2017 (1) TMI 497 - HC - Central Excise

Commissioner upholds FIBC Bags classification, High Court grants Writ of Mandamus

M/s. Karur K.C.P. Packkagings Limited Versus The Commissioner of Customs, Central Excise & Service Tax (Appeals), The Commissioner of Central Excise, The Assistant Commissioner of Central Excise and Service Tax

The Commissioner of Customs & Central Excise (Appeals) upheld the original classification of FIBC Bags under CETSH 6305 32 00, rejecting the ... Star Export House - classification of HDPE / PP Bags, Flexible Intermediate Bulk Container (FIBC Bags) - classified under CETSH 6305 32 00 or under CETH 3923 29 90 - on the same set of facts for the subsequent period namely, 01.12.2013 to 31.10.2014, calling upon the petitioner to show cause notice as to why the product should not be re-classified under CETSH 3923 2990. Held that: - The petitioner has given a detailed reply dated 13.06.2015 for the above said show cause notice, stating that the show cause notice issued is totally invalid and without jurisdiction and further stated that the issue of classification of FIBC Bags is settled as CETSH 6305 3200 by the earlier order of this Court and also by the order passed by the Ministry of Finance Circular and Ministry of Commerce Norms Committee and by earlier orders of Appellate Authorities and requested to drop the show cause notice and requested for a personal hearing. As no final orders are passed so far, this writ petition has been filed. Petition disposed off - matter on remand. Issues:Classification of FIBC Bags under Central Excise Tariff Headings, Re-classification by Excise Authorities, Orders passed by lower authorities, Appeals before Commissioner of Customs & Central Excise, Dismissal of Department Appeals, Validity of Show Cause Notices, Jurisdictional concerns, Relief sought in Writ Petition.Classification of FIBC Bags:The petitioner, engaged in manufacturing and exporting FIBC Bags, classified them under CETSH 6305 32 00, contending they are goods of textiles. The Excise Range Officer directed re-classification under CETH 3923 29 90, leading to a dispute. Despite submissions, the Assistant Commissioner re-classified the goods, imposed a penalty, and amended the Registration Certificate. The Commissioner of Customs & Central Excise (Appeals) allowed the appeal, confirming the original classification under CETH 6305 32 00.Re-classification and Show Cause Notices:Subsequently, show cause notices were issued for different periods, repeating the re-classification demand. The petitioner argued the settled classification under CETH 6305 32 00 based on previous orders. The High Court directed authorities to consider explanations and pass final orders. The 3rd respondent issued multiple orders dropping proceedings under each show cause notice, leading to departmental appeals and subsequent dismissals.Validity of Show Cause Notices and Jurisdictional Concerns:The petitioner challenged the validity of show cause notices for lack of jurisdiction and absence of Central Excise Duty demands. Previous orders and authorities' decisions supported the petitioner's classification under CETH 6305 32 00, emphasizing the settled nature of the issue.Relief Sought in Writ Petition:The Writ Petition sought a Writ of Mandamus directing the 3rd respondent to adjudicate and pass a final order within a specified timeframe, emphasizing the need for a fair hearing and resolution of the classification dispute. The High Court granted the relief, directing the 3rd respondent to finalize the matter within eight weeks.This detailed analysis of the judgment highlights the classification dispute regarding FIBC Bags, challenges to re-classification, the validity of show cause notices, and the relief granted by the High Court for a timely resolution of the matter.