2018 (11) TMI 1274 - AT - Central Excise

Classification of goods - Absorbent Cotton Wool IP, Gauze/Bandage Wool I.P, Absorbent Cotton B.P., Purified Cotton USP, Cotton Gauze Absorbent B.P., Absorbent Lint IP, Rolled Bandages, Cotton Bandages Cloth, Cotton Crepe Bandage B.P. - whether classified under Tariff Heading No. 56012110 of the first Schedule to the Central Excise Tariff Act, 1985 or otherwise - exemption under N/N. 30/2004-CE dated 09.07.2004. Held that - Identical issue decided in the case of M/s Shanti Surgical Pvt. Ltd. & Ors. vs CCE, Kanpur & Anr. 2017 (7) TMI 50 - CESTAT ALLAHABAD , where it was held that the impugned goods would fall under Chapter Sub-heading No.5601, 5203 & Chapter 58 - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of Absorbent Cotton Wool IP.
2. Applicability of exemption from Central Excise Duty under Notification No. 30/2004-CE.
3. Interpretation of relevant tariff headings and rules for classification.

Issue-wise Detailed Analysis:

1. Classification of Absorbent Cotton Wool IP:
The primary issue revolves around the correct classification of Absorbent Cotton Wool IP. The Department classified the product under Chapter 3005, whereas the assessee-Appellants classified it under Tariff Heading No. 56012110. The Tribunal referenced a similar case, M/s Shanti Surgical Pvt. Ltd. vs CCE, Kanpur, where it was determined that specific entries should prevail over general entries. The Tribunal emphasized that the classification should be based on the specific nomenclature and constituent material of the goods, not their end use or packaging.

2. Applicability of Exemption from Central Excise Duty under Notification No. 30/2004-CE:
The assessee-Appellants claimed exemption from Central Excise Duty under Notification No. 30/2004-CE, arguing that their products fell under the category of 'Textile & Textile Articles'. The Tribunal agreed, noting that the products were correctly classified under Chapter sub-heading No. 5601, 5203, and Chapter 58, which were exempt under the said notification. The Tribunal reiterated that the specific classification of the goods should not be overridden by a more general classification under Chapter 3005.

3. Interpretation of Relevant Tariff Headings and Rules for Classification:
The Tribunal analyzed the rules for classification, particularly Rule 1 of the Rules for Interpretation, which states that classification should be determined according to the terms of the headings and any relative Section or Chapter Notes. The Tribunal found that the Department's reliance on Section notes, Chapter notes, and HSN explanations was misplaced, as the specific tariff headings (56012110 for Absorbent Cotton Wool and 52030000 for Cotton Carded) provided clear classification without exclusion. The Tribunal cited the Supreme Court's decision in Moorco (India) Ltd. v. Collector of Customs, which established that specific entries should prevail over general entries.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal by the assessee-Appellants. The judgment emphasized the importance of adhering to specific tariff classifications and the principle that specific entries take precedence over general ones.