TMI Blog2008 (9) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... C.A. No. 978 of 2005 have been filed by the Revenue. 3. The issues in these appeals are regarding the classification of the "writing inks" being manufactured and captively consumed by the assessee and consequent demand of duty thereon. The inks with their constituents are:- No. Name of the inks Ingredients 1. 99-Marker Inks (i) Ketonic Solvent (ii) Solvent Dyes (iii) Binders 2. 100-Camel Fount Drawing Ink (i) Carbon Black (Pigment) (ii) Shellac Binder (iii) Water Preservatives 3. 07-Camel Waterproof Drawing Ink (i) Carbon Black (Pigment) (ii) Shellac Binder (iii) Water Preservatives 4. 09-Camel Spl. Drawing Ink Black (i) Carbon Black (Pigment) (ii) Shellac Binder (iii) Water Preservatives 5. 98- Camel Rapidugraph Ink Black (i) Carbon Black (Pigment) (ii) Shellac Binder (iii) Water Preservatives 6. 75- Designers' Indian Ink Black (i) Carbon Black (Pigment) (ii) Shellac Binder (iii) Water Preservatives 7. 75A- Designers' Indian Ink Black (i) Carbon Black (Pigment) (ii) Shellac Binder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pens manufactured by the assessee are assessed at nil rate, the submission is that the writing inks which are used in these pens are not exigible to the levy of duty. This submission is made on the basis of the letter dated 28 th May, 1997 written by the then Finance Minister of India. The relevant extracts of the letter is as follows:- "I have had the matter examined. The general rate applicable to products falling under Chapter 32 of the Central Excise Tariff is 18% which is also the rate applicable to artists' and students' colours. However, pens and parts of pens have remained exempted from duty for a long time. A demand was made that writing inks which fall in the same category of goods, may also be exempted from duty. It was also argued that a factory producing pens is required to pay excise duty on writing inks which is anomalous. On examining these requests, we had decided to exempt writing inks also from excise duty." 9. The aforesaid contentions of the assessee which were taken in appeal were accepted by the Commissioner (Appeals) vide his Order dated 28 th of March, 1999. After referring to the numerous dictionaries to ascertain the meaning of various terms, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under CSH 3215.90. 12. Aggrieved by the said Order dated 29 th September, 2000 of the Tribunal, assessee filed Civil Appeal No. 387/2001 in this Court whereby this Court remanded the case to the Tribunal for a fresh decision. 13. Tribunal vide its impugned order dated 30 th April, 2002, decided that eight out of nine inks manufactured by the assessee will be considered as writing inks and rate of duty will be Nil. While for one ink being "marker ink", it held against the assessee. It was held that "marker inks" have to be classified under residual entry CSH 3215.90 and is liable to pay duty at the rate of 16%. The Tribunal relied on HSN to reach the said conclusion. 14. Aggrieved against the Order of the Tribunal, three sets of appeals have been filed, one by the assessee and two by the Revenue. 15. The Counsel for the parties have been heard at length. 16. The Indian Central Excise Tariff creates two categories of "writing ink" and residuary entry of "other". The HSN on the other hand creates categories for "printing ink", "other" and then residuary entry of "other". For convenience, the relevant extract of HSN is reproduced herein below:- "EXTRACT OF CHAPTER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are based on Silver Nitrate. The marker ink manufactured by assessee admittedly "does not" contain Silver Nitrate. 19. Further, HSN only described "ordinary" writing or drawing inks in Category B. Even inks for ball point pens are classified under residuary entry "other". The Indian Tariff classification puts "all" writing inks together. The fact that all writing inks are considered same and together can also be seen from the aforesaid letter of the Finance Minister and the trade notices referred to. 20. As per scheme of HSN, "printing inks" are classifiable under specific Chapter Sub Headings 3215.11 and 3215.19 of the HSN and are described under Note "A". All the rest of the inks are covered in residuary heading 3215.90 and are described under Note "B" "ordinary writing or drawing inks" and Note "C" "other inks". It may be noted that scheme of Indian Excise Tariff entry is completely opposite and "printing inks" will fall under residuary entry of CSH 3215.90 and "writing or drawing inks" fall under specific entry 3215.10. 21. The basic contention of the respondent- Department for all practical purposes is that pens are not writing instruments, because if the pens are wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stated that pens and parts of pens have remained exempted from duty for a long time. 26. In our considered view, the Tribunal erred in relying upon the HSN for the purpose of marker inks in classifying them under Chapter Sub-Heading 3215.90 of the said Tariff. The Tribunal failed to appreciate that the entries under the HSN and the entries under the said Tariff are completely different. As mentioned above, it is settled law that when the entries in the HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN for the purpose of classification of goods under the said Tariff. One of the factors on which the Tribunal based its conclusion is the entries in the HSN. The said conclusion in the Order of the Tribunal is, therefore, vitiated and, accordingly, set aside. We agree with the findings recorded by the Commissioner (Appeals). 27. For the reasons stated above, we dismiss the appeals filed by the Revenue and accept the appeals filed by the assessee. The Order of the Tribunal is confirmed insofar as inks other than marker inks are concerned. Whereas the Order of the Tribunal insofar as it has come to the conclusion that marker inks are exigible to pay duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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