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of <h1>Tribunal upholds duty on pads, bags, overturns penalties.</h1> <h3>M/s Universal Offsets, Shri Vikas Gupta Versus CCE, Delhi-II</h3> M/s Universal Offsets, Shri Vikas Gupta Versus CCE, Delhi-II - 2018 (10) G. S. T. L. 386 (Tri. - Del.) Issues Involved:1. Classification of various products manufactured and cleared by the appellant.2. Dutiability of scrap of paper.3. Imposition of penalty on the appellant.Detailed Analysis:1. Classification of Various Products:a. Envelope/Outer/Jacket/Sim Sleeve or Pouch/Start-up Kit (SUK)/Kit:The appellant classified these under CETH 4817 10 00/4911 99 90, while the Revenue classified them under CETH 4819 50 90. The Tribunal held that these items are more appropriately classified under CETH 4817 10 00 as envelopes, as they are custom-made paper products used for specific purposes and not general packing containers.b. Forms:The appellant classified forms under CETH 4911 99 90, while the Revenue classified them under CETH 4820 10 90. The Tribunal, referencing a Board circular, concluded that these forms should be classified under CETH 4911, as the printing on these forms is not merely incidental.c. Carry Bags:The appellant classified carry bags under CETH 4911 10 90, while the Revenue classified them under CETH 4819 40 00. The Tribunal agreed with the Revenue, stating that the printing on these carry bags is incidental, making the more appropriate classification under CETH 4819.d. Score Cards:The appellant classified score cards under CETH 4909 00 90, while the Revenue classified them under CETH 4820 10 90. The Tribunal held that the extensive printing on these score cards gives them their essential character, thus classifying them under CETH 4909.e. Hangers - Mill Board/Plastic:The appellant classified hangers under CETH 4911 10 90, while the Revenue classified them under CETH 4823 70 30 or 3928 90 69. The Tribunal, referencing previous decisions, held that these hangers should be classified under CETH 4911 as the printing is not incidental but intended to advertise the products.f. Printed Sheet/Printed Matter:The Tribunal noted that no specific discussion or classification was recorded in the impugned order. They concluded that these printed loose sheets, mainly used for advertisements or messages, should be classified under CETH 4901.2. Dutiability of Scrap of Paper:The original authority denied exemption on scrap paper, claiming insufficient evidence that the scrap was generated from printing educational text books. The appellant argued that they are engaged in printing, not manufacturing paper, and referenced previous Tribunal decisions that waste and scrap from duty-paid paper do not attract excise duty. The Tribunal agreed with the appellant, finding no justification to demand excise duty on the scrap paper arising during the production process.3. Imposition of Penalty:Considering the nature of the dispute and the detailed analysis of classification issues, the Tribunal found no reason for imposing penalties on the appellants. The penalties were set aside, and the duty demand on carry bags was restricted to the normal period, as the issue involved was one of tariff interpretation.Conclusion:The Tribunal upheld the classification and duty demand for pads and carry bags. For other items, the Tribunal found the classifications and duty demands by the Revenue unsustainable. Penalties imposed on the appellants were set aside, and the appeals were disposed of accordingly.
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