Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 1047 - SUPREME COURT

2015 (10) TMI 1047 - SUPREME COURT - 2015 (324) E.L.T. 625 (SC) - Manufacturing activity or not - process of printing of GI paper - classifiable under Chapter heading 4811.90 or not - Held that:- A cursory look into the same may suggest, as held by the Tribunal, that GI paper is meant for wrapping and the use thereof did not undergo any change even after printing as the end use was still the same, namely, wrapping/packaging. However, a little deeper scrutiny into the facts would bring out a sign .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The printing, therefore, is not merely a value addition but has now been transformed from general wrapping paper to special wrapping paper. In that sense, end use has positively been changed as a result of printing process undertaken by the assessee.

Process of particular kind of printing has resulted into a product, i.e., paper with distinct character and use of its own which it did not bear earlier. Thus, the 'test of no commercial user without further process' would be applied a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oner : Mr. B. Krishna Prasad For the Respondent : M/s. S. Narain & Co. JUDGMENT A. K. Sikri, J. The dispute between the parties arose on two issues, viz.: (i) Whether the goods in question, i.e., printed GI paper are classifiable under Chapter heading 4811.90, as claimed by the Revenue or they were to be classified under Chapter heading 4901.90 as the product of printing industry, as per the stand taken by the respondent/assessee? (ii) Whether printing on duty paid GI paper would amount to m .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d that the process of printing of GI paper does not amount to manufacture. Aggrieved by such a conclusion on the second issue, the Revenue is in appeal before us. Therefore, this is the only issue that needs to be determined in the instant appeal which has arisen under the following circumstances: The respondent/assessee herein purchased GI paper from the market which is already duty paid base paper. On this paper, the process of printing is carried out by the assessee according to the design an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ting process amounts to manufacture or not? 4) Various show cause notices were issued and orders were passed by the adjudicating authority thereupon holding that the aforesaid process would be treated as manufacture and, thus, the respondent/assessee was liable to pay excise duty thereon. 5) The Tribunal while upsetting the aforesaid decision of the Commissioner has arrived at a conclusion that printing is only incidental and primary use of GI printing paper roll is for wrapping which is not cha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

feature/aspect which was missed by the Tribunal was that after printing the said GI paper rolls, it was used for specific purpose which was not possible with the plain paper. In support, some decisions of this Court were cited. 7) Learned counsel for respondent, on the other hand, argued that the approach of the Tribunal was perfectly justified which was in consonance with the principle laid down by this Court in J.G. Glass Industries (supra). According to him, the Tribunal had rightly held tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r a particular process amounts to manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944 (hereinafter referred to as the 'Act'), it is not necessary to refer to various case laws on the subject. Our purpose would be served by referring to a recent decision, which was rendered by this very Bench, in the case of Servo-Med Industries Pvt. Ltd. v. Commissioner of Central Excise, Mumbai 2015 (319) ELT 578 (SC). Our reason for saying so is that in this decision many ear .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ture takes place on the application of one or more processes and each process may lead to a change in the goods but every change does not amount to manufacture. To bring the process within the definition of 'manufacture' under Section 2(f) of the Act, it is essential that there must be a transformation by which something new and different comes into being, i.e., there must now emerge an article which has a distinctive name, character or use. (ii) The judgment also explains the circumstan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the product in its primary and essential character remains the same even after the process in-question and the product is sold in the market with its earlier character. Following passage from Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers 1980 (6) E.L.T. 343 (SC), was quoted which drew a line between cases in which essential character had changed and those in which no such change had taken place. 19. Interestingly, a line was drawn between cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. v. The State of Bombay and Ors. (where raw tobacco was manufactured into bidi patti), A. Hajee Abdul Shukoor and Co. v. The State of Madras (raw hides and skins constituted a different commodity from dressed hides and skins with different physical properties), The State of Madras v. Swasthik Tobacco Factory (raw tobacco manufactured into chewing tobacco) and Ganesh Trading Co. Karnal v. State of Haryana and Anr., (paddy dehusked into rice). On the other side, cases where this Court has held th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me commercial commodity, pigs bristles). This Court also explained the principle that where there was no commercial user without further process then the said process would amount to manufacture labelling it as 'test of no commercial user without further process'. (iv) Another circumstance was taken note of and discussed which involves integrated process, culling out 'the test of integrated process without which manufacture would be impossible or commercially inexpedient'. It was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t. We reproduce these categories hereunder: 27. The case law discussed above falls into four neat categories. (1) Where the goods remain exactly the same even after a particular process, there is obviously no manufacture involved. Processes which remove foreign matter from goods complete in themselves and/or processes which clean goods that are complete in themselves fall within this category. (2) Where the goods remain essentially the same after the particular process, again there can be no man .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce. (4) Where the goods are transformed into goods which are different and/or new after a particular process, such goods being marketable as such. It is in this category that manufacture of goods can be said to take place. 10) On the facts of the present case, it is to be determined as to whether the case would fall under category (2) or category (4). We have already taken note of printing process. A cursory look into the same may suggest, as held by the Tribunal, that GI paper is meant for wrap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of product, after the printing of logo and name of the specific product of Parle thereupon, the end use was now confined to only that particular and specific product of the said particular company/customer. The printing, therefore, is not merely a value addition but has now been transformed from general wrapping paper to special wrapping paper. In that sense, end use has positively been changed as a result of printing process undertaken by the assessee. We are, therefore, of the opinion that th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version