Paper Print and Products Vs. Collector of C.E. - Court Judgment

Excerpt:
1. the question arising for decision in this appeal is classification for the purpose of central excise duty of the appellants manufacture printed waxed paper and un-waxed printed paper cut into sheets and reels for the period 17.3.82 to 20.1.86 when the appellants appear to have filed another classification list which has been approved exempting them from duty under notification no. 234/82, dated 1-12-1982 - whether the two fall under tariff item 68 as held by the lower appellate authority and the original authority or tariff item 17(2) and exempt under notification no 63/82, dated 28.2.1982? 2. the admitted position is that the appellants use duty paid poster paper as base material for their finished product printed waxed paper and un-waxed printed paper cut into sheets and reels. prior to 17.3.82, the appellants manufactures were hold classifiable under tariff item 17(2) and appellants were clearing the goods after paying 15% central excise duty availing of benefit of concessional payment under notification no. 71/77, dated 28.4.77. on 28.2.82, the central government issued notification no. 63/82 granting full exemption to converted paper falling under tariff item no. 17(2) if made from duty paid base paper. the appellants then filed classification list no. 3 of 1982, dated 17.3.82 claiming classification in respect of their two items of manufacture, classification under item 17(2) and benefit of nil rate of duty under notification no. 63/82, dated 28.2.82. in the opinion of central excise officers, the goods now appeared to be more appropriately classifiable under residuary tariff item 68 in place of tariff item 17(2) under which it was hitherto before classified and assessed. the assistant collector then served show cause notice dated 14.4.82 on the appellants stating that the goods appeared more appropriately classifiable under tariff item 68 and not 17(2) as claimed and cause be shown to the assistant collector why such approval be not accorded. after following the usual procedure, the assistant collector of central excise, bombay -i held the appellants manufacture classifiable under tariff item 68 without benefit of exemption under notification no. 104/82, dated 28.2.82. the order was upheld in appeal by the collector of central excise (appeals) bombay by order dated 2.5.82. hence the present appeal to the tribunal.3. at the hearing of the appeal, sh. v. lakshmi kumaran learned advocate for the appellants, explained the process of manufacture resorted to by the appellants. he explained that duty paid base paper is printed according to design and specifications of the customers depending on the requirement of the customer, cut or scored or put into reels. this is unwaxed printed paper. in the case of the other item, waxed printed paper, after printing as aforesaid is done, the same are subjected to waxing.4. at one stage, sh. lakshmi kumaran had stated that first duty paid base paper is waxed and then printed. this appears to be the sequence of process of manufacture in the order of lower appellate authority but sh. sunder rajan submitted that printing after waxing was technological impossibility and the collector (appeals) had wrongly put the sequence of process of manufacture in his appellate order. he also stated that for getting things in proper perspective, the matter may be remanded to the collector (appeals) but the request was strongly opposed by sh. v.lakshmi kumaran. questioned by the bench, sh. sunder rajan admitted that the sequence of process indulged in by appellants are in fact, as set out by sh. v. lakshmi kumaran above (para 3). in view of this admitted position, we have not considered it necessary to remand the matter to collector (appeals) for setting out the sequence of process in respect of waxed printed paper and propose to decide the appeal on the strength of arguments advanced before us. sh. v. lakshmi kumaran, learned advocate for the appellants, drew attention of the bench of the following two decisions -vikrant packers (pvt) ltd., chandigarh v. collector of central excise, chandigarhm. wadilal & co. pvt. ltd., ahmedabad v. collector of central excise, baroda relying on the first decision, he argued that in this decision, waxed printed paper had been held to be falling under tariff item 17(2) and not tariff item 68 of the first schedule to the central excises and salt act, 1944 and therefore, classification under tariff item 68 of this item should be set aside.5. relying on the second decision, he argued that according to this decision, printed sample folders though fall under item 68 of central excise tariff, they were held to be products of printing industry. the lower authorities were in error in not treating the same as a product of printing industry. their finding on this point should be set aside.6. sh. a.s. sunder rajan however, drew attention to a decision of andhra pradesh high court in golden press v. deputy collector of central excise, hyderabad and anr. - [1986 (9) ecc 317 (ap)] where printed cartons were held to be products of packing industry as distinguished from printing industry. he also frankly drew attention to the fact that tribunal in i.t.c. ltd. v. collector of central excise, madras [1987 (14) ecc t 398] had dealt with the decision. he also stated that decision in vikrant packers related to period 1978-79 when tariff was not the same. it is seen that tribunal in preference to a.p.decision inter alia preferred to follow the karnataka high court decision in rollatainers ltd. and anr. v. union of india and ors. [1984 (18) e.l.t. 217 (karnataka)] and held printed cartons being products of printing industry eligible to exemption under notification no.55/75-ce, dated 1.3.75 and no. 122/75, dated 5.5.75. sh. sunder rajan generally defended the impugned order.7. we do not think that sh. sunder rajan's submissions have the effect of making the two decisions relied on by sh. v. lakshmi kumaran not applicable to the present appeals. in view of the decision of the tribunal in vikrant packers ltd's case (supra), waxed printed paper must be held classifiable under tariff item 17(2) and benefit of exemption under notification no. 63/82, dated 28.2.1982 be accorded to them, subject to fulfillment of conditions, if any under the notification.as far unwaxed printed paper, in view of the tribunal decision in m.wadilal & co.'s case (supra), the same is held as classifiable under tariff item 68 and as being product of printing industry. benefit of exemption under the notification to be accorded to the appellants subject to fulfillment of conditions, if any, under the notification.

