2011 (6) TMI 648 - AT - Central Excise

Classification - Sugar Cone placed in Aluminium foil cone - appellants are manufacturing sugar cones for filling the ice-cream and are classifying the same under Heading 1905.3290 - Revenue s contention is that the same are classifiable under Heading 7612.9090 Held that - packing of paper wrappers would admittedly go along with the product wrapped in the same. By applying the above principle to the product in question it can be safely concluded that aluminium foil cone which is nothing but a wrapper of sugar cone is required to be classified along with sugar cone. Admittedly the said packing material is not suitable for repetitive use and is meant for one time use sugar cone placed in the aluminium cone is properly classifiable under Chapter 19 as claimed by the appellant decision in favour of the assessee

Summary

Issues:
Classification of product Sugar Cone placed in Aluminium foil cone under Heading 1905.3290 or Heading 7612.9090.

Detailed Analysis:
1. Issue of Correct Classification: The dispute in this case revolves around the correct classification of the product Sugar Cone placed in Aluminium foil cone manufactured by the appellant. The appellants classify sugar cones under Heading 1905.3290 and aluminium sleeves under Chapter 76. However, the controversy arises when sugar cones are placed inside aluminium foil cones. The Revenue argues for classification under Heading 7612.9090, initiating proceedings against the appellant for differential duty recovery.

2. Assistant Commissioner's Decision: The Assistant Commissioner accepted the appellant's stance that aluminium foil cones are merely coverings for packing ice-cream along with sugar cones. By applying Rule 3(4) of General Rules of Interpretation, he classified the product under Chapter 19. The Additional Commissioner's order in favor of the appellant was appealed by the Revenue before the Commissioner (Appeals), who overturned the decision, leading to the present appeal.

3. Appellant's Argument: The appellant contends that aluminium foil cones, being wrappers for sugar cones, should be classified under Chapter 19. They argue that under Rule 5(b) of Interpretative Rules, packing materials should be classified with the goods they pack. The appellant emphasizes that the aluminium foil cones are not containers but integral parts of the sugar cones, similar to paper wrappers for biscuits or soaps.

4. Tribunal's Decision: The Tribunal agrees with the appellant's argument, emphasizing that the purpose of the aluminium foil cones is to hold the sugar cones for ice-cream. They reject the Revenue's classification under Chapter 76, citing the Supreme Court's precedent on similar cases. The Tribunal concludes that the sugar cone placed in the aluminium cone should be classified under Chapter 19, as claimed by the appellant.

5. Conclusion: The Tribunal sets aside the Commissioner (Appeals)'s decision and upholds the original adjudicating authority's ruling in favor of the appellant. The judgment clarifies the classification of the composite product and emphasizes the application of Interpretative Rules in determining the classification of packing materials with the goods they enclose.

In summary, the judgment addresses the classification dispute regarding the product Sugar Cone placed in Aluminium foil cone, ultimately ruling in favor of the appellant's classification under Chapter 19 based on the interpretation of relevant rules and legal precedents.