Tariff classification of corrugated board supported exemption for printed cartons made from 3-ply paperboard

Printed cartons made from 3-ply corrugated board qualified for exemption under Notification No. 59/88 because the decisive factor was whether the cartons were made from paper or paperboard falling within the specified tariff description, and the use of duplex board in the manufacturing process did not by itself defeat the exemption. The corrugated board was also held classifiable under Heading 48.08, as the HSN Explanatory Notes recognise corrugated paper and paperboard constructed with corrugated and flat layers, including heavier boards built up with successive plies. The relevant inquiry was the classification of the immediate parent raw material of the cartons, and the exemption claim was accepted.

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Issues: (i) Whether printed cartons manufactured from 3-ply corrugated board were entitled to exemption under Notification No. 59/88; (ii) whether the corrugated board used by the assessee was classifiable under Heading 48.08 of the Central Excise Tariff Act, 1985.

Issue (i): Whether printed cartons manufactured from 3-ply corrugated board were entitled to exemption under Notification No. 59/88.

Analysis: The exemption applied to printed cartons made wholly out of paper or paperboard under the specified tariff headings, subject to the condition that no credit had been taken on inputs used in their manufacture. The decisive consideration was the character of the material from which the cartons were made. Since the cartons were produced from corrugated board that answered the relevant tariff description, the mere fact that duplex board was used in the process did not defeat the exemption.

Conclusion: The exemption under Notification No. 59/88 was available to the assessee.

Issue (ii): Whether the corrugated board used by the assessee was classifiable under Heading 48.08 of the Central Excise Tariff Act, 1985.

Analysis: The HSN Explanatory Notes to Heading 48.08 recognise corrugated paper and paperboard as material that may consist of a single corrugated layer or be combined with flat surface sheets on one or both sides, and heavier boards may be built up with successive plies. On that basis, 3-ply corrugated board fell within the scope of Heading 48.08. The relevant test was the classification of the board as the immediate parent raw material for the cartons, not the manner in which the board itself was manufactured.

Conclusion: The corrugated board used by the assessee was classifiable under Heading 48.08.

Final Conclusion: The denial of exemption was unsustainable, and the appeals succeeded with the exemption claim accepted.

Ratio Decidendi: For exemption linked to specified tariff headings, the relevant inquiry is whether the immediate parent raw material of the final product falls within the specified heading, and corrugated board built up with plies and flat sheets can fall under Heading 48.08 according to the HSN Explanatory Notes.

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