2004 (5) TMI 437 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty.
2. Classification of printed carton/tops folders.
3. Interpretation of Chapter Heading 48.18 of CETA, 1985.

Analysis:
1. The case involved applications for the waiver of pre-deposit of duty and penalty amounting to Rs. 1,10,800/- confirmed against the applicant (proprietary concern) and an additional penalty of Rs. 25,000/- imposed on the Power of Attorney holder of the proprietor. The duty demand was upheld due to the classification of the product in dispute as printed carton/tops folders used in packing hosiery items, falling under CETA sub-heading 4819.19, rejecting the applicant's claim for classification under Chapter Heading 48.20 or Chapter 49 as a product of the printing industry. The period under consideration was from 1-4-1997 to 31-3-1998.

2. After hearing both sides, the Tribunal found a strong prima facie case for waiver based on the Apex Court decision in the case of G. Claridge & Company Ltd. v. CCE, 1991 (52) E.L.T. 341 (S.C.). The Court's ruling clarified that the term "containers" in Chapter Heading 48.18 of CETA, 1985 should be interpreted to refer to packing containers similar to boxes and cartons. The judgment further explained that enclosed receptacles suitable for storage and transportation, such as egg trays, are considered containers, whereas receptacles like the folders for packing hosiery items, which are not enclosed, cannot be classified as containers under Heading 48.18. Therefore, the Tribunal concluded that the folders in question, being open and not enclosed, do not fall under Chapter Heading 48.19 as containers. Consequently, the pre-deposit of duty and penalty was waived, and the recovery thereof was stayed pending the appeals.

3. The interpretation of Chapter Heading 48.18 of CETA, 1985 was crucial in determining the classification of the product in dispute. The Tribunal's decision hinged on the distinction between containers, which are enclosed receptacles suitable for transportation, and open receptacles like the folders used for packing hosiery items. By applying the precedent set by the Apex Court, the Tribunal clarified that the folders could not be considered containers falling under Chapter Heading 48.19. This interpretation was pivotal in granting the waiver of pre-deposit of duty and penalty to the applicant, emphasizing the importance of legal precedents and established classifications in customs and excise matters.