Coated Paper Imported in Rolls Classified under CTH 4810 13 90, Residual Entry Not Applicable: CESTAT [Read Order]

TheNew Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that coated paper imported in rolls should be classified under CTH 4810 13 90, not under the general category claimed by the importer.

Kasturi International Pvt. Ltd., the company that appealed, imported 50 GSM coated paper in rolls from South Korea and cleared it through a Bill of Entry on 8 May 2017.

The importer put it under CTH 4810 19 90 and claimed exemption under Notification No. 152/2009-Cus, based on a Certificate of Origin from the Korean authority. After getting some tips, officers from the Special Intelligence and Investigation Branch started a probe, claiming wrong classification.

Following intelligence inputs, officers of the Special Intelligence and Investigation Branch initiated an investigation alleging misclassification. A show-cause notice was issued proposing reclassification of the goods under CTH 4810 13 90, denial of exemption, and recovery of differential customs duty with interest.

The adjudicating authority accepted the department’s view and held that the goods were classifiable under CTH 4810 13 90 since they were imported in rolls. The order was upheld by the Commissioner (Appeals), prompting the importer to approach CESTAT.

Before the tribunal, the appellant’s counsel argued that the goods were correctly classifiable under CTH 4810 19 90, which covers “other” coated paper. In the alternative, the appellant argued that the goods should be classified under CTH 4810 29 00 claiming that the fibre content exceeded 10 percent by weight. The appellant also argued that similar goods had been cleared in the past under the same classification without objection.

The revenue counsel argued that classification must be decided strictly based on the tariff structure and physical form of the goods. The goods were undisputedly imported in rolls and they fell squarely under CTH 4810 13 which specifically covers coated paper in rolls. The revenue further argued that the alternative classification under CTH 4810 29 00 was unsupported by any document submitted at the time of import.

The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that under Heading 4810, the tariff is clearly divided based on fibre content and physical form. Once it was admitted that the goods were in rolls and contained less than 10 percent mechanically processed fibre, classification under CTH 4810 13 followed automatically.

The tribunal explained that CTH 4810 19 applies only to coated paper that is neither in rolls nor in sheets, and cannot be used when a specific entry for goods in rolls exists. The tribunal also pointed out that an assessee cannot take inconsistent stands on fibre content merely to bring the goods under an exempted tariff entry.

The tribunal upheld the classification of the imported goods under CTH 4810 13 90 and confirmed the demand of customs duty with interest.

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