1996 (7) TMI 371 - AT - Central Excise

Classification of paper bags under Tariff Heading 4819.90 upheld, retrospective demand time-barred. Appeal dismissed.

The paper bags were classified under Tariff Heading 4819.90 as per the lower authority's decision, upheld by the tribunal. The retrospective demand for ... Classification - Demand - Limitation Issues: Classification of paper bags under Tariff Headings 4819.29 or 4819.90 and retrospective application of demand for past six months.Classification Issue Analysis:The appeal concerns the classification of paper bags under Tariff Headings 4819.29 or 4819.90. The lower authority correctly classified paper bags under 4819.90, the residuary item, as per the tariff provisions. The statute categorizes cartons, boxes, containers, and cases under various sub-headings within 4819.11, 4819.12, and 4819.19, with the remaining items falling under 4819.90. Paper bags, being distinct from the specified cartons and boxes, are deemed to fall under the residuary item 4819.90 due to the flexible nature of bags compared to the fixed configuration of containers listed under 4819.12. The classification of paper bags under 4819.90 is upheld based on the tariff scheme and the characteristics of the items.Retrospective Demand Issue Analysis:Regarding the retrospective application of demand for the past six months after the change in classification, the appellant argued for a prospective application of any classification changes. However, citing a Supreme Court decision in the case of M/s. Ballarpur Inds. Ltd., the tribunal held that demands could be raised for the past six months following a classification revision. Upholding the lower authority's decision, the tribunal ruled that the demand in this case was time-barred, in line with the Supreme Court's precedent. Consequently, the appeal was dismissed on this ground.This judgment clarifies the proper classification of paper bags under the relevant tariff headings and establishes the retrospective application of demands following a classification change. The tribunal's decision aligns with established legal principles and precedents, providing clarity on these crucial issues.