By TIOL News Service

MUMBAI, JAN 22, 2018: THE appellant, a declarant, is engaged in the manufacture of Rondo Trays, E Flute Cartons and Printed Duplex Cartons.

On investigation, the officers opined that the product Rondo Trays are correctly classifiable under CH 4819.19 attracting duty of 8% (read with SSI exemption) and not under CH 4819.12 @ Nil rate since the product is appropriately classifiable as ‘Other packing containers (not of corrugated paper or paper board)'; that the assessee had mis-declared the product as "Corrugated Rondo Trays".

The demand notice was confirmed leading to the present appeal before the CESTAT.

The appellant supported the classification adopted by them and also submitted that the demand is time barred as extended period was invoked in the SCN although they had been filing declaration under Notification No. 13/92-CE (NT) dated 14/05/92 wherein the product corrugated rondo trays were declared under chapter 4819.12; that they had filed letter dated 14/11/95 wherein the activity of manufacture of printed rondo trays was informed. [ Daga Ayurvedic & Cosmetic Pvt. Ltd. - 2007-TIOL-1156-CESTAT-MUM refers.]

The AR submitted that the box under question is made of duplex board and not of corrugated board; that inner side of the board is having the shape of corrugation but that is for packing vials, ampoules etc.; that the entire box is made up of plain duplex board and, therefore, is correctly classifiable under Chapter heading 4819.19. It is further submitted that a report was sent by the Commissionerate along with copies of declaration and letter dated 14/11/95 filed by the appellant to the department and it is observed that the declarations were different from the copies produced which indicated that they are forged. Inasmuch as the same strengthened the claim of the Revenue that the appellants have not only suppressed the fact but also tried to defraud the revenue.

After considering the submissions and the sample box produced before it, the Bench inter alia observed -

++ We find that the sample box placed before us shows that the box is made of plain duplex board. Inside the box there is a compartment for storage of ampoules, vials. This compartment which the appellant is claiming that it is corrugated paper accordingly it is corrugated box. We do not agree with the contention of the appellant.

A photograph of the opened box (as below) was reproduced by the CESTAT in its order and it was noticed that -

++ It can be seen that the corrugation portion claimed by the appellant is not actually corrugated paper or paper board, it is only a shape of the compartment for keeping ampoules and vials. The whole box is made of plain duplex board. The corrugated box is only those boxes which are made of corrugated paper or paperboards. In case of corrugated paper or paperboard, first the paper is corrugated either one side or other side paper is pasted then it takes the form of corrugated paper or paperboard. Therefore, this corrugated paper or paperboard is used for making the entire box that means all side of the walls of the box is made of corrugated paper or paperboard which is not the case here.

Extracting the the HSN description of "Corrugated paper and paperboard", the Tribunal further observed -

++ From the above description of the corrugated paper and paperboards it can be seen that the corrugated paper and paperboard is made of single faced or double faced corrugated layers. From this sort of paper, if box is manufactured it will be called as corrugated box. Therefore, as per the facts of the present case, the box in question is not made up of corrugated paper or paperboard but it is made of plain duplex boards. Therefore, it is correctly classifiable under Chapter heading 4819.19.

Limitation:

++ We find that the documents submitted to the department contain different description as compared to copies of the same letters/declaration provided by the department under a cover of letter. For example, in the declaration provided by the department contained the Chapter heading 48 only whereas the copies submitted by the appellant along with bill is suffixed six digits chapter heading number by hand written. The letter dated 14/11/95 is also different from the letter said to have been submitted to the department. This claim shows that the appellant tried to mislead the department as well as the Tribunal. Moreover, in the declaration, the appellants have declared corrugated rondo trays.

Conclusion: Since the packing box is not manufactured out of corrugated paper or paperboard, declaration by the appellant as 'corrugated rondo trays' is misleading to the department. Therefore, there is a clear suppression of fact on the part of the appellant. Accordingly, demand for extended period is also clearly sustainable.

The impugned order was upheld and the appeal was dismissed.

(See 2018-TIOL-277-CESTAT-MUM)