2023 (10) TMI 1253 - AT - Central Excise

Denial of benefit of exemption - determination of the correct classification of goods manufactured by the appellant-1 - Corrugated Boxes and Laminated Paper - It is the claim of the appellant that their goods are more appropriately classifiable under heading 4823 which do not fall within the negative list of the specified goods as per area based exemption notification claimed by them. HELD THAT - In the present case under consideration appellants are clearing the laminated paper obtained by fusion of the paper and BOPP in rolls to be used for the wrapping of the photocopy paper. Marks and printings on the paper cleared, make it evident that the paper is used for wrapping of the photocopying paper as it states the name of the of supplier as Century Pulp and Paper , name of product as copier paper , further there is marking on the wrapper COPIER MACHINE FRIENDLY . From these marking and other indications on the laminated paper cleared by the appellant it is quite evident that the product is cleared for wrapping of the photocopying paper. From perusal of entry at heading 48114900 (reproduced earlier in the quote from impugned order) it is observed that the said entry is preceded by a single dash entry Gummed or adhesive paper and paper board and a double dash entry self adhesive . All the gummed and adhesive paper and paper board, which are not of self adhesive nature will get classified under this heading. For getting classified under this heading the basic character which needs to be established is that the paper is Gummed or Adhesive paper. It is found that the product in dispute is neither gummed or adhesive paper and hence the classification under this heading gets ruled out. There are no merits in the said observation as the he has failed to notice that the preceding three dash entry do not specify any such condition and preceding single dash entry is other thus the requirement of cut to shape and size as stated in 4823, would be applicable to the goods classifiable in all the headings prior to 4823.90 and not to the entries falling under this heading and subheading in this category. These goods are correctly classifiable under heading 48239019 the benefit of exemption under Notification will be admissible to the appellant. Thus there are no merits in the demand made by denying the benefit of said exemption notification - Thus demand of duty and interest and the penalties imposed on both the appellants are set aside. Appeal allowed.

Summary

Issues Involved:
1. Classification of goods manufactured by Appellant 1.
2. Eligibility for exemption under Notification No 50/2003-CE.
3. Appropriateness of demand for duty, interest, and penalties.

Summary:

Issue 1: Classification of Goods
The core issue is the correct classification of goods manufactured by Appellant 1. The appellant initially classified their laminated paper under heading 48114900, which falls in the negative list of Notification No 50/2003-CE. The appellant later claimed that their product should be classified under heading 4823, which does not fall within the negative list. The Tribunal referenced the Supreme Court's rulings in Dunlop India Ltd and Elson Machines Pvt Ltd, emphasizing that there is no estoppel in law against a party in a taxation matter, allowing the appellant to change the classification. The Tribunal concluded that the laminated paper used for wrapping photocopy paper should be classified under heading 48239013, which specifically covers packing and wrapping paper.

Issue 2: Eligibility for Exemption
The Tribunal examined whether the goods classified under heading 48239013 are eligible for exemption under Notification No 50/2003-CE. Since heading 4823 is not in the negative list of the specified goods as per the area-based exemption notification, the Tribunal held that the goods are correctly classifiable under heading 48239013 and thus eligible for the exemption.

Issue 3: Demand for Duty, Interest, and Penalties
Given the correct classification and eligibility for exemption, the Tribunal found no merit in the demand for duty and interest. Consequently, the penalties imposed on both appellants were also set aside. The Tribunal referenced several Supreme Court decisions, including Indian Tools Manufacturers and Kumudam Publications (P) Ltd, to support its conclusions.

Conclusion:
The Tribunal allowed both appeals, setting aside the demand for duty, interest, and penalties, and confirmed the eligibility for exemption under Notification No 50/2003-CE for the goods classified under heading 48239013.