1. The above appeal and the Cross Objection have been filed by the Department and the Respondents assessee respectively against the captioned order passed by the Commissioner of Central Excise, Bombay, holding that the paper on which the caption Cadbury's Dairy Milk is printed is classifiable under Tariff sub-heading 4818.12 or 4818.13 of the Central Excise Tariff Act, depending upon the constitution.
2. It is the case of the Department that the product comes within Tariff Heading 4818.90 and not under sub-heading 4818.12 or 4818.13 as held by the Commissioner (Appeals). It is the case of assessee respondent that the product in question should be classified under sub-heading 4901.90 as according to them, it does not come under sub-heading 4818.12 or 4818.13 as was held by the Commissioner (Appeals).
3. The facts of the case are as follows : The assessee respondent are the manufactures of various types of articles of paper namely labels, dairies, folders, wrappers, covers etc. A classification list was filed by them claiming the product under sub-heading 4901.90 as items of printing industry and the claim Nil rate of duty. A Show Cause Notice dated 9-9-1986 was issued to the assessee respondent as to why the product in question could not be assessee and classified under Chapter 48. A reply was given by the respondent. The Assistant Collector by order 66/87, dated 10-8-1987 held that the product in question was on item coming under sub-heading 4818.90 of the Central Excise Tariff Act, and assessed to duty at the rate of 12% and not under sub-heading 4901.90. Incidentally there were other products manufactured by the respondent some of which were classified by the Assistant Commissioner under subheading 4818.90 and some were classified under sub-heading 4901.90 of the Central Excise Tariff Act. The respondent filed on appeal before the Commissioner of the Central Excise (Appeals) Bombay who by the impugned order had held that the item in question in the present appeal would be classified under sub-heading 4818.12 or 4818.13 depending upon the constitution. Both parties have assailed the impugned order.
4. Shri K.M. Mondal the ld. SDR submitted that the Collector had erred in holding as stated above. He would argue that the sub-heading 4818.12 clearly mentions that printed cartons containers boxes and cases where as wrappers are only printed one. But not in the form of boxes on containers. Shri K.M. Mondal would further argue that the Commissioner (Appeals) had filed to differentiate between the product Containers, boxes and the wrappers and arrived at the wrong conclusion that the product in question is classifiable under sub-heading 4818.12 or 4818.13. He would state that the product wrappers are being used in different ways, than the cartons or boxes which are used for packing of goods cartons or boxes are used for holding the goods. But in case of product, wrappers they are cut to size according to requirement of the goods which are to be wrapped by them. As such, therefore, it is argued by the DR that there is vast difference between printed cartons boxes etc. and the printed wrappers. It is strenuously urged by the DR that while arriving at a particular classification the form and function of an item as well as its commercial issue should also to be taken into consideration. He therefore, contends that taking into consideration of the form of the "Wrappers" they are correctly to be classified under sub-heading 4818.90 as an article of paper. He relied on the Judgment of the Supreme Court in Rollatainers Ltd. v. Union of India -1994; (72) E.L.T. 793 (S.C.). He also relied on the statement made at page 686 of HSN.5. Mr. Bakshi the ld. Counsel for the assessee respondent would also assail impugned order as stated in his clients the memorandum of cross objections. In short he would argue that the finding given by the Commissioner (Appeals) that the product wrapper would be classifiable under sub-heading 4818.12 or 4818.13 is absolutely wrong. On the other hand the product comes within the term printing material would say that it would come under subheading 4901.90 i.e. it would come within the term "other products of the paper printing industry" found in Heading 4901 of the tariff. He would urge that the product cannot be turned as a wrapper, but a product of the printing industry. He would emphatically state that the decision of the Supreme Court in Rollatainers case (Supra) could not be applicable to the fact of the case as in the case before the Supreme Court Carton was the subject in dispute and in this case printing papers are in dispute. He would further state that the difference between wrapper and carton are that in case on hand the Chocolate is covered on all sides by Aluminium foil and over that the printed paper covered length wise product in the colour required by the Chocolate manufacturer namely Cadbury's.
Moreover the wrapper is open on both sides so it cannot be equated with carton which is enclosed on all sides. The Chocolate slides through the printed material, hence the facts are different. He would also argue emphatically that it would come only within the term "other products of the printing industry", as contained under Heading 4901 and this will come within subheading 4901.90 other. The impugned order he would argue therefore, that the finding made thereunder without any reason is nonest in law. He would further argue that the printed wrapper are product of printing industry for the reason that the printed matter thereon clearly identifies the contents of the said wrapper and in certain cases its ingredients and/or direction as to the user thereof.
He would urge that the printing on the said wrapper is indispensable to the function of the wrapper as the product here is not only to cover but also to identifying the contents thereof and to import information thereto. He also stated that due to superior printing technology the method of printing used as to adds the value of the product.
6. We have considered the rival contentions. The matter relates to the classification of printing wrapper to covering over the Cadbury Chocolate which is already covered with Aluminium Foil and should it be classified under sub-heading 4812.12 or 4818.13 or 4818.90 or 4901.90 of the Central Excise Tariff Act.
7. The Assistant Commissioner in his order has mentioned about the product. We wish to extract the same for elucidation.
"The wrapper manufactured by the party is meant for wrapping of Cadbury. It is not only giving information of the product but is used for wrapping of Cadbury i.e. it has double use and hence it cannot be considered as a product of printing industry and as such classifiable under Heading 4818.90 with rate of duty @ 12% adv.".
