2017 (3) TMI 644 - AT - Central Excise

Classification of goods - printed paper products like inserts, Headers, Tags, Labels, Stickers, Envelopes, Belly bands, PVC bags, Stiffeners etc - classified under CETH 48211020 or CETH 49111030? - Held that - The impugned order is very cryptic and did not examine all legal provisions, more specifically chapter notes and HSN explanation alongwith nature of product manufactured by the appellant - The scope of classification under these three categories are to be specifically examined for a clear finding by the Jurisdictional officer - the claim of the appellant for exemption with reference to products cleared to exporters and who ultimately exported these goods with merchandise out of country, has to be examined for a finding - appeal allowed by way of remand.

Issues: Correct classification of printed paper products and printed polyester labels under CETH 48211020, CETH 49111030, and CETH 5807.

Analysis:
1. The appeal challenges the order of the Commissioner (Appeals) regarding the classification of printed paper products and printed polyester labels. The dispute revolves around whether these products should be classified under CETH 48211020 as paper or paper board labels or under CETH 49111030 as printed inlay cards. The appellant argues for classification under CETH 49111030, contending that the impugned order did not adequately consider their submissions and failed to examine the applicable Chapter Note and HSN explanation. The appellant highlights the diverse nature of their products, some of which are attached to goods while others are standalone, emphasizing the need for individual examination for proper classification.

2. The learned Counsel for the appellant asserts that the impugned order lacks a detailed examination of the grounds presented by the appellant and fails to address the specific characteristics of the printed paper products. Additionally, the appellant claims eligibility for exemption under a Board Circular for products cleared for export. The impugned order also contains unrelated findings regarding the denial of Cenvat credit without proper justification or reference in the show cause notice, raising concerns about procedural fairness and clarity in decision-making.

3. On the other hand, the Authorized Representative argues that the products in question fall under Heading 4821 according to Note 12 of Chapter 48 and the HSN explanation. Specifically, paper and paper board labels designed for attachment to articles for identification purposes are classified under Heading 4821. The nature and purpose of the products manufactured by the appellant are crucial factors in determining the appropriate classification under the Customs Tariff.

4. After hearing both parties and examining the appeal records, the Tribunal finds the impugned order lacking in detailed analysis of legal provisions, including chapter notes and HSN explanations, necessary for correct classification. The Tribunal identifies three categories of products involved: printed paper and paper boards used as inlays, paper board labels attached to products, and printed polyester fabric labels falling under different headings. The Tribunal emphasizes the need for a thorough examination by the Jurisdictional officer to determine the classification of each product category accurately.

5. Consequently, the Tribunal sets aside the impugned order and remands the matter to the Original Authority for a comprehensive assessment of the classification of all product types. The Original Authority is directed to consider the submissions and samples provided by the appellant, especially regarding products cleared for export. The Tribunal emphasizes the importance of providing the appellant with an opportunity to present their case and expects specific findings on the eligibility for claimed exemptions. The Tribunal also overturns the decision on denial of Cenvat credit due to lack of substantiated reasons.

6. In conclusion, the Tribunal allows the appeal by remanding the case for a detailed examination and classification of the printed paper products and printed polyester labels, ensuring procedural fairness and thorough consideration of all relevant factors before making a final determination.

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