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CX - Valuation - Whether u/s 4 or 4A of CEA, 1944 - third schedule to Tariff does not cover toilet papers - pre-deposit of duty of Rs.1.19 Crores waived & stay granted: CESTAT

By TIOL News Service

MUMBAI, MAR 26, 2013: THE Commissioner of Central Excise, Pune-I confirmed a demand of Rs.1,19,46,341/- along with interest and penalty on the ground that the toilet paper which is manufactured and cleared by the applicant is assessable to duty under section 4A of the CEA, 1944 and not u/s 4 of the CEA, 1944 as was being done by the assessee.

The assessee is before the CESTAT and submits as follows -

+ Toilet papers are classifiable under chapter heading 4818 10 00 whereas handkerchiefs, cleansing or facial tissues and towel are classifiable under heading 4818 20 00.

+ The third schedule of the Central Excise Tariff covers cleansing or facial tissues, handkerchiefs and towels of paper pulp, paper, cellulose wadding or webs of cellulose fibres classifiable under Tariff heading 4818 of the Tariff.

+ Since toilet papers which are specifically classifiable under heading 4818 10 00 are not covered under the third schedule of the Central Excise Tariff, hence the applicants are not liable to pay duty as per the provisions of section 4A of the Central Excise Act.

The Revenue representative submitted that entry at serial no. 55 of the third schedule covers the goods cleansing or facial tissues falling under heading 4818 of the Tariff; that the applicant markets the goods in question as bathroom tissues thereby connoting similarity with cleansing tissues as the end-use of the subject goods is also cleansing; in these circumstances, the order of the adjudicating authority is justified.

The Bench observed -

"5. We find that under the Central Excise Tariff, toilet papers are separately classifiable than handkerchiefs, cleansing or facial tissues and towel and the third schedule to the Tariff does not cover toilet papers. In view of this, prima facie the applicants have made out a strong case in their favour. The pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal…."

In fine, the stay petition was allowed.

In passing:

Sr. no. 55 to notification 49/2008-CX(N.T) dated 24/12/2008 as amended -

55.

4818

Cleansing or facial tissues, handkerchiefs and towels, of paper pulp, paper, cellulose wadding or webs of cellulose fibres, other than goods falling under 4818 50 00

35

Now…where is the O-in-O…oops Toilet paper!

(See 2013-TIOL-511-CESTAT-MUM)


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