TaxTMI 
TaxTMI 
2018 (11) TMI 1020
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....ic heading. Revenue did not agree with this classification and demanded the differential duty. The appellant preferred an appeal to the first appellate authority against the confirmation of demand of duty with interest under section 11 AB and imposition of penalty, under Rule 25 read with Section 11 AC. The first appellate authority rejected the appeal and upheld the Order-in-Original passed by lower authority. Hence this appeal. 2. Ld. Counsel for the appellant takes us through the manufacturing process of their product and explains that they manufacture three varieties of paper (a) coated front paper, b) coated back paper and c) coated front and back paper. He explains that coated front paper is made with a mixture prepared in water medium by mixing Kaolin (China clay), binders, resin and dispersing agent while the coated back paper is quoted with a mixture prepared in water medium by mixing micro-capsule, binders, resin and dispersing agent. Both mixtures are used for coated front and back paper. They supply these papers as per the requirement of the customers, who in turn, print their necessary formats and make bill books, receipt books, invoice books etc. for use by ultimate ....
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....il upon the general entry of self copying paper. He further argues that the classification of their product should not depend on how the customer uses the product but how the goods are cleared from the factory and at that stage they are not a self copying paper. He also argued that this is a classification of dispute and even if it is held against them, penalty under Rule 25 read with Section 11 AC needs to be set aside. 4. Ld. Commissioner/AR takes us through the Order-in-Appeal and the products in question and explains that what is manufactured is the paper coated with kaolin as well as other materials, either on front or on back or on both sides depending upon the requirement of the customer. These papers are made into sets as per the requirement and necessary form of the bill, invoice etc. are printed by the customers of the assessee, who, in turn, sell these invoice books to the ultimate users. Therefore, the product in question is nothing but self copying paper. CETH 4809 does not require the self copy paper to produce an impression when used along with a plain paper, as asserted by Ld. Counsel for the appellant. The paper manufactured by the appellant is complete as a self ....
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....er papers (including coated or impregnated paper for duplicator stencils or offset plates), whether or not printed in rolls or sheets". Under this heading the sub heading 4809 20 00 covers self copy paper. I first take up the heading 4810 adopted by the appellants to see whether the product self-copy paper can be considered as a coated paper falling under that heading. The Chapter Notes under Chapter 48 of the Central Excise Tariff do not throw any light with regard to the scope of the heading 4810. A reading of the general Explanatory Note of Chapter 48 and the Explanatory Note under the heading 4810 of the HSN gives an insight into the nature of the product, coated paper. The explanatory notes under Heading 4810 of HSN reads as under...." "the inorganic substances, other than Kaolin (China clay), commonly used for coating include barium sulfate, magnesium silicate, Calcium carbonate, calcium sulfate, zinc oxide and powdered metal. The inorganic coating materials referred to in the heading may contain small amounts of organic substances for example, to enhance the surface characteristics of the paper". Further, the General Explanatory note under Chapter 48 of the HSN reads as ....
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....e self-copy paper is classifiable under the heading 4809 20 00 of the Central Excise Tariff, as held by the adjudicating authority. In view of my findings, I do not intend to interfere with the impugned order. Therefore appeal filed by appellants is rejected. 6. The appellant argues that the first appellate authority should not have placed reliance on the General Explanatory Notes to the HSN. We find force in this objection and proceed to decide the classification merely based on the CETH 4809 & 4810. CETH 4809 deals with the self copying paper. It does not indicate anywhere as to how the paper should be prepared or that the paper has to produce any impression when it is accompanied by a plain paper etc. A plain reading of CETH 4809 only indicates that it should be capable of making copies and it can be either in the form of rolls or sheets and it can be printed or otherwise. In this case, the paper in question is not printed and it is sold in rolls or sheets. The only point on which Ld. Counsel argues that it is not a self copying paper as it does not produce impression unless we make sets of the front, back and front & back coated papers in appropriate sets. He further argues t....