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2015 (6) TMI 374 - CESTAT MUMBAI

2015 (6) TMI 374 - CESTAT MUMBAI - 2015 (328) E.L.T. 296 (Tri. - Mumbai) - Manufacture - Marketability of product - Printed material - printing various forms such as hospital form, leave application form, reservations form application form for passes, application form for privileged tickets and similar various forms for different purposes - Held that:- Revenue has not discharged the burden of proof that the product in question is marketable or otherwise and from the nature of the product coupled .....

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for consideration hence the same is not marketable goods. In view of our above discussion, we are of the considered view that product in question are not dutiable on both the counts of classification as well as marketability. We therefore set aside the impugned orders .

Revenue has not discharged the burden of proof that the product in question is marketable or otherwise and from the nature of the product coupled with the fact that printed material printed in the appellants' printing .....

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tion as well as marketability. We therefore set aside the impugned orders - Decided in favour of assessee. - Appeal No. E/86854/14, E/666/12, E/1693/10, E/1222, E/86807/13 - Final Order Nos. A/1140-1144/2015/EB - Dated:- 6-5-2015 - P K Jain, Member (T) And Ramesh Nair, Member (J),JJ. For the Appellant : Shri R V Desai, Sr Adv. And Shri R B Pardeshi, Adv. For the Respondent : Shri Hitesh Shah, Commissioner (AR) ORDER Per: Ramesh Nair: These five appeals are directed against order passed by the Co .....

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ection 11A(1) of Central Excise Act, 1944 Penalty of ₹ 1,79,09,975/- under Section 25 of the Central Excise Rules, 2002. 2. E/666/12-MUM 45 to 47/,-I/2011 dated 24/11/2012 (1) F.No. V-Adj (48) CSCN/MI/15-62/10 dated 13/8/2010 (2) F.No. V-Adj (48) CSCN/MI/15-81/10-11 dated 33/3/2011 (3) F.No. V-Adj(48) CSCN/MI/15-06/11 dated 23/11/2011 Duty demand of ₹ 3,32,61,463/- under Section 11A(1) of Central Excise Act, 1944 Penalty of ₹ 3,32,61,463/- under Section 11AC of the Central Exci .....

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013 F.NO. V-Adj(48) CSCN/M-I/15-17/2011 dated 28/5/2011 Duty demand of ₹ 1,16,97,025/- F. No. V-Adj (48) CSCN/M-I/15-18/12 dated 7/12/2012 Duty demand of ₹ 1,35,16,967/- Penalty of ₹ 5,000/- under Rule 25 of the Central Excise Rules, 2002. 5. E/86807/13-MUM 1 & 2 /SK/M-I/2013 dated 10/1/2013 F.No. V-Adj(48) CSCN/M-I/15-17/2011 dated 28/5/2011 Duty demand of ₹ 1,16,97,025/- F.NO. V-Adj(48) CSCN/M-1/15-18/12 dated 7/12/2012 Duty demand of ₹ 1,35,16,967/- Penalty o .....

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us show cause notices alleging that Central Railway printing press engaged in manufacture of excisable goods viz. Registers, accounts books, various forms, order books, receipt books, letter pad, memorandum pads and similar articles binding folders, file cover, mainly business and other articles of stationary papers and paper board etc. which are classified under 4820.10 of Central Excise Tariff Act, 1984 product of this chapter attracts duty. Various show cause notices were issued wherein excis .....

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ds as non marketable goods. In the adjudication, the demand raised in show cause notices were confirmed holding that products in question are classifiable under chapter 4820 and not under 4901 on the ground that product are registers, account books, various forms, order books, receipt books, letter pad, memorandum pads and similar articles binding folders, file cover, mainly business and other articles of stationary papers and paper board which are covered under 482010. On the issue of marketabi .....

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dication order are different from the actual goods manufactured and consumed captively by the Central Railway printing press. He submits complete folder of all the forms leaflet such as reservation form, application form for railway pass, hospital form leave application form and various other forms which are used for working the railway's day to day function. He submits that in show cause notice and adjudication order the tariff entry description 4820 was reproduced verbatim and accordingly .....

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forms are solely useful for railways therefore these are not general form which can be used by any person. Therefore these goods are strictly used for captive consumption for Central Railway only, hence neither marketed nor capable of being marketed. As regards the observation of the Ld. Commissioner that it is commercial know product, he submits that once these product are printed after printing only it becomes goods and after printing it is no use for any other person except by Central Railway .....

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which "goods includes any article material or substance which is capable being bought and sold for consideration and such goods shall be deemed to be marketed." It is his submission, in the present case, being printed material with name and details of Central railway for their own purpose is not capable of being bought and sold and of course not for any consideration therefore the said goods shall be deemed to be not marketable. In the present case Revenue has not discharged this burde .....

