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M/s. Lakshmi Packaging Pvt. Ltd. Versus CCE, Salem

2015 (8) TMI 100 - CESTAT CHENNAI

Classification of goods - Whether product ‘PVC films’ printed with logos is classifiable under Chapter 490190 or 3920.39 - Held that:- Hon’ble Supreme Court in the recent judgment in the case of Holostick India Ltd. Vs. Union of India [2015 (4) TMI 357 - SUPREME COURT] settled the issue of what construes the products of printing industry classifiable under Chapter 4901 of CETA, 1985, wherein it was observed that:

It is important to remember therefore, that the primary use of the produ .....

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adhesiveness is incidental to the primary use to which the goods are put, namely, that they are to be used for security purposes. Also, the HSN Explanatory Notes are relevant, which according to the judgment of this Court reported in 'Collector of Central Excise, Shillong v. Wood Craft Products Ltd.' [1995 (3) TMI 93 - SUPREME COURT OF INDIA]

Decision relates to product ‘hologram’ and the Hon’ble Supreme Court held that it is a product of printing industry classifiable under Chapter .....

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nd Shri P. K. Choudhary, JJ. For The Appellant : Shri S. Raghu, Advocate For The Respondent : Ms. Indira Sisupal, AC (AR) Per R. Periasami The present appeal is second round of litigation before this Tribunal. 2. The brief facts of the case are that the appellants are engaged in printing of PVC films. The duty paid polypropylene films are subjected to process of printing of customers logo, trademark or design etc. and ready for use as wrapper for sewing threads. The appellants classified the pri .....

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Note 2 of Section VII of Central Excise Tariff Act. 3. The adjudicating authority in his denovo order dated 12.1.2002 accepted the classification under Heading 490190 as products of printing industry and dropped further proceedings. Revenue preferred appeal against the said adjudication order and the Commissioner (Appeals) allowed the Revenue s appeal and held that the goods are classifiable under 3920 and set aside the impugned order. Hence the present appeal. 4. Heard both sides. 5. Learned co .....

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peals vide Tribunal s Final Order Nos. 659 to 683/2011 dated 9.8.2011. That Section Note 2 of Section VII clearly excludes products of printing industry from Chapter 39. He relied on the recent Hon ble Supreme Court s decision in the case of Holostick India Ltd. Vs. CCE, Noida - 2015 (318) ELT 529 (SC). He submits that the products are duty paid PVC film already classified under 3920 and what they carried out is only printing of logos etc. 6. On the other hand, learned AR for Revenue submits tha .....

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ed the submissions of both sides and perused the records. The short issue to be decided is whether product PVC films printed with logos is classifiable under Chapter 490190 or 3920.39. It is pertinent to state that due to divergent decisions of Hon ble Supreme Court and various High Courts and Tribunal decisions, the issue was placed before the Larger Bench of the Hon ble Supreme Court and the Hon ble Apex Court in the case of CCE Vs. Srikumar Agencies (supra), remanded the batch of appeals to t .....

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1994 72 ELT 793 (SC) and in the case of ITC Ltd. Vs. CCE, Madras reported in 1998(97) ELT 401 (SC) to submit that the products in question cannot be treated as products of printing industry. In the case of Rolla Trainers Ltd., the Hon ble Supreme Court was dealing with the issue as to whether the printed cartons manufactured by the assessee for organizations like Brookbond India Ltd., Lipton India Ltd. and TATA Finlay ltd., could be treated as product of printing industry in the context of appl .....

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y itself cannot bring the carton into existence. Any amount of fancy printing on a card-board would not make it a carton. In the process of manufacturing the printed cartons, the card-board has to be cut, printed, creased and given the shape of a carton by using paste or gum. Simply because there are expensive prints on the carton such a printed carton would not become the product of the Printing Industry. It shall remain the product of the Packaging Industry. In the present cases, we are dealin .....

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ining 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 .....

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racks unfolded, printed top lid flats unfolded, printed hanged lid, printed shells/hulls, and slider which are parts / components of packets meant for packing of cigarettes. The Tribunal held that they could not be treated as products of printing industry on the ground the capacity to contain is essential characteristic of a carton and not the printing work on it which is merely incidental. Tribunal heavily relied on the ratio of the decision in the case of Rolla Tainers Ltd. cited supra. The s .....

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to the facts of the present case. 22. In view of the above, while upholding the contention of the Department that the activities undertaken in the present cases would amount to manufacture, we accept the alternative submissions on behalf of the assessees that the products should be treated as products of printing industry. Therefore, on merits, we hold that the demands are not sustainable and accordingly set aside the demands of duty, interest and penalties. The above decision is squarely appli .....

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stick India Ltd. Vs. Union of India (supra) settled the issue of what construes the products of printing industry classifiable under Chapter 4901 of CETA, 1985 and allowed the Civil Appeals filed by the assessee. Relevant paragraphs of Apex Court order are reproduced as under:- 8. We have heard learned counsel for the parties. The first important thing to notice is that the original coated metallised film that has been used by the appellant has already been classified under sub-Heading 3920.36 a .....

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astics, rubber and articles thereof, printed with motifs, characters of pictorial representations, which are not merely incidental to the primary use of the goods, fall in Chapter 49." 17. It is clear therefore, that the question resolves itself into whether printing is only incidental to the primary use of the goods or is something more than something merely incidental. We have already referred to the process hereinabove and the final product which emerges is a product which is used for se .....

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he said goods - the adhesive tape. By way of contrast, in the present case, the factor of adhesiveness is incidental to the primary use to which the goods are put, namely, that they are to be used for security purposes. Also, the HSN Explanatory Notes are relevant, which according to the judgment of this Court reported in 'Collector of Central Excise, Shillong v. Wood Craft Products Ltd.' [1995 (77) E.L.T. 23 (S.C.)] = 2002-TIOL-278-SC-CX-LB in para 12 are a safe guide in case of doubt: .....

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f Central Excise Tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. The ISI Glossary of Terms has a different purpose and, therefore, the specific purpose of tariff classification for which the internationally accepted nomenclature in HSN has been adopted, for enacting the Central Excise Tariff Act, 1985, must be preferred, in case of any difference between the meaning of .....

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goods of entry 39.19 (inter alia) because they are merely incidental to the primary use of the products, would not be so included. This test again provides a useful application of what is includable and what is left out by applying the "primary" and "incidental" test outlined in Note 2 above. Obviously, a comic sticker would have as its primary use the "comic part", the adhesive or sticker part being only incidental to its primary use. Similarly, in the facts of the .....

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afraid that the second circular which has been quoted hereinabove does not set out the law correctly. It is clear that merely because a particular embossed hologram is self adhesive, therefore in all cases, it will attract entry 39 is not correct. What is to be seen, as has been pointed out above, is whether the self adhesive part of the product is of primary use or the printed matter is of primary use. It cannot be that invariably in all cases, the moment a hologram is self adhesive it will fa .....

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tory Notes of HSN below Heading 39.19 which reads as under: "It should be noted that this heading includes articles printed with motifs, character or pictorial representations which are not merely incidental to the primary use of the goods (See Note 2 to Section VII)". General Explanatory Notes of HSN below Chapter 49 clearly mentions that "Goods of Heading 39.18, 39.19, 48.14 or 48.21 are also excluded from this Chapter, even if they are printed with motifs, characters or pictori .....

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