TMI Blog2011 (8) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court was not considering such a situation while determining whether the printed cartons would fall under the category of products of printing industry. In the said case, the issue was whether the printed cartons should be treated as products of printing industry or products of packaging industry. Hon'ble Supreme Court after noting that the printing industry by itself could not bring cartons into existence, held that such printed cartons could not be considered as products of printing industry. The ratio of the said decision cannot be applied to the facts of the present case which involve determination of classification of the printed products which could fall either under chapter 48 or 49 depending upon the nature and scope of printing on the products. - E/1038/1999, 1561/1999, 1252 and 1253/1998, 1703/1999, 337/1999, 44 to 48/1998, 54 to 57/1998,825/2000, 824/2000, 787/1999, 2940 to 2945/1998, 997/1999 - Final Order No. 659 to 683/2011 2011 - Dated:- 11-10-2011 - MR. P.G. CHACKO, MR. M. VEERAIYAN, JJ Appearance Shri S. Raghu, Advocate, for the appellants Shri Ganesh Haavanur, SDR, for the respondents Per M. Veeraiyan 1.1 Appeals No. E/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as if it was a statute definition. It will require qualification in new circumstances.' Megarry, J. in (1971) 1 WLR 1062 observed : 'One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament.' And, in Herrington v. British Railways Board [1972 (2) WLR 537] Lord Morris said : There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case. 5. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. The following words of Lord Denning in the matter of applying precedents have become locus classicus : Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter Heading 481130. The appellants undertook printing on the rolls so supplied and cut them to required sizes by process of cutting and slitting. The end products were directly supplied to ITC on the directions of M/s. Laminated Packings(P) Ltd.. The appellants received job charges. The printed material included details like the brand name like 'Bristol Filter', logo, words 'A BRAND OWNED BY ITC LTD', words 'MADE IN INDIA', words 'WHOLESALE PACKAGE NOT FOR CONSUMER USE CONTAINS 10 CONSUMER PACKAGES OF 20 CIGARETTES EACH' and words 'MFD. BY THE HYDERABAD DECCAN CIGARETTE FACTORY PVT. LTD., 1-7/140 MUSHEERABAD, HYDERABAD-500048'. 5.2. A show-cause notice dated 01.08.1996 was issued proposing demand of ₹ 33,61,893/- by alleging that the products cleared by the appellants fall under Chapter sub-heading 4823.19. The original authority confirmed the demand and denied the MODVAT credit. The original authority did not accept the claim of the appellants that the final products cleared by them should be treated as product of printing industry and should be classified under Chapter sub-heading 4901.90. Commissioner (Appeals) confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pursuance of various show-cause notices. In the case in Appeal No. E/2940 to 2945/1998, an amount of ₹ 11,60,107/- has been confirmed on both the Units I and II in pursuance of different show-cause notices for different periods. In the case in appeal No.E/997/1999, an amount of ₹ 1,05,754/- stands confirmed for the period 01.04.96 to 18.07.96 in pursuance of show-cause notice dated 28.10.96. Rajhans Enterprises: 8.1. The products involved are printed labels mainly used for packing/wrapping of agarbathis. The department confirmed the classification under SH 4823.19 whereas the party claimed it under SH 4821.00 or alternatively, under SH 4901.90 as products of printing industry. 8.2. In the case in Appeal Nos. E/54 to 57/98, an amount of ₹ 6,93,283/- stands confirmed for the period 11/95 to 12/96 in pursuance of various show-cause notices. 8.3. In the case in Appeal No. E/825/2000, an amount of duty of ₹ 1,97,478/- and a penalty of ₹ 10,000/- for the period 3/94 to 2/95 was confirmed by the original authority against the respondents in pursuance of show-cause notice dated 26.7.96. However, the Commissioner (Appeals) has accepted the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jay Industries also manufacture printed agarpathi labels on PVC films.) He submits that the printing of details like brand of agarbathis, name of the manufacturer, MRP in various colours and in different languages do not amount to manufacture as the starting material and the end product are substantially the same and used for the purpose of wrapping and packing of agarbathis. He also alternatively submits that if the said activities are held to be amounting to manufacture, and the printed agarbathi labels are held to be excisable, then they should be treated as products of printing industry chargeable to nil rate of duty. 11.4. The next category of product is the printed agarbathi labels on PVC films. These products are manufactured by Vijai Industries, Rajhans Enterprises, Regency Printers and Reliance Industries. He submits that the activities undertaken do not amount to manufacture and if the same is held to be amounting to manufacture, then the resultant products should be classified either under CH 392690 or under CH 490190 as products of printing industry. 11.5. In support of his contention that the processes of printing undertaken on Polyethylene coated paper, paper an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessees, no manufacture is involved in printing on the paper. In case it is treated as amounting to manufacture then, according to the assessees, the resultant products should fall under 4901.90 and held to be products of printing industry and exempted. On the other hand, according to the Department, the printing activities undertaken amount to manufacture and the resultant products fall under 4823.19 and that the same cannot be treated as products of printing industry and consequently exemption is not available. 