Per Mr. AJAYAN T.V.

M/s. ICMC Corporation Ltd, a registered manufacturer and the Appellant herein, has preferred this appeal against the Order in Appeal No.399/2017 (CTA-I) dated 23-11-2017 passed by the Commissioner of GST & Central Excise (Appeals-1) (impugned order), whereby the appellate authority has upheld the order in original Sl.No.019/2016(AC) dated 22.12.2016 passed by the Adjudicating Authority classifying the product ‘Farmers Integrated Handbook’, manufactured by the Appellant under Chapter 4820 of the Central Excise Tariff Act, 1985 (CETA). The Appellate Authority, vide the impugned order, has also upheld the duty demand along with interest while reducing the penalty imposed to 50% of that imposed under Section 11AC.

2. The relevant facts are that the Appellant is engaged in the manufacture of Laminated Corrugated Mono Carton, Printed Paper Label etc. falling under chapters 48191090, 48219010 of the CETA. During the course of audit on 05-06-2014 and 06-06-2014, it was noticed that the Appellant had cleared (stock transferred) “Farmers Integrated Handbook” manufactured by them to their other unit situated at Trichy, without payment of duty by wrongly classifying them under chapter sub heading 49109900. While the appellant cleared the goods at Rs.7.5 per item from their factory, it was noticed that the said goods are ultimately sold by the Tamil Nadu Agricultural Department to their customers at Rs.8.5 per item on payment of sales tax. On physical verification of the said product, it was observed that the said product is a four folded paper board with only heading printed and columns left out to be filled during periodical intervals. It is to be issued to the farmers of Tamil Nadu by the Agricultural Department which is to be maintained for a three year period from 2013-14 to 2015-16. Photograph of the individual farmer with ID number should be provided. The unfilled columns with details of cultivated land area along with details of soil testing done periodically and fertilizer to be added in the soil periodically, details of various fertilizers/ pesticides / insecticides / appliances issued to the farmer under various schemes with signature of the agriculture officer periodically. On verification of the ER-1 return filed, it was noticed that they have not declared the manufacture and clearance of the said goods.

3. It appeared to the Department that the said product is a preprinted stationery in the form of Hand Book issued to the farmers by the Agricultural Department to be filled in periodically with various details and is therefore rightly classifiable under Chapter Heading 4820 as explained in Note 14 of Chapter 48 of CETA and accordingly exigible to duty on the clearance of these goods for the period from April 2013 to May 2013. Accordingly, a show cause notice dated 29.02.2016 was issued to the Appellant invoking the extended period of limitation alleging that the appellant had not furnished the details of manufacture and clearance of the ‘Farmers Integrated Handbook’ in their ER-1 return filed and but for the verification, the details regarding their manufacture and clearance without payment of duty would have gone unnoticed. The Appellant filed its reply contesting the allegations and after due process of law, the Adjudicating Authority vide the impugned order classified the goods under chapter 4820 of the CETA, confirmed the demand of duty proposed, ordered for vacation of payment of duty under protest and appropriated the duty paid, imposed equivalent penalty under Section 11AC. Aggrieved by the said Order, the appellant preferred an appeal before the Commissioner of GST & Central Excise (Appeals-I), Chennai who, however, vide the impugned order, upheld the order of the adjudicator, while reducing the penalty to 50% of the duty demand made. Aggrieved by the impugned order, having preferred this appeal, the Appellant is before this forum.

4. Shri. S. Gokarnesan, Ld. Advocate, appearing on behalf of