential rate of duty. The rules of origin stipulate ascertainment of the source, and extent, of content in a manufactured. The partial acceptance of origin in the certificate while casting aspersions on the classification therein is not consistent with treaty mandate of presumption of authenticity unless expressly established otherwise - The first appellate authority did not consider it necessary to ascertain the methodology of that determination even though the report was bereft of any explanation. Nor is there any submission that standard tests for determination of the ‘pulp’ as having been extracted by ‘chemical process’ was available in the laboratory. Such unqualified reliance on a single sentence in the test report which abdicates the statutorily empowered determination in favour of the laboratory certification is not dissimilar to the abdication of empowerment to assess in favour of the investigation agency as both remain in the lee of statutory accountability. Evolving technology in the paper industry, and particularly in qualitative improvement for catering to existing uses as well as new applications, has had to focus attention on the ‘yellowing’ and ‘brittleness’ associated with passage of time that affect paper made from pulp obtained by ‘mechanical processing’ of wood - The ‘mechanical processing’ of wood does little to the ‘lignin’ content in pulp and, while ‘chemi-mechanical processing’ has some impact, only ‘chemical processing’ can render ‘lignin free’ fibre. It is, therefore, the presence of ‘lignin’ in paper that is the distinction for differentiating between that manufactured from pulp obtained by ‘mechanical process’ or ‘chemi-mechanical process’ and from ‘chemical processing’ of wood. The descriptions in the relevant tariff items are emphatically unambiguous, the rules of classification clearly delineate the distinction and the onus for disturbing classification is unequivocally enunciated as the law of the land. The classification can be revised only by determination of the process by which the pulp was extracted - The ‘coated paper’, as certified by the competent authority designated under the Comprehensive Economic Partnership Agreement (CEPA), does not conform to the description corresponding to sub-heading 8410.13 of First Schedule to Customs Tariff Act, 1975. The denial of the benefit of the concessional rate of duty being improper, the impugned order is set aside - Appeal allowed - decided in favor of appellant.
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