1995 (1) TMI 241 - AT - Central Excise

Summary

Issues:
Classification of printed cartons under Heading 4818.12, use of duplex board in manufacturing, classification under 4818.13, verification of materials used, remand for further investigation.

Analysis:
The case involves a dispute over the classification of printed cartons by the department. The respondents claimed classification under Heading 4818.12 and exemption under Notification No. 140/86, while the Assistant Collector suggested classification under 4818.13. The Assistant Collector eventually classified the product under 4818.12, leading to an appeal by the department. The Collector (Appeals) upheld the Assistant Collector's decision, prompting the department to file a petition.

The department argued that the printed cartons were not wholly made of materials falling under specified headings, as the respondents used duplex board in manufacturing. The respondents countered by stating that their cartons were made from materials falling under Heading 48.08, which is included in 4818.12. They explained the process of manufacturing corrugated cartons using corrugated paper and paperboard, emphasizing the necessity of these materials in the production process.

The department raised concerns about the use of duplex board, suggesting it fell under a different classification (48.05). The respondents clarified that the duplex board was essential for making corrugated board, which was classified under Heading 48.08. They highlighted that their classification was consistent with the materials used and approved by the authorities.

During the proceedings, both parties presented their arguments regarding the materials used in manufacturing the cartons. The department acknowledged that the respondents had correctly classified other articles falling under 48.08 and claimed exemption for them. The dispute solely revolved around the classification of printed cartons made from corrugated boards.

The Tribunal emphasized the importance of determining the parent material's classification to ascertain the correct heading for the product. It clarified that the immediate parent material's classification was crucial, disregarding the material from which the parent material was made. The Tribunal noted that further verification was necessary to confirm the materials used in manufacturing the cartons.

As no specific findings regarding material verification were recorded in the previous orders, the Tribunal set aside the impugned orders and remanded the matter to the Assistant Collector for thorough verification. The Assistant Collector was directed to consider the submissions from both parties, especially regarding the materials used, before making a final decision. The Tribunal highlighted the approved classification of other articles by the Assistant Collector, emphasizing the need to consider this while resolving the classification issue.