The wrapper have been seen by us. It is a paper cut to size printed on one side in the required colour and design of the manufacture of the Chocolate. It also gives information of the product it wraps with glue, paste or gum on both sides so that the paper is wrapped over the Chocolate. To us, it seems to be obvious that the product is used as a wrapper i.e. to wrap the chocolate. In this case the Aluminium Foil covered chocolate. The information, colour and design of the printed matter is only incidental to the main function of wrapping the chocolate by means of glue very gum. Otherwise why the gum is used on both sides of wrapper lengthwise.
8. Learned Counsel for the assessee vehemently tried distinguished Rollatainers case (Supra) by stating that in that case carton was the subject matter of the decision and in this case it is paper material.
This matter need not deter us, and it is not res Integra Supreme Court in the case of Collector of Central Excise Bombay v. Paper Print Product Co. -1996 (88) E.L.T. 317 (S.C.) has explained the judgment of Rolla Tainers case (Supra) and held that Rolla Tainers case will be applicable to cartons as well as materials used for packaging purposes.
We quote the judgment.
The short question which we are required to consider in the instant case is whether unwaxed printed paper cut into sheets and reels according to the needs of the Customer for the purpose of being used as a wrappers in packaging can be said to be product of printing industry so as to attract the exemption granted under Notification No. 63/82, dated 28-2-1982. The issue stands squarely covered by the decision of this Court in Rollatainers Ltd. and Anr. v. Union of India - 1996 (62) E.C.R. 274 (S.C.). In paragraph 11 of the said Judgment this Court held that the exemption Notification could not apply to material which is used for packaging purpose even if something is printed thereon. It would still be described as a product belonging to the packaging industry and not printing industry. We therefore hold that the view taken by the Tribunal need to be reversed.
9. It would be relevant to refer to some detail Rollatainers case (Supra). In paragraph 9, the Supreme Court held as follows: "Earlier the printing activity was primarily confined to printing of books, literature, newspapers and periodicals etc. The advanced printing industry covers a much wider field of activity than it did in the past. Can we, therefore, say that every material on which printing work is done becomes a product of printing industry? The answer has to be in the negative".
In the latter portion of the said paragraph the Supreme Court approved the reasoning of Karnataka High Court, which are as follows.
The mere fact that something is printed is on a product by itself does not make it a product of the printing industry.
The printing cartons are designed at times to make the product attractive for the purchasers, and at time to identify the goods and highlights its qualities and at times to identify the manufacture of the goods. All the same carton remains a carton is used for packaging purposes".
The above two propositions propounded by the Division Bench of the Karnataka High Court in Rollatainers case have been approved by the Supreme Court. The Supreme Court also in paragraphs 10 & 11 of the said judgment has approved the some other finding of the Division Bench of the Karnataka High Court they are as follows : "So viewed a paper carton, whether printed carton whether printed or not must be classified as a product of the packaging industry; and not a product of the printing industry ... what makes it a cartons is its capacity to contain which is essential characteristic and not the printing work point which is merely incidental".
"We agree that the reasoning and the conclusion urged by the Division Bench of the High Court. What is exempt under the Notification is the "product" of the printing industry". The "product" in this case is the carton. The printing Industry by itself cannot bring the cartons into existence. Any amount of fancy printing on a cardboard would not make it a carton. In a process of manufacturing printed cartons, the cardboard has to be cut, printed, creased and given the shape of a carton by using paste or gum.
Simply because there are expensive prints on the cartons such a printed carton would not become the product of the printing industry. "It shall remain product of the packaging industry".
10. In this case the printed paper is the wrapper used as such with gum or paste applied on both sides of the paper wraps the chocolate. The printed matter is incidental to the act or function of wrapping the Chocolate.
11. We would also refer to the case decided by the Supreme Court in the case of Metagraphs Pvt. Ltd. v. Collector of Central Excise, Bombay - 1996 (17) R.L.T. 621 (S.C.). In that case Supreme Court considered the question whether labels printed on flat off set printing press and that printing is done on deep offset printing machine is to be treated as an object of printing industry or not and eligible for exemption under Notification 55/75, dated 1-3-1975. There the Supreme Court held, after referring to Rolla Tainers case (Supra) that the product was of printing industry and distinguished Rollatainers case. But it must be emphasised that in this case product is a paper wrapper i.e. packaging product and it is not attached on fixed on the other product. In the case of Metagraphs case (Supra) the other product is Refrigerator on which the label was fixed or attached (please see para 7) of the Judgment, whereas in the instant case the other product was a chocolate which is wrapped by the product in question which is not a product of printing industry. In paragraph 7 of the Judgment it is held as follows : "The labels in question are printed on flatbed offset printing press and printing is done on a deep offset printing machine. These lables are meant to be fixed to Refrigerators, radios, air conditioners, telephone set etc.
"According to the appellants ... to which the printed Aluminium plate is attached".
In para 11 of the judgment the reasoning is that but for the printing the aluminium labels would serve no purpose. Assuming for one moment without admitting printing a plain paper with paste on both sides is wrapped on the chocolate, will not function of wrapping takes place.
The answer is obviously in the affirmative. The Judgment of the Supreme Court in Metagraphs case (Supra) is not applicable to the facts of the case under consideration. The Supreme Court Judgment in Rollatainers case is applicable to the facts of this case as it has been explained to be so by the Supreme Court in the Paper Print of Products case (Supra) that Rollatainers case applies not only to cartons but to packaging products as in both cases printing was held to be incidental to fact of packaging i.e. wrapping and the product in question cannot be treated as coming within the term "other product of the paper printing industry" contained in Chapter Heading 4901.90. But the product in question is classified as a product coming within Chapter sub-heading 4818.90 i.e. other articles of paper. The Revenue appeal is allowed and the cross objection of the assessee respondent is dismissed.