2019 (8) TMI 64 - AT - Central Excise

Classification of manufactured goods - FIBC woven fabrics / cut pieces made of Polypropylene (PP) granules - classified under CETH 54072090 or under CETH 39269080? - HELD THAT - It has to be kept in mind that the impugned goods are not plastic PP bags but only FIBC woven fabrics / cut pieces. There is no infirmity in the order of the lower appellate authority holding that the impugned goods are correctly classifiable under CETH 5407 2090 and not under CETH 3926 9080. Appeal dismissed - decided against Revenue.

Summary

Issues: Classification of goods under CETH 54072090 or CETH 39269080

In this judgment by the Appellate Tribunal CESTAT Chennai, the issue revolved around the correct classification of goods manufactured by the respondents under CETH 54072090 or CETH 39269080. The Department alleged that the goods should be reclassified under CETH 39269080, while the original authority and the Commissioner (Appeals) had differing opinions. The key contention was whether the goods, FIBC woven fabrics / cut pieces made of Polypropylene (PP) granules, should be classified as plastic fabrics or synthetic textile materials. The Tribunal examined the arguments presented by both parties and analyzed the relevant legal precedents to arrive at a decision.

The original authority had classified the goods under CETH 39269080, considering them as plastic fabrics made from the same raw materials as PP bags. However, the Commissioner (Appeals) correctly noted the distinction that the goods were FIBC woven fabrics / cut pieces, not plastic PP bags. The Commissioner highlighted that the raw material used, polypropylene, is a synthetic textile material and falls under Chapter 54 for textile strips wider than 5 mm. The Tribunal agreed with the Commissioner's analysis, emphasizing that the finished goods should be classified based on their characteristics and usage, not solely on the raw material classification. The Tribunal referenced the judgment in Pramact Plastics Pvt. Ltd., affirming the classification principles applied. Consequently, the Tribunal upheld the lower appellate authority's decision that the goods are rightly classifiable under CETH 54072090, dismissing the Department's appeals due to lack of merit.

Overall, the judgment delves into the nuances of classification under the Central Excise Tariff Act, considering the nature of the goods, the raw materials used, and the applicable chapters for classification. The decision underscores the importance of accurately determining the classification of goods based on their essential characteristics, even if the raw materials may fall under a different category, as highlighted in the relevant legal precedents and statutory provisions.