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2015 (8) TMI 1233 - CESTAT CHENNAI

2015 (8) TMI 1233 - CESTAT CHENNAI - 2016 (331) E.L.T. 604 (Tri. - Chennai) - Classification of Flexible Intermediate Bulk Containers (FIBC) - Classification under Heading 392090 / 39232990 or 6305 32 00 - Held that:- The Board has issued the clarification for the purpose of All Industry Rates of Duty Drawback and categorically clarified that classification of the product FIBC under drawback tariff item 6305. It is pertinent to state that both the drawback schedule and ITC Code issued by DGFT an .....

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Explanatory Note 6305 3200 specifically includes description of FIBC. It is pertinent to state that prior to alignment of Tariff with the HSN Chapter 63 of CETH had only one sub heading i.e. 6301 till 1994-95. With effect from 2005 the Central Excise Tariff was aligned with HSN and the Chapter 63 expanded to include more sub headings from 6301 to 6310. - FIBC is rightly classifiable under 6305 3200 and not under 39232990 - Decied against Revenue. - E/76/2011,E/140/2012 & E/CO/7/2012,E/146 to 15 .....

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to classification of Flexible Intermediate Bulk Containers (FIBC) would fall under Chapter Heading 392090 / 39232990 or 6305 32 00 of CETH. 2. In the cases of Appeal Nos. E/76/2011 and E/146/2012, the Department issued show-cause notices to the respondents proposing to classify the goods FIBC under Chapter 3923 2990 as articles of plastics. The adjudicating authority in Order-in-Original classified the FIBC under Chapter 3923 2990. On appeal by the respondents, the Commissioner (Appeals) in the .....

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adjudication orders. Hence, Revenue has preferred these appeals. 4. Heard both sides and perused the records. 5. The learned AR for Revenue reiterated the grounds of appeal (A) to (I). He submits that as per Chapter Note 1 of Chapter 63 provides that the said Chapter applies only to made-up articles of any textile fabrics. This implies that only articles made up of textile fabrics are covered under Chapter 63 whereas FIBC is made from PP strips and classifiable under articles of plastics under .....

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2 dated 24.9.1992 issued under Section 37B of Central Excise Act, 1944 for uniform classification in respect of such goods and directed field formation that HDPE strips and tapes shall henceforth be classified under Sub Heading 3920.32 and sacks made there from under Sub Heading 3923.90 of the Tariff. He submits that the product merits classification under Chapter 39. On trade parlance, it is known only as plastics bags. Therefore, as per Rule 2 and 3 of Interpretative Rules classification of th .....

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as correctly classified the products under 6305 4200. They drew our attention to the HSN Explanatory Notes for both Chapter 39 and Chapter 63. As per HSN Note for Chapter 39 which clearly excludes articles of FIBC falling under 6305 correspondingly HSN Explanatory Note 63 specifically includes FIBC under 6305. They also relied on DGFT Minutes dated 25.7.2013 (at page 75 of paper book) where the issue of classification of export product FIBC had been considered by taking into the opinion given by .....

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.) wherein the Hon ble High Court at para 9 referring to DGFT and CBEC circulars held that FIBC are classifiable under Chapter 63. He also relied on Order-in-Appeal passed by Commissioner (Appeals), Ahmedabad dated 17.6.2014 wherein he classified FIBC under Chapter 6305 and the Department has accepted the classification and has not filed any appeal. He also relied on US International Trade Commission and Harmonized Tariff for the Tariff of 6305 3200 and submitted that US Tariff Commission has al .....

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nt in these appeals, and the adjudicating authority vide order dated 7.5.2015 dropped the proceedings and accepted the classification under 6305. 7. We have carefully considered the submissions of both sides and perused the records including HSN Explanatory Notes, Boards Circular relied by the Respondent and also grounds of appeal and the cross-objections. For the purpose of appreciation of facts, we take up Appeal No. E/76/2011 in the case of M/s. Karur KCP Packagings P. Ltd. 8. We find that th .....

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efit of rebate / drawback. This is evident from the Order-in-Original dated 13.8.2010 in the case of Karur KCP Packagings Pvt. Ltd. where the adjudicating authority in his order has classified the PP bags, FIBC under 39232900 and also ordered that all the goods exported and which were classified under 6305 from 17.4.2009 and 15.3.2010 shall be reclassified under Chapter 39. Therefore, this shows that that the classification had arisen for export goods not related to demand of central excise or r .....

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Paragraph 4.1 is reproduced below:- I have carefully gone through the appeal, oral / written submissions made by the appellants and also the provisions of law in the subject matter. The issues to be decided is whether the FIBC bags manufactured and exported by the appellant are rightly classifiable under CETH 3923 2990 or CETH 6305 3200. The tariff entries read as under:- Section VII Chapter 39: Plastic and Articles thereof 3923 Articles for the conveyance or packing of goods, of plastics; stop .....

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bulk container having the body made of flexible material such as woven fabrics, plastics film or paper, designed to be in contact with the contents, either directly or through an inner liner and collapsible when empty. Further, it is stated that FIBC is designed and intended to be used for a multitude of fillings and discharges. The Central Excise Tariff is based on HSN and it is specifically mentioned in the Chapter 3923 of HSN that; the heading excludes, inter alia, house hold articles .. and .....

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dling of dry, flow able materials. Therefore the FIBC manufactured by the appellant satisfy all the above conditions and hence are classifiable under CETH 6305.32 only. 10. Revenues main contention is that the product FIBC should be classified under 3923 as articles of plastics and not articles of textiles. They also relied on the decision of the Hon ble High Court of Madhya Pradesh in the case of Raj Pack Well (supra). On perusal of the said High Court order, we find that the entire issue relat .....

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h HSN. Since the classification of FIBC is linked with the export benefit, it is relevant to see para 13 of the Board Circular dated 22.9.2011 which is reproduced as under:- There has been a dispute regarding classification of FIBC (Flexible intermediate bulk containers). It has been represented that the field formations are classifying the FIBCs under Chapter 39 whereas the FIBC finds a specific mention under tariff item 630502 of the drawback schedule and the exporters are being denied drawbac .....

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larified that classification of the product FIBC under drawback tariff item 6305. It is pertinent to state that both the drawback schedule and ITC Code issued by DGFT and CETH are aligned with HSN, the classification issued by the Board assumes vital importance and Revenue cannot change the classification under Central Excise Tariff Chapter 3923. 12. Further, we find that Point No. 29 of the Minutes of the Meeting of DGFT held on 25.7.2013 clarified item FIBC which is reproduced as under:- The C .....

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as raw material. Therefore, it may be drawn that the textile grade polymers as a raw material are used to manufacture the tape / stripe / yarn etc. Since the process of manufacturing of FIBC involves extrusion of polypropylene strip from the polymers which further lead to weaving process on shuttle circular loom, therefore, FIBC is a technical textile. The Committee after deliberation decided that items in respect of Flexible Intermediate Bulk Containers are covered under ITC (HS) Code 63 and n .....

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