Judgment:
1. The question arising for decision in this appeal is classification for the purpose of Central Excise duty of the appellants manufacture Printed Waxed Paper and Un-waxed Printed Paper cut into sheets and reels for the period 17.3.82 to 20.1.86 when the appellants appear to have filed another classification list which has been approved exempting them from duty under Notification No. 234/82, dated 1-12-1982 - whether the two fall under Tariff Item 68 as held by the lower Appellate authority and the original authority or Tariff item 17(2) and exempt under Notification No 63/82, dated 28.2.1982? 2. The admitted position is that the appellants use duty paid Poster paper as base material for their finished product Printed Waxed paper and Un-waxed Printed Paper cut into sheets and reels. Prior to 17.3.82, the appellants manufactures were hold classifiable under Tariff Item 17(2) and appellants were clearing the goods after paying 15% Central Excise duty availing of benefit of concessional payment under Notification No. 71/77, dated 28.4.77. On 28.2.82, the Central Government issued Notification No. 63/82 granting full exemption to converted paper falling under Tariff Item No. 17(2) if made from duty paid base paper. The appellants then filed classification list No. 3 of 1982, dated 17.3.82 claiming classification in respect of their two items of manufacture, classification under item 17(2) and benefit of nil rate of duty under Notification No. 63/82, dated 28.2.82. In the opinion of Central Excise officers, the goods now appeared to be more appropriately classifiable under residuary Tariff Item 68 in place of Tariff Item 17(2) under which it was hitherto before classified and assessed. The Assistant Collector then served show cause notice dated 14.4.82 on the appellants stating that the goods appeared more appropriately classifiable under Tariff Item 68 and not 17(2) as claimed and cause be shown to the Assistant Collector why such approval be not accorded. After following the usual procedure, the Assistant Collector of Central Excise, Bombay -I held the appellants manufacture classifiable under Tariff Item 68 without benefit of exemption under notification No. 104/82, dated 28.2.82. The order was upheld in appeal by the Collector of Central Excise (Appeals) Bombay by order dated 2.5.82. Hence the present appeal to the Tribunal.

3. At the hearing of the appeal, Sh. V. Lakshmi Kumaran learned Advocate for the appellants, explained the process of manufacture resorted to by the appellants. He explained that duty paid base paper is printed according to design and specifications of the customers depending on the requirement of the customer, cut or scored or put into reels. This is unwaxed printed paper. In the case of the other item, waxed printed paper, after printing as aforesaid is done, the same are subjected to waxing.

4. At one stage, Sh. Lakshmi Kumaran had stated that first duty paid base paper is waxed and then printed. This appears to be the sequence of process of manufacture in the order of lower Appellate authority but Sh. Sunder Rajan submitted that printing after waxing was technological impossibility and the Collector (Appeals) had wrongly put the sequence of process of manufacture in his appellate order. He also stated that for getting things in proper perspective, the matter may be remanded to the Collector (Appeals) but the request was strongly opposed by Sh. V.Lakshmi Kumaran. Questioned by the Bench, Sh. Sunder Rajan admitted that the sequence of process indulged in by appellants are in fact, as set out by Sh. V. Lakshmi Kumaran above (para 3). In view of this admitted position, we have not considered it necessary to remand the matter to Collector (Appeals) for setting out the sequence of process in respect of waxed printed paper and propose to decide the appeal on the strength of arguments advanced before us. Sh. V. Lakshmi Kumaran, learned Advocate for the appellants, drew attention of the Bench of the following two decisions -Vikrant Packers (Pvt) Ltd., Chandigarh v. Collector of Central Excise, ChandigarhM. Wadilal & Co. Pvt. Ltd., Ahmedabad v. Collector of Central Excise, Baroda Relying on the first decision, he argued that in this decision, waxed printed paper had been held to be falling under Tariff Item 17(2) and not Tariff Item 68 of the first Schedule to the Central Excises and Salt Act, 1944 and therefore, classification under Tariff Item 68 of this item should be set aside.

5. Relying on the second decision, he argued that according to this decision, printed sample folders though fall under Item 68 of Central Excise Tariff, they were held to be products of printing industry. The lower authorities were in error in not treating the same as a product of printing industry. Their finding on this point should be set aside.

6. Sh. A.S. Sunder Rajan however, drew attention to a decision of Andhra Pradesh High Court in Golden Press v. Deputy Collector of Central Excise, Hyderabad and Anr. - [1986 (9) ECC 317 (AP)] where printed cartons were held to be products of packing industry as distinguished from printing industry. He also frankly drew attention to the fact that Tribunal in I.T.C. Ltd. v. Collector of Central Excise, Madras [1987 (14) ECC T 398] had dealt with the decision. He also stated that decision in Vikrant Packers related to period 1978-79 when Tariff was not the same. It is seen that Tribunal in preference to A.P.decision inter alia preferred to follow the Karnataka High Court decision in Rollatainers Ltd. and Anr. v. Union of India and Ors. [1984 (18) E.L.T. 217 (Karnataka)] and held printed cartons being products of printing industry eligible to exemption under Notification No.55/75-CE, dated 1.3.75 and No. 122/75, dated 5.5.75. Sh. Sunder Rajan generally defended the impugned order.

7. We do not think that Sh. Sunder Rajan's submissions have the effect of making the two decisions relied on by Sh. V. Lakshmi Kumaran not applicable to the present appeals. In view of the decision of the Tribunal in Vikrant Packers Ltd's case (supra), waxed printed paper must be held classifiable under Tariff Item 17(2) and benefit of exemption under Notification No. 63/82, dated 28.2.1982 be accorded to them, subject to fulfillment of conditions, if any under the notification.

As far unwaxed printed paper, in view of the Tribunal decision in M.Wadilal & Co.'s case (supra), the same is held as classifiable under Tariff Item 68 and as being product of printing industry. Benefit of exemption under the notification to be accorded to the appellants subject to fulfillment of conditions, if any, under the notification.