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TMI Blog2018 (11) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... product but the description of this CETH would indicate that it covers other forms of paper such as art paper, chrome paper, imitation art paper, insulating paper, kraft paper etc. There is no entry corresponding to paper which makes copies or imprints in this heading. CETH 4809 is a more specific entry for the product in question and therefore the appellant’s product has been correctly classified by Revenue under CETH 4809. Penalty - Held that:- Since a classification dispute is involved, we do not find sufficient grounds to allege malafide and to impose penalty upon the appellant - penalty set aside. Appeal disposed off. - APPEAL No. E/899/2008 - A/31427/2018 - Dated:- 14-11-2018 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Y. Sreenivasa Reddy, Advocate for the Appellant. Smt. B.V. Siva Naga Kumari, Commissioner /AR for the Respondent. ORDER Per: Mr. P.V. Subba Rao 1. This appeal is filed against Order-in-Appeal No. 49/2008(H-I)CE, dated 23.09.2008. The appellant herein is the manufacturer of coated paper of three varieties i.e. Coated Front, Coated Back and Coated front and back sides and the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , self-copy paper and other copying or transfer papers (including coated or impregnated paper for duplicator stencils or offset plates), whether or not printed, in rolls or sheets. CETH 4810 4810 Paper and Paperboard coated on one or both sides with kaolin (china clay) or other inorganic substance, with or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size. 3. He would assert that the classification adopted by Revenue is wrong for the reason that individual papers whether coated front or coated back or coated front back do not by themselves carry any impression and therefore they do not become self copying paper and only when appropriate sets of the front coated back coated and front and back coated papers are made, they serve the function of making copies. Therefore, Revenue is wrong in classifying their product as self copy paper. On the other hand, their product needs meets all the requirements of CETH 4810 inasmuch as their paper is coated with kaolin and other organic chemicals alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation art paper, kraft paper etc. Merely because the appellant is using kaolin as one of the ingredients for coating paper it does not cease to be self copying paper nor does it fall under CETH 4810. Therefore, the more specific description for the product manufactured by the appellant is a self copying paper and not coated paper. The product deserves to be classified under this head. The appellant themselves were aware of this classification and hence thereafter adopted a wrong classification with an intent to evade payment of duty. The appeal, therefore, needs to be rejected. 5. We have considered the arguments on both sides and perused the records. The short point to be decided is whether the paper manufactured by the appellant is to be classified as self copy paper under CETH 4809 or as a coated paper under CETH 4810. Initially, the appellant themselves classified the product under 4809 but had subsequently revised the classification under CETH 4810. The first appellate authority has discussed the issue in depth at paras 4 5 as follows: What is crucial is the classification of the product under the specific heading which covers the product. IT is the contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer papers in rolls or sheets of particular dimensions fall under heading 48.09. It is thus seen from the above explanatory notes of HSN, that all coated papers do not get classified under heading 4809 of the Central Excise Tariff. The appellants themselves had furnished a write up with regard to manufacturing process. It is seen that , besides the use of kaolin, other coating chemicals viz, CV Chemicals (consisting of Micro Capsule, binders such as dispersing agent) are used I the process of coating. As per the write up, the self-copy paper is used for getting the impression by chemical reaction on the said goods by mechanical pressure without insertion of carbon or any kind of paper. As per the Explanatory Notes under heading 4816 of HSN (which heading incidentally also covers, interalia, self copy paper conforming to certain dimensions), self copy papers also known as carbon less copy papers may be put up in fan fold forms. Pressure applied by means of an office machine or a stylus on the original sheet produces a reaction between two different ingredients normally separated from each other either in the same sheet and into adjacent sheet, reproducing the impress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it covers other forms of paper such as art paper, chrome paper, imitation art paper, insulating paper, kraft paper etc. There is no entry corresponding to paper which makes copies or imprints in this heading. In conclusion, we find that CETH 4809 is a more specific entry for the product in question and therefore the appellant s product has been correctly classified by Revenue under CETH 4809 and the same has been correctly upheld by the first appellate authority. Ld. Commissioner(AR) would also draw our attention to the judgment of Hon ble Apex Court in the case of CCE vs. Sundstrand Forms Pvt. Ltd. in Civil Appeal No. 4077 of 2003. The dispute therein was whether intermediary products which are not necessarily of the particular size could be classified as self copying paper and the Hon ble Apex Court held so. 7. On the question of penalty, we find that there is a reasonable ground for the appellant to have felt that the product may be classifiable under CETH 4810 and to have contested accordingly. Since a classification dispute is involved, we do not find sufficient grounds to allege malafide and to impose penalty upon the appellant. We, therefore, set aside the penalty imposed ..... 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