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o. Ltd. [2004 (165) ELT 386 (SC)] (d) F.G. P. Ltd. Vs. Union of India [2004 (168) ELT 289 (SC)] (e) Bhor Industries Ltd. Vs. Collector of Central Excise [1989 (40) ELT 280 (SC)] (f) A.P. State Electricity Board Vs. Collector of Central Excise, Hyderabad [1994 (70) ELT 3 (SC)] (g) Moti Laminates Pvt. Ltd. Vs. Collector of Central Excise, Ahmedabad [1995 (76) ELT 241 (S.C.)] (h) South Bihar Sugar Mills Ltd. & Anr. Vs. Union of India [1978 ELT (J 336)] (i) Union of India & Ors. Vs. Delhi Cl .....

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en all these printed products are printed with the name of Central Railway and printed information contained therein are meant for railways function it is very obvious that these material cannot be used by any other person, therefore it is not capable of being sold or purchased, on this fact also demand is not sustainable. 3. On the other hand Shri. Hitesh Shah, Ld. Commissioner reiterates the findings of the impugned order. He submits that product in question is printed paper and same are corre .....

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d [2011 (267) ELT 516 (Tri.-Ahmd) (b) Headway Lothographic Co. Vs. Commissioner of C.Ex. Kolkata-I [2003 (156) ELT 658 (Tri-Kokata) (c) Escorts Ltd. Vs. Commissioner of Central Excise, new Delhi-IV [2004 (172) ELT 223 (Tri-Del.) (d) Bharat Sanchar Nigam Ltd. Vs. Commissioner of C.Ex. Kolkata-III [2013 (292) ELT 353 (Tri.-Kokata)] 4. We have carefully considered the submissions made by both the sides and perused the record. 5. We find that in the show cause notices as well as in the impugned orde .....

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m in their printing press are mostly of various printed forms and not registers, books and pads therefore looking to the nature of the product being manufactured by the appellant it is found that same are not classifiable under chapter 48, all the forms are printed with very detailed information and only some blank column are printed for filling up by manuscript or typescript therefore in our considered view the product of appellant is correctly classifiable under chapter 49. We have gone throug .....

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s already noticed in para 7 of this order, HSN Explanatory Notes under Chapter 49 specifically recognizes this and clarifies that certain printed articles may be intended for completion at the time of use and still would remain in the heading 49.11 provided "they are essentially printed matter". The note goes on to clarify that printed forms (e.g. magazine subscription forms), blank multi-coupon travel tickets, circular letters, identity documents and cards etc. requiring only the inse .....

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get printed only at the time of sale of tickets. That does not affect the character and identity of the paper rolls as blank lottery tickets. Therefore, the finding of the Commissioner that these rolls are not products of printing industry is not sustainable. 11. We also find that an almost identical issue, of the classification of the lottery ticket, had come up before a Co-ordinate Bench of this Tribunal in the case of M/s Sai Security Printers Ltd. v. C.C.E., Faridabad - Appeal No. E/1576/200 .....

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imilarly, HSN explanatory notes to Heading 4901 clearly shows that "certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms, travel tickets, circular letters, identity documents and cards printed with messages, notices, etc. requiring only the insertion of particulars, e.g. dates and names are classified in this heading. The said notes further say that .....

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ited supra) also clearly held that lottery tickets, bus tickets, cheque books, etc. printed on thermal paper rolls and cut to size are classifiable under Heading 4901.90 as products of the printing industry. In the case of Metagraphs Pvt. Ltd., the Hon'ble Apex Court held that if printing brings into existence a product, the resultant product would be a "product of printing industry". In the case before us, it is not in dispute that the printing on the thermal sheets/rolls of paper .....

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and bus ticket. It is the printing done on the thermal paper which has imparted these characteristics and therefore, it has to be held that printing is not merely incidental to the use of the products. Applying the ratio of the decisions cited supra, it becomes evident that the impugned goods prior to enactment of Finance Bill, 2012 merit classification as "products of the printing industry". Further, it is seen that in the Finance Bill, 2012 a specific note 14 (supra) was inserted in .....

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ly, we dismiss the appeal filed by the Revenue as devoid of merits. METAGRAPHS PVT. LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY 1996 (88) E.L.T. 630 (S.C.) 10. The label announces to the customer that the product is or is not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The printing of the label is not incidental to its use but primary in the sense that it communicates to the customer about the product and this serves a definite purpose .....

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nderstood this label as the product of printing industry, there is no difficulty in holding that the labels in question are the products of the printing industry. It is true that all products on which some printing is done, are not the products of printing industry. It depends upon the nature of products and other circumstances. Therefore, the issue has to be decided with reference to facts of each case. A general test is neither advisable nor practicable. We are, therefore, of the opinion that .....

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.)] 29. In view of this, we are of the opinion that there was inadequate assistance to the Bench in case of Surya Offset and hence though the decision in regards of similar products, is per incurium as it has not considered the binding decisions of co-ordinate Bench. We have followed the ratio of various decisions as cited hereinabove while coming to the conclusion in this case. We also find that the judgment of Hon'ble Supreme Court in the case of Metagraphs Pvt. Ltd. (supra), a ratio has b .....

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in the sense that it communicates to the customer about the product and this serves a definite purpose. This Court in Rollatainers case held that "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 carton into existence". Let us apply this above formula to the facts of this case. The 'product' in this case is the aluminium printed label. The p .....

