2014 (8) TMI 284 - AT - Central Excise

Classification of goods is per exemption notifiation - Toilet paper - Classification under CETH 48181000 - Sr. No. 55 of Notification No. 49/2008-CE (NT) dated 24/12/2008 - The appellant s contention is that entry at Serial No. 55 of the said Notification covers goods falling under CETH 48182000, which covers handkerchiefs, cleansing or facial tissues and towels. - Revenue contended that, the said entry does not include toilet paper falling under CETH 48181000 and therefore, the appellants are not required to discharge excise duty liability on toilet paper under Section 4A of the Act on the basis of RSP. Held that - the tariff itself distinguishes between the toilet paper and cleansing or facial tissues. While toilet paper falls under CETH 48181000, cleansing or facial tissues fall under 48182000. Further, the description of goods under serial No. 55 of Notification No. 49/2008 matches exactly with the tariff description of goods falling under CETH 48182000. If the intention of the legislature was to cover toilet paper also under Section 4A, then the toilet paper would have been specifically mentioned in the notification No. 49/2008. Therefore, there is merit in the contention of the appellant that toilet paper is not covered under entry vide serial No. 55 of Notification No. 49/2008. We also observe that wherever the legislature wanted to cover all goods falling under a particular heading, they have stated so in the Notification No. 49/2008. For example, in respect of the goods falling under CETH 3819 vide serial No. 49 of the said notification, all goods falling under said heading has been specified in the Notification. This also supports the contention of the appellant that what is covered under Serial No. 55 is only cleansing or facial tissues falling under CETH 48182000 and not toilet paper which is classifiable under 48181000 - Decided in favour of assessee.

Summary

Issues:
Classification of toilet paper under Central Excise Act - Section 4A vs. Section 4

Detailed Analysis:

Issue 1: Classification of toilet paper under Central Excise Act - Section 4A vs. Section 4

Appellant's Argument:
The appellant, a toilet paper manufacturer, contends that their product falls under CETH 48181000, distinct from items covered under Serial No. 55 of Notification No. 49/2008. They argue that toilet paper should be assessed under Section 4, not Section 4A, as per their discharge of duty liability based on transaction value. The appellant highlights ISI standards compliance for toilet paper specifications, emphasizing differences in water absorbency and tensile strength compared to cleansing tissues. They assert that the department was aware of their duty payment method since 2009, challenging the extended period demand basis.

Revenue's Argument:
The Revenue asserts that toilet paper, labeled as bathroom tissue paper, falls under entry No. 55 of Notification No. 49/2008 due to its cleansing purpose, justifying the duty demands imposed by the adjudicating authority.

Judgment:
Upon reviewing the tariff entries and Notification No. 49/2008, the Tribunal finds a clear distinction between toilet paper (CETH 48181000) and cleansing tissues (CETH 48182000). The description under Serial No. 55 aligns with goods classified under CETH 48182000, not toilet paper. The Tribunal notes that legislative intent to include toilet paper under Section 4A would have explicitly mentioned it in the notification. Comparatively, where all goods under a heading are intended to be covered, the notification specifies so. As a result, the Tribunal rules in favor of the appellant, concluding that toilet paper should be assessed under Section 4 based on transaction value, not Section 4A with Notification No. 49/2008. The appeal is allowed, and the impugned order is set aside.

This detailed analysis of the judgment addresses the classification issue of toilet paper under the Central Excise Act, distinguishing between Sections 4A and 4 based on the specific tariff entries and notification provisions.