CX - Valuation - If intention of legislature was to cover toilet paper also u/s 4A, then same would have been specifically mentioned in notification - Demand of Rs.1.2 Cr set aside and appeal allowed: CESTAT
By TIOL News Service
MUMBAI, JULY 02, 2014: THE appellants are manufacturers of toilet paper [CETH 4818 10 00] and the Revenue does not dispute this - that is, classification.
However, it is the allegation of the Revenue that the said ‘toilet paper' falls under Serial No.55 of the table annexed to Notification No. 49/2008-CE (NT) dated 24/12/2008 and, therefore, is liable to duty under Section 4A of the CEA, 1944 i.e. on the basis of RSP declared on the packages. The assessee, obviously, is resorting to section 4 valuation.
For easy reference, take a look at these -
+ The Tariff Entry
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4818
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Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of a width not exceeding 36 cm, or cut to size or shape; handkerchiefs, cleansing tissues, towels, table cloths, serviettes, napkins for babies, tampons, bed sheets and similar household, sanitary or hospital articles, articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres
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4818 10 00
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Toilet paper
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4818 20 00
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Handkerchiefs, cleaning or facial tissues and towel
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4818 30 00
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Tablecloths and serviettes
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4818 40
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Sanitary towels and tampons, napkins and napkin liners for babies and similar sanitary articles
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4818 40 10
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Baby and Clinical diapers
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Kg.
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Nil
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4818 40 90
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Other …….
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Kg.
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Nil
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4818 50 00
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Articles of apparel and clothing accessories
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Kg.
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8%
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4818 90 00
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Other ……
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Kg.
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8%
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+ Serial No. 55 of Notification No. 49/2008-CE(NT) reads -
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55.
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4818
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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
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35
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The CCE, Pune upheld the charges leveled and resultantly confirmed a duty demand of Rs.1,19,46,341/- along with penalties and interest.
Before the CESTAT, in the matter of the Stay application, the appellant had submitted thus -
++ 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 had inter alia submitted 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 while allowing the Stay petition 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…"
We reported this order as 2013-TIOL-511-CESTAT-MUM.
The appeal was heard recently and the appellant made submissions as earlier.
The AR while reiterating the findings of the adjudicating authority submitted that as per the dictionary meaning "cleansing" means to make clean. Since the appellant is clearing the toilet paper as ‘bathroom tissue paper', it would fall under entry No. 55 of the table annexed to the Notification No. 49/2008-CE(NT) and, therefore, the impugned demands are sustained in law.
The Bench after extracting the Tariff entry as well as the entry of the s.4A notification observed -
"4.2 From a reading of the tariff, it is abundantly clear 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."
Holding that the Toilet paper manufactured by the appellant, classifiable under 48181000, is liable to duty on the transaction value as per the provisions of Section 4 of the Central Excise Act and not under Section 4A of the said Act read with Notification No. 49/2008-CE(NT), the Bench set aside the order of the CCE, Pune and allowed the appeal.
(See 2014-TIOL-1177-CESTAT-MUM)