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e to facts of each case. A general test is neither advisable nor practicable. We are, therefore, of the opinion that the Tribunal was not right in concluding that the printed aluminium labels in question are not 'products of printing industry'." 30. It can be seen that the product wherein printed aluminium labels, which indicates the primary use of said product was held as a labels and it was held as product of printing Industry. Applying the said ratio, we find that the products in .....

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under Chapter Heading 49.11 and not under Chapter Heading 48.20 as held by both the lower authorities. 32. Since we have disposed the appeals on merit, we are not recording any finding on the issue of limitation as issue argued by both sides. 33. In sum, the impugned order is set aside and appeals are allowed by holding that the classification of disputed products is under Chapter Heading 49.11. From above judgments it is crystal clear that product in question being in the form of various printe .....

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y. Excisebility of the product comes into play only when paper is printed. When bought out paper are printed and comes into existence an excisable product then test of marketability has to be under gone. After printing of the plain paper with the details containing therein all these forms leaflet, folders etc. can be used by Central railway alone and it can neither be used nor shall be useful for any other person other than Central Railway. This undisputed facts is more than sufficient reason to .....

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ise to prove that this very product are marketable. Therefore admittedly the Revenue has not discharged the burden lies on them as regard the test of marketability of the product. The judgments in this regard relied upon by the Ld. Sr. Counsel squarely applicable to the present case that if the burden of proof of marketability does not discharged by the Revenue by producing the evidence then claim of appellant that the goods in question is not marketable must be accepted and no contrary view can .....

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stability. Something more would have to be shown to establish that DECA AND CMBE were known in the market as commercial products COLLECTOR OF CENTRAL EXCISE, PATNA Vs. TATA IRON & STEEL CO. LTD. [2004 (165) E.L.T. 386 (S.C.)] 21. This Court, in conclusion, held that the onus to show that particular goods on which excise duty is sought to be levied have gone through the process of manufacture in India is on the Revenue and that the Revenue have done nothing to discharge this onus. 22. In our .....

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sing as refuse during galvanisation process are not excisable goods. The Tribunal, in our opinion, has rightly relied upon the decision of this Court in Indian Aluminium Co. Ltd. (supra) and in view of the above decision of the Tribunal following this Courts opinion in Indian Aluminium Company Limited (supra), we disagree with the appellant's that zinc dross, flux skimming and zinc scallings are goods and hence excisable. F.G.P. LTD. Versus UNION OF INDIA [2004 (168) E.L.T. 289 (S.C.)] 14. I .....

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. Based on the evidence of affidavits filed by the appellant it is sought to be argued that the deponents may not be interested in purchasing 'glass lumps' but it does not disprove marketability of the goods. We are unable to accept this contention. The burden of showing that the goods are marketable is on the Revenue. In the absence of any proof brought on record by the Revenue that 'glass lumps' are marketable or capable of being marketed, it is not possible to hold that the te .....

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xcise duty the article manufactured must be capable of sale to a consumer. The expression "goods manufactured or produced" must refer to goods which are capable of being sold to the consumer. This Court observed as follows :- "It does not seem to us that in order to attract excise duty the article manufactured must be capable of sale to a consumer. Entry 84 of List I of Schedule VII to the Constitution specifically speaks of "duties of excise on tobacco and other goods manufa .....

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ct, 1944 and observed that "to become 'goods' an article must be something which can ordinarily come to the market to be brought and sold", a definition which was reiterated by this Court in South Bihar Sugar Mills Ltd. v. Union of India." 7. It is necessary in this connection to reiterate the basic fundamental principles of excise. The Judicial Committee of the Privy Council in Governor General in Council v. Province of Madras - 1978 (2) E.L.T. (J 280) = (1945 F.C.R. 179) .....

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ture of goods and the duty is not directly on the goods but on the manufacture thereof. Therefore, the essential ingredient is that there should be manufacture of goods. The goods being articles which are known to those who are dealing in the market having their identity as such. Section 3 of the Act enjoins that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or 'manufactured' in India. &q .....

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e it would not be dutiable under excise law if the said article is not "goods" known to the market. Marketability, therefore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985. 11. In view of the Appellate Collector's order dated 14-1-1974 it was the duty of the revenue to adduce evidence or proof that the articles in question were goods. No evidence or proof was produced. The Tribunal went wrong in not applying the proper test .....

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tion and are covered in the Entry then they are liable to pay excise duty. But even in respect of specified goods it could be established that it was not marketable or capable of being marketed, therefore, no duty was leviable on it. The finding on this aspect has been extracted earlier. The Assistant Collector (Excise) found that unless some retarder or stabiliser was added the unstable solution was not marketable. Even assuming that such solution could last for 15 days as found by the Tribunal .....

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marketed. Since the test of marketability or capable of being marketable applies even to those goods which are mentioned in the tariff item the intermediate resin produced by the appellants which are mentioned as resols under Tariff Item No. 15A were not exigible to duty. The finding of the Tribunal that once the product manufactured by the appellants answered the chemical description of the product under Tariff Item 15A it was assessable to duty whether it was marketable or not was thus not wel .....

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