2018 (11) TMI 523 - AT - Central Excise

Classification of goods - Aseptic Packaging Paper - whether classified under CTH 481151/481159 or under CTH 481190? - Held that - Circular dated 26.07.2010 has clarified that aseptic packaging paper covered with plastic is classifiable under Tariff Item No.48115100 or 48115900 - the reliance for issue of show cause notice that the packaging material must contain plastic to qualify its description as aseptic packaging paper is not in accordance with above referred circular - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Tariff Item No.48119092, reliance on examination report, show cause notice validity, reliance on Circular No.21/2010-CUS, interpretation of Tribunal's Final Order, classification criteria for aseptic packaging paper.

Classification of Goods under Tariff Item No.48119092:
The appeal arose from an Order-in-Appeal passed by the Commissioner (Appeals) Customs, Central Excise & Service Tax, Noida, regarding the classification of goods manufactured by the appellant under Tariff Item No.48119092 of the Central Excise Tariff Act, 1985. The Revenue conducted an examination of the goods and found that they contained 95.2% paper and the rest was metal powder based on aluminum. The chemical examiner's report concluded that the goods did not have the characteristic of aseptic packaging paper, leading to a show cause notice being issued to the appellant to justify the classification. The Original Authority classified the goods under Tariff Item No.48119099, resulting in a demand for differential duty and a penalty. The appellant appealed this decision, arguing that the goods should be classified under Tariff Item No.48119092 as aseptic packaging paper.

Reliance on Examination Report and Show Cause Notice Validity:
The appellant contended that the lower authorities' decision was based on the absence of plastic in the goods, which they argued was not a valid reason for classifying the goods as not aseptic packaging paper. They referred to Circular No.21/2010-CUS issued by the Central Board of Excise and Customs, which clarified the classification criteria for goods laminated or coated with plastic. The appellant highlighted that the reliance on certain paragraphs of a Tribunal's Final Order from 1994 was misplaced, as those paragraphs were related to a different case concerning aluminum foil classification, not aseptic packaging paper. The Tribunal found that the show cause notice's basis, requiring the goods to contain plastic to qualify as aseptic packaging paper, was not in line with the Circular's classification guidelines, rendering the notice unsustainable.

Interpretation of Tribunal's Final Order and Classification Criteria for Aseptic Packaging Paper:
The Tribunal examined the contentions presented by both parties and concluded that the Circular dated 26.07.2010 clarified that aseptic packaging paper covered with plastic should be classified under specific Tariff Items. It was noted that the reliance on a minority decision in the Tribunal's Final Order from 1994 was not appropriate for the classification of the appellant's goods as aseptic packaging paper. Consequently, the Tribunal held that the show cause notice was not valid, set aside the impugned order, and allowed the appeal, granting the appellant consequential relief as per the law.

This detailed analysis of the judgment highlights the issues surrounding the classification of goods under specific tariff items, the validity of the show cause notice based on examination reports and legal interpretations, and the reliance on Circulars and Tribunal decisions for determining the classification criteria for aseptic packaging paper.