1980 (5) TMI 33 - CGOVT - Central Excise

Summary

Issues:
1. Classification of printed cartons for exemption from central excise duty under notification No. 55/75-C.E.
2. Determining whether printed cartons are products of the printing industry or the packaging industry.

Detailed Analysis:
1. The case involved a company manufacturing printed cartons seeking exemption from central excise duty under a specific notification. The Assistant Collector rejected the claim for exemption, but the Appellate Collector set aside the decision based on a previous case. The Government initiated a suo motu revision to review the Appellate Collector's order under section 36(2) of the Central Excises & Salt Act, 1944. The company contended that their case was similar to a previous case and eligible for exemption as products of the printing industry.

2. The company argued that printed cartons should be considered products of the printing industry due to the significant printing costs involved in the manufacturing process. They highlighted the various stages of printing and emphasized that printing constituted a major part of the total conversion cost. The company also pointed out that many cigarette manufacturers, who are registered printers, produce cartons in addition to their own printing activities.

3. The Government examined the submissions and observed that while printing is an essential part of producing printed cartons, the final product goes through additional processes like cutting and creasing to become a carton. The Government differentiated between products where printing is the final manufacturing process and concluded that printed cartons do not solely qualify as products of the printing industry for exemption under the relevant notification.

4. Referring to a previous case, the Government emphasized the importance of factual data in determining the cost breakdown for printed cartons. They highlighted the functions of packaging, including protection, preservation, communication, presentation, and convenience, which are essential aspects of the packaging industry. The Government also noted that the company had an industrial license for paper packaging, further supporting the classification of printed cartons as products of the packaging industry.

5. Considering all arguments and evidence presented, the Government determined that the printed cartons manufactured by the company should be classified as products of the packaging industry. As a result, the Government restored the original order passed by the Assistant Collector of Central Excise, denying the exemption claim for central excise duty on printed cartons.