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2024 (2) TMI 560 - AT - Central ExciseClassification of goods - PP FIBC bags - to be classified under Chapter Heading 3923 2990 or under 6305 3200? - undervaluation with an intention to evade payment of duty - period from February 2009 to July 2009 - HELD THAT - With regard to classification, this Bench has already taken a view in the case of M/s. Big Bags Inda (P) Ltd. 2023 (6) TMI 1361 - CESTAT BANGALORE wherein it has been clearly held that items PP FIBC bags are rightly classifiable under Chapter 6305 3200. The demand of Rs.83,96,616/- along with interest and penalty is set aside - appellant has not disputed the issue of undervaluation and therefore, the demand of Rs.1,80,403/- along with interest and penalty is upheld. Appeal allowed in part.
Issues involved: Classification of PP FIBC bags under Chapter Heading 3923 2990 u/s Chapter 6305 3200, undervaluation leading to duty evasion.
Classification Issue: The appellant, a manufacturer of PP fabric products, was issued a show-cause notice challenging the classification of PP FIBC bags under Chapter Heading 3923 2990 instead of the claimed 6305 3200. The Tribunal referred to a previous case involving M/s. Big Bags Inda (P) Ltd. where it was established that PP FIBC bags are rightly classifiable under Chapter 6305 3200. Various circulars and meeting minutes were cited to support this classification, emphasizing that FIBC made of manmade textile material falls under Chapter 6305. Rulings from the Honorable High Court and US International Trade Commission further confirmed this classification. Consequently, the demand related to the misclassification was set aside, and the appeal was partially allowed on this issue. Undervaluation Issue: It was alleged that the appellant undervalued goods to evade duty payments during a specific period. The appellant did not contest this allegation, leading to a demand of Rs.1,80,403/- along with interest and penalty. The Tribunal upheld this demand, considering the lack of dispute from the appellant on the undervaluation issue. Therefore, the appeal was disposed of accordingly, with the undervaluation demand being upheld.
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