2023 (6) TMI 1361 - AT - Central Excise

Classification of goods - Polypropylene (PP) Flexible Intermediate Bulk Containers (FIBC) bags - to be classifiable under Chapter 6305 or 3923 as Other made-up Textiles Articles - applicability of Board s Circular No.42/2011 and Minutes of the Meeting of DGFT held on 25-7-2013 - HELD THAT - DGFT and Board s Circular have clarified that FIBC is classifiable under Chapter Heading 6305; and since there is no test reports relied upon by the Department to claim that it is not of manmade textile material, the classification cannot be concluded under Chapter 39 as Articles for Conveyance or packing of goods made by other plastics . Both the Board Circular and DGFT have clarified that FIBC is classifiable under 6305 based on the HSN Explanatory Notes to Chapter 39. Further it is found in the case of CCE vs. Karur KCP Packaging P. Ltd. 2015 (8) TMI 1233 - CESTAT CHENNAI , the Tribunal by relying on the Hon ble High Court s decision rendered in the case of Karur KCP Packings Ltd. vs. CC 2015 (9) TMI 976 - MADRAS HIGH COURT , Board Circular and DGFT clarification, held that FIBC is rightly classifiable under 6305 32 00 and not under 3923 29 90. In view of the above clarifications by the Board and DGFT and relying on the decisions in the case of Karur KCP Packaging P. Ltd. it is held that the goods are rightly classifiable under Chapter Heading 6305 32 00. Accordingly, the appeal is allowed.

Summary

Issues:
The classification of Flexible Intermediate Bulk Containers (FIBC) under Chapter Heading 3923 or Chapter Heading 6305.

Classification under Chapter Heading 3923:
- The Appellant, a manufacturer of Polypropylene Flexible Intermediate Bulk Containers (FIBC) bags, reclassified the products under Chapter 6305 instead of 3923.
- The Commissioner held that the goods are rightly classifiable under Chapter 3923 as 'Articles for Conveyance or packing of goods made by other plastics'.
- The Appellant argued that the goods should be classified under Chapter 6305 and not under 3923.
- The learned Chartered Accountant distinguished between Chapter Heading 3923 and 6305, emphasizing the specific mention of FIBC under Chapter 6305.32.
- The Board's Circular and DGFT clarified that FIBC made of manmade textile material should be classified under Chapter 6305.
- The Tribunal held that FIBC is rightly classifiable under Chapter Heading 6305 32 00 based on the HSN Explanatory Notes and previous decisions.

Conclusion:
- The Tribunal set aside the impugned order and allowed the appeal, holding that the goods are rightly classifiable under Chapter Heading 6305 32 00.