9911796707
TMI Blog2011 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... short "the Tariff Act"] and, therefore, the said articles are chargeable to NIL rate of duty. 4. Multi copies of computer stationery are manufactured either by inserting carbon paper between the two sheets of paper or by chemical treatment of the paper to make itself copying [carbonless stationery]. 5. The carbonless paper is a chemically treated paper used for producing impression of the writing or manuscript of the original paper on the other paper sheet. Such carbonless paper, which is a kind of copying paper is processed firstly by printing, which is done at pre-fixed places of the paper with the purpose of printing names of the buyers, logo or some other words as desired by the buyers and after the said process is over the printing paper is then passed through coating unit for applying chemical to develop the character of self-copying paper. The backside of the paper is coated to obtain top copy and front coating is done on the sheet which is to be used as bottom copy. The next step, which is the final step, is to get chemically coated copy passed through the coating unit for perforation, punching and fan-folding. 6. There is also no dispute with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notices were also issued on the same issue to the respondents for raising the demand of duty in terms of Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944 and invoking penal provisions. 10. Notice issued by the Department mentioned that the respondent-company is engaged in evasion of duty on carbonless paper which emerged at the intermediate stage during the course of manufacture of carbonless stationery from the plain paper. Therefore, the Department demanded Central Excise duty at the intermediate stage when the paper is coated to make it carbon less paper or self-copying paper. Notice alleged that the carbonless paper is a separate commodity, different from plain paper, and its user is also different from the ordinary paper. The carbonless paper emerged on subjecting certain process, i.e., application of chemicals and printing which was done to describe the name of the buyer and other details relating to which ultimately the paper was to be used for in the present case. The printing was only incidental to the carbonless paper emerging at the intermediate stage and that the printing was not in any way necessary for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity prospect and capability. 16. The counsel appearing for the appellant argued that the intermediary product with which we are concerned falls under Heading No. 48.09 read with 48.16 of the Schedule to the Central Excise Tariff Act whereas according to the counsel appearing for the respondent-company the same falls under the Heading 48.20 or under sub heading 4901.90 of the Schedule. 17. In support of his contention, counsel appearing for the respondent-assessee relied upon the Circular dated 15.10.1991 issued by the Central Board of Excise and Customs, Government of India, New Delhi, which was issued in relation to classification of paper printed with a format of air line tickets or embarkation/disembarkation cards and submitted that they were under a bona fide belief in view of the said circular that no duty was attracted on the printed coated paper arising at the inter mediate stage during the continuous process of manufacture of carbonless computer stationery and that in the said circular it was clarified that formats (of airline tickets, embarkation cards, etc.) which have ink deposited at appropriate places on the reverse side, instead of being classified un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Tariff Act. Para 2A of the same provides that any reference in a heading to the goods shall be taken to include a reference to those goods incomplete or unfinished, provided that, the incomplete or unfinished goods have the essential character of the complete or finished goods. Para 3 thereof provides that when goods are classifiable under two or more headings, classification should be effected by relying on the heading which provides the most specific description and the same would be preferred to headings providing a more general description. 23. In the tariff provided under Chapter 48, there are certain notes which are relevant for the purpose of interpreting the subject matter of various headings. Note 7 thereof, provides, that paper, paperboard, cellulose wadding and webs of cellulose fibres answering to a description in two or more of the heading nos. 48.01 to 48.11 are to be classified under one of such headings which occurs last in the numerical order in the Schedule. Note 11 thereof also provides that except for the goods of Heading No. 48.14 or 48.21, paper, paperboard, cellulose wadding and articles thereof, printed with motifs, characters or pictorial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t form with one side exceeding 36 cm would be covered under sub heading No. 4816.00. 27. Having decided the aforesaid classification in the aforesaid manner, so far, intermediary product is concerned the Commissioner also considered the scope of marketability of the intermediary product in question. Relying on the statements made by the Director of the respondent-company themselves and other relevant documents on record the Commissioner came to a finding that the carbonless paper even in printed form could be sold or purchased although the number of the customers is restricted. He also found on appreciation of the documents on record that carbonless paper invariably emerges during the course of manufacture of computer stationery and such carbonless paper emerging at the intermediary stage is known to the market, has a distinct and very well-identified market and is capable of being marketed. 28. It has been indicated from the findings of the Commissioner that the respondent company not only manufactures the end product but it also manufactures the intermediary products which are sold by them even in the roll form in the market. Invoices indicating sale by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought and sold in the open market. The Commissioner has referred to such evidence on record and even the invoices of the respondents themselves clearly indicate that they have sold intermediary products of the nature in question in the open market in roll forms. 35. In the present case, there is enough evidence available on record to show that not only the intermediary products in the present case are capable of being bought and sold in the market but they are in fact sold and purchased in the open market. Even the respondents have admitted that they have themselves purchased such intermediary products from the market although the products available in the market were of inferior quality. But the fact remains that there are enough people like the respondents willing to purchase such material from the market. 36. During the course of arguments reference was made to a number of decisions of this Court on the issue relating to marketability of a product. 37. We have a recent decision of this Court in the case of Medley Pharmaceuticals Ltd. vs. The Commissioner of Central Excise and Customs, Daman, reported in (2011) 2 SCC 601. This Court in the said decision h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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