The New Delhi CESTAT in the case of M/s Keshwanand Chemicals (P) Ltd vs. CCE, denied countervailing duty exemption on disposable bed pads/ bed sheets which are not classifiable as the baby and clinical diapers.
The appellant claimed the above goods are classifiable as the baby and clinical diapers falling under Chapter Heading 48184010, the additional duty of Customs is 10%; whereas such product is classified under Chapter 48184090, the same is exempted from CVD in terms of Notification No. 10/2010.
On another side, the revenue relied on the appellate decision that since the imported goods have the absorbent quality the same should be rightly classifiable under Chapter 48184010 under the heading „baby and clinical diapers‟.
The Tribunal observed the fact that the said goods are not used for fastening the baby’s body to absorb the waste essentially having the characteristics of the disposable underpads which are technically known as disposable bed pads/ bed sheets.
While upholding the orders of the lower authorities, the division bench comprising Judicial Member S.K. Mohanty, and Techinical Member B. Ravichandran, “On going through the product literature and the sample piece of the goods produced by the appellant, we note that the product is essentially having the characteristics of the „disposable underpads‟ which are technically known as disposable bed pads/ bed sheets. Diapers are commonly understood as thick soft paper or cloth that is fastened around a baby‟s bottom/ between legs to absorb urine/ solid waste. Since the goods in question were not made for fastening into the body; the same in our considered opinion should not be termed as the baby and clinical diapers and should more appropriately fall under Chapter Sub-Heading of 48184090 which provides for other sanitary articles.”
Accordingly, the appeals were dismissed.
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