2020 (5) TMI 581 - AAR - GST

Classification of goods - kraft paper made honeycomb boards - whether classified under HSN code 48081000 or 48089000? - HELD THAT - On verification of the structure and purpose for which kraft paper honeycomb board or paper honeycomb board used are similar to the corrugated paper board(listed under 48081000), only difference is that this paper honeycomb board consists of honey comb like structure core material at the centre and on either side of this one or more layer of kraft paper is glued by using adhesive with fluting direction being perpendicular to corrugated boards. Hence this honeycomb paper board classified under the heading 48089000 as other instead 48081000. The kraft paper honeycomb board or paper honeycomb board is classified under the heading 48089000.

Summary

Issues Involved: Classification of kraft paper honeycomb boards under HSN code 48081000 or 48089000.

Analysis:
1. Nature of Activity: The applicant, a manufacturer of kraft paper honeycomb boards, sought an advance ruling on the applicable HSN code for their product, primarily made of kraft paper, paper honeycomb core, and adhesives used in packaging goods.

2. Applicant's Interpretation: The applicant argued that the structure of their paper honeycomb boards, with a honeycomb core and kraft paper layers, resembles corrugated boards (HSN 48081000) due to the perpendicular fluting direction. However, since the specific mention of paper honeycomb boards is absent, they suggested classification under HSN 48089000 as "others."

3. Discussion and Findings: The authority noted the composition of the boards, primarily comprising 80-90% kraft paper and the rest adhesive, categorizing the kraft paper under HSN 4804. The applicant's product's structure, similar to corrugated boards but with a honeycomb core, led to the ruling's determination.

4. Classification Analysis: The authority compared the applicant's product with the description of HSN 4808, which includes corrugated paper and paperboard. The key distinction was the honeycomb core structure and the perpendicular fluting direction, leading to the classification of the honeycomb boards under HSN 48089000 as "other" instead of 48081000.

5. Final Ruling: Based on the structural analysis and purpose of the kraft paper honeycomb boards, the authority ruled that the product falls under the HSN code 48089000, aligning with the applicant's submission and the specific characteristics of the honeycomb boards.

This detailed analysis outlines the applicant's arguments, the authority's assessment of the product's composition and structure, and the ultimate ruling on the classification of the kraft paper honeycomb boards under the appropriate HSN code 48089000.