ORDER
C.N.B. Nair, Member (T)
1. M/s Manipal Printers and Publishers Ltd. imported a consignment of “Glazed Newsprint” and sought its clearance at the exempted rate of duty under Notification No. 23/98 dated 2.6.98 under Bill of Entry No. 6477 dated 6.10.98. Under the orders impugned in this appeal, the concession has been denied on the ground that the GSM of paper in question was above the prescribed limit of 70 GSM.
2. The claim of the appellant is that even if the paper is not eligible for classification as newsprint on account of the fact that it is coated paper, it would be eligible for the benefit under Notification No. 23/98 (serial No. 91) as “light weight coated paper. This benefit has been denied on account of the consignment not matching the GSM prescribed under serial No. 91. We may read serial No. 91:
“Light weight coated paper weighing upto 70G/m imported by actual users for printing of magazines”.
It may be mentioned here that prior to the amendment of the entry w.e.f. 28.9.98, the GSM mentioned was of “51 g/m2”.
3. The import of the goods was from Finland. The weight indicated in the indent letter dated June 6, 1998 was “weight – 60 GSM +/- 3 GSM”. The technical specification report made available alongwith the goods declared the weight as “basis weight – 60 GSM +/- 3 GSM”. As against the aforesaid declaration, when the sample of the goods was tested, upon arrival in India, by the Customs House Laboratory the GSM was found as 76.4 g/m2. When the sample was retested at the Central Revenue Control Laboratory, New Delhi the GSM was found as 71.2 g/m2. The impugned orders have held that since under both the tests the GSM was above the cut-off of 70 g/m2 prescribed in the entry, the goods could not be classified at the exempted rate as “light weight coated paper”. The Notification contained no separate rate for light weight paper of more than 70 GSM.
4. Appellant’s submission is that the GSM mentioned in the entry should be considered with due provision for tolerance, for many reasons. First of all, the goods in question are hygroscopic i.e. it absorbs moisture from air which would alter the weight per square area. Secondly, the test reports and found to vary between the two Laboratories of the Customs Department. The variation is found to be 5.2 g/m2, even as the supplier had indicated +/- 60 GSM. Appellant has also pointed out that it is all the more necessary since there is no dispute that the imported goods satisfy the condition “imported by actual user for printing magazines”. The appellant has also submitted that the need to make provision for tolerance in respect of paper is well recognized inasmuch as the Ministry of Commerce has laid down a tolerance of +/-10% in GSM of paper under import and export. The appellant has drawn our attention to Note 10 in “General Notes for Chemicals & Allied Products” in the Export & Import Policy 1997-2002. This Note reads as under:
10. In case of paper, a variation of +/- 10% in GSM of paper in import and export will be allowed”.
5. As against the aforesaid submission of the appellant, the learned SDR would contend that once a specific criterion is stipulated in the exemption notification, the same should be adhered to while subjecting the goods to duty.
6. We have perused the records and considered the submissions made by both sides. The relevant entry in the notification covers “light weight coated paper imported by actual users for printing of magazines”. There is no dispute that the import is “by an actual user for printing of magazines”. Category of paper is also the same as contemplated in the entry. The only difference is in respect of the weight per square area. While the entry during the relevant period stipulated up to 70 GSM, the three test reports are at considerable variation. The contract between the appellant import and its supplier was for “60 GSM +/- 3 GSM basis”. The sale documents including the technical specification report supplied by the seller, mentions 60 GSM +/- 3 GSM. The reports of the Customs Laboratories are at variance. These facts provide validity to the appellant’s contention that while determining GSM, due tolerance must be provided in view of the hygroscopic property of paper. The appellant’s contention is also supported by the Export & Import Policy which allows a variation of 10%. Refusal to recognize the requirement for tolerance creates a very anomalous situation. What was bought as “light weight coated paper” based on GSM as ascertained at the time of sale, would cease to be light weight coated paper upon arrival in another country because GSM has changed in between, presumably by paper absorbing moisture. A strict adherence to the stipulated GSM would uphold such an anomalous and unintended situation. It is well settled that statutes should be construed in such a manner as to subserve the intention of the statute and not to defeat it. In the instant case, since tolerance in the matter of weight per square area is necessitated by the very nature of the goods, it would be irrational not to provide for this necessity. The variation found in the present case is below 10% tolerance provided in the Import & Export Policy also. Further, the consignment in question satisfy the other criteria in the entry.
7. In these circumstances, we are of the view that due allowance for variation in GSM of paper should be allowed and concessional assessment granted to the consignment under import. The appeal is allowed in these terms.