14.2 According to the assessees, printing on PVC films does not amount to manufacture and if the same is held to be manufacture, then, according to the assessees, the resultant products should be treated as falling under 3923.90. The Department has held that printing on PVC films amounted to manufacture and that the resultant products should be treated as falling under 3920.19. 15. Several decisions have been relied upon on behalf of the assessees to submit that printing on duty paid materials does not amount to manufacture. It may be appropriate to analyse the said decision before considering the facts of the present cases. They are as follows:- a. Deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Printed paper rolls continued to be wrapping as in the case of unprinted GI paper rolls. 16.1. In the case of Sri Kumar Agencies and Faxwell Printers, polythene coated paper in jumbo rolls falling under Chapter 4811.30 were given by M/s. Laminated Packings Pvt. Ltd. The assessees have undertaken printing on the rolls supplied by the said party and thereafter, they were cut to sizes and delivered to ITC. The matter printed on the paper consisted of trade name and marks for identification and to promote the product as well as to impart requisite information. The printing involved is of a sophisticated nature using advanced printing Machines and it served the dual purpose of marketing and promoting the product as well as to impart the requisite information to meet the statutory requirements. Further, the products arising after the printing were clearly known by a different name i.e. gay wrappers. The paper without printing is, no doubt, usable for wrapping purposes. The use of such unprinted paper is of a general nature. After printing also the wrappers are used for packing. The assessees have claimed that the paper before printing and after printing served only the purpose of wra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4823.13 - Braille paper Nil 4823.14 - Blotting paper 20% 4823.19 - Other 20% 4823.90 - Other 25% Chapter Note 2 of Chapter 49 2. For the purpose of Chapter 49, 'printed' also means reproduced by means of a duplicating machine, produced under the control of a computer, embossed, photographed, photo-copied, thermocopied or typewritten. 49.01 Printed books, newspapers, pictures and Other products of the printing industry; Manuscripts, typescripts and plans 4901.10 - Transfers (decalcomanias) 20% 4901.20 - Maps and hydrographic or similar charts Of all kinds including atlases, wall maps, Topographical plans and globes, printed Nil 491.90 -- Other Nil 17.3 From a careful reading of the above, it is clear that if the printing is considered essential for the purpose then the printed paper cannot be retained under chapter 48. In the facts of the present case, as claimed by the assessees, the printing is of a sophisticated nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... characters of pictorial representations, which are not merely incidental to the primary use of the goods, fall in Chapter 49. Therefore, they fall outside the chapter of 39. However, as these activities which gave the essential characteristics and new end use are sophisticated printing activities undertaken in the printing industry, the resultant products deserve to be classified as products of printing industry under sub heading 4901.90. 20.1. In the present cases, the printing activities undertaken are sophisticated in nature. Considering the contents of the printed material and the nature of printing, the printing activities do not qualify to be called as incidental to the main purpose of wrapping / packing, as the printed products in the form of gay wrappers meant for packing cigaretss, printed agarbathi labels meant for agarbathi packings served significant purposes in addition to the purpose for which the printed paper / paper board, polyethylene coated paper / pvc films were meant to be used. Decisions cited on behalf of the Department in support of the claim that the printed products are not products of printing industry cannot be applied to the facts of these c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would fall under chapter 48 and when the printing is considered essential, it would fall under chapter 49.The Hon'ble Supreme Court was not considering such a situation while determining whether the printed cartons would fall under the category of products of printing industry. In the said case, the issue was whether the printed cartons should be treated as products of printing industry or products of packaging industry. Hon'ble Supreme Court after noting that the printing industry by itself could not bring cartons into existence, held that such printed cartons could not be considered as products of printing industry. The ratio of the said decision cannot be applied to the facts of the present case which involve determination of classification of the printed products which could fall either under chapter 48 or 49 depending upon the nature and scope of printing on the products. Hon'ble Supreme Court, in the ITC Ltd. cited supra considered appeal against the CEGAT's Final Order No.251 to 256/95-C dt. 31/8/1995 (copy placed on record by ld. SDR). On perusal of the said order of the Tribunal, it is noticed that the same dealt with classification of items like printed ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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