By TIOL News Service

MUMBAI, MAR 25, 2015: THIS is a Revenue appeal.

The respondent imported goods declared as Decorative Ink Printed MDF Board One side (Ink) of different thicknesses. The bill of entry was assessed on second check basis. The adjudicating authority decided that the goods, even though inked on one side, are nothing but plain MDF Board of thickness more than 6mm and originating from Thailand and, therefore, leviable to Anti Dumping Duty under serial No. 4 of Notification No. 116/2009-Cus dt. 8.10.2009. The adjudicating authority relied on the findings of the DG Anti dumping (DGAD) vide F.No. 14/12/2007-DGAD dt. 2.2.2009 and came to the conclusion that since the imported boards are not laminated they will be covered under the term "Plain Medium Density Fibre Board of thickness of 6mm and above", described in Notification No. 116/2009-Cus, for levy of anti dumping duty. The adjudicating authority confiscated the goods under Section 111(m) of the Customs Act, imposed redemption fine of Rs.3 lakhs and penalty of Rs.1 lakh under Section 112(a) of the Customs Act.

The Commissioner (Appeals) held that the goods imported are Printed Medium Density Fibre Board and not Plain Medium Density Fibre Boards. According to him, the adjudicating authority had attempted to enlarge the scope of the notification No. 116/2009 by including the ‘printed' boards under the term ‘plain' Boards. Reliance was placed on the decision in Saraswati Sugar Mills 2011-TIOL-73-SC-CX to state that an exemption notification has to be strictly interpreted.

So, as mentioned, Revenue is before the CESTAT.

The AR submitted that the goods under consideration are known as Plain MDF Board in market parlance; that word plain means - "without a pattern; in only one colour: a plain fabric or a plain table". Reliance is placed on the decisions in M/s. Adarsh Realty & Hotels Pvt. Ltd.- 2008-TIOL-1462-CESTAT-BANG; Royal Enterprises 2011-TIOL-1156-CESTAT-BANG; Roma International - 2004-TIOL-876-CESTAT-MUM; that the anti dumping notification must not be interpreted in a way which results in its circumvent or defeats its purpose.

The respondent referred to the order of the original authority, who stated that "from physical inspection of the sample, it appeared that the material is decorative printed MDF of which one side was ink printed and did not appear to be plain MDF"; that in view of the apex court decision in Hemraj Gordhandas Vs. H.H. Dave - 2002-TIOL-351-SC-CX there is no room for intendment in a notification.

The Bench observed -

++ The goods are described in Notification No. 116/2009-Cus as "plain Medium Density Fibre Board of thickness of 6mm and above". The issue in this case is whether the goods imported namely Decorative Ink Printed MDF Board imported from Thailand are to be subjected to anti dumping duty under this notification. The respondent claims that since these Boards are ink printed on one side, they cannot be called Plain MDF Board. The preliminary finding of the DGAD dt. 2.2.2009 as brought out in Revenue's appeal stated that " MDF Board is produced in two forms plain & laminated. Lamination is additional processing, which is done after production of plain board, Laminated board is beyond the scope of the product under consideration."

++ It is apparent from the findings of DGAD (issued vide Notification No. 14/12/2007-DGAD dt. 26.8.2009) that only ‘laminated' and ‘other than laminated' Boards were considered for investigation. No distinction was made between Plain and Ink Printed Boards. It would appear that the words used in the notification namely Plain MDF Board only reflect to the plainness of the Board. In other words, only laminated board would be outside the purview of the anti dumping notification. Even in common parlance, if an item such as a table is called a Plain Table, it would not mean that tables which are polished or coloured would not be considered as plain table. The meaning of the word ‘Plain' has to be understood in simple terms and nothing more should be read into the word ‘Plain'. The reliance placed by the Ld. Counsel on the case of Hemraj Gordhandas (supra) does not help the respondent. In fact it supports our view because, in this case, the notification is being read in straight terms and not by extracting various meaning of the word ‘Plain'. The operation of the notification has to be judged by the words which it has employed to effectuate the legislative intent. If the view of Ld. Counsel is accepted, then even a polished Board would not be considered as a Plain Board. Clearly this reasoning is fallacious. With ink printing, a Plain Board would remain a Plain Board.

++ From the import invoice of M/s. Robin Resources, we find that the goods are described as MDF Board. Neither the word ‘Plain' is used nor the word ‘Printed' is used in this invoice. Even the corresponding Bills of Entry do not use the word ‘Plain' in the description of goods imported. This indicates that there is no distinction in the trade between the Plain Medium Density Fibre Board and Inked Medium Density Fibre Boards. We also find, on a comparison of the invoice issued by M/s. Robin Resources and M/s. Advance Fibre Co. Ltd., that the price of the same sizes e.g. 18MM, 12Mm are the same. This also leads us to conclude that there is no clear distinction between the ink printed MDF and Plain MDF in trade parlance.

++ We hold that the goods imported by the respondent being non-laminated are covered under Notification No. 116/2009-Cus and leviable to anti-dumping duty.

In the matter of confiscation and penalty, the CESTAT held -

"…we do agree that the matter could be subject to interpretation in the minds of some people, in view of the wording of the notification. The importer cannot be blamed for betraying the trust put on him by allowing self-assessment, as observed by the adjudicating authority. No case is made of deliberate intention to avoid payment of anti dumping duty. Therefore, we set aside the confiscation, consequent redemption fine and penalty under Section 112(a) of the Customs Act."

The Revenue appeal was partially allowed.

(See 2015-TIOL-547-CESTAT-MUM)