TMI Blog2024 (3) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... he Order-in-Original it is not explained by department as to which is the provision which renders the activity of printing undertaken by the appellant excisable so as to be manufacture . The Department has construed the activity of printing to be manufacture, merely because the goods fall under tariff heading 482110. The classification of the goods or its excisability cannot be a ground for holding that the activity amounts to manufacture . The department has to establish that the activity undertaken by the appellant as per the chapter notes of Section 48 to be that of manufacture. In the present case, there is nothing brought out on record to hold that the activity of printing is manufacture by chapter notes. In the case of M/S MATCHWELL VERSUS C.C.E. -AHMEDABAD-I [ 2019 (6) TMI 1019 - CESTAT AHMEDABAD] , the Tribunal had occasion to consider similar issue. It was held that merely because the goods are classifiable under a particular tariff heading, it cannot be said that the activity undertaken by the appellant in the nature of printing of images on paper would amount to manufacture . In the case of HBD PACKAGING (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [ 2013 (5) TM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared and argued for the appellants. It is submitted that the department has not alleged in the show cause notice or stated in the order passed by the adjudicating authority as to how the activity of printing undertaken by the appellant would amount to manufacture . The Ld. Counsel adverted to Chapter 48 and 49 of CETA 1985 and submitted that the Chapter notes therein do not say that the activity of printing on paper / paperboard amounts to manufacture . To substantiate this argument, Ld. Counsel drew support from Chapter notes to Chapter 52 to 54 to argue that in the said chapter notes, at note 4, it is clearly stated that printing on fabric would amount to manufacture . Since chapter 42 does not say that printing activity on paper or paperboard amounts to manufacture , the activity of the appellant cannot be construed to be manufacture. Merely because the products are classifiable under Tariff Heading 48191010 the department cannot hold that the activity of printing done by the appellant amounts to manufacture . It is explained by the Ld. counsel that the customers who are co-noticees supplied the raw materials such as paper board of different varieties to the appellant on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority as well as the Commissioner (Appeals) is legal and proper. The co-noticees have supplied raw material to the appellant and therefore the penalty imposed on them is legal and proper. Ld. A.R prayed that the appeals may be dismissed. 7. Heard both sides. 8. The issue to be decided is whether the activity of printing undertaken by the appellant amounts to manufacture or not. The case of the department is that the appellant is a job worker who received raw material from the customers and do the activity of printing which amounts to manufacture of finished products. However, in the show cause notice or in the Order-in-Original it is not explained by department as to which is the provision which renders the activity of printing undertaken by the appellant excisable so as to be manufacture . 9. The Department has construed the activity of printing to be manufacture, merely because the goods fall under tariff heading 482110. The classification of the goods or its excisability cannot be a ground for holding that the activity amounts to manufacture . The department has to establish that the activity undertaken by the appellant as per the chapter notes of Section 48 to be that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, and is required to be changed into various shapes/sizes, character and end use of first product continue to be same, there is no transformation. In the present case also applying the ratio of Hon ble Supreme Court judgment, the paper remained as paper, the printing process carried out only for use in the decorative laminate sheets/MDF Boards etc. However, after process of printing, the first product i.e. paper continue to be same as paper only, therefore, no manufacturing has taken place in the present case. The Hon ble Supreme Court in the case of Paper Product Ltd. (supra), held that in the case of printing of name by job worker on film which is then utilized for purpose of packing does not amount to manufacture. As per this judgment, the printing was enabling the product to use as packing material for the purpose of packing. Similarly, in the present case also, the plain paper was printed with design for use in decorative laminate sheets/MDF Boards. 8 . We also find that even if there is change in tariff heading, but there is significant change in the process and the said process does not amount to manufacture, merely change of tariff heading does not make product dutiable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th distinct name, character or usage has emerged. However on this point, the Commissioner in para 5.17 of the impugned order-in-original has given the following finding :- 5.17 The primary use of the goods manufactured by the party was to convert it into carton/such packing material and not more than that and the act of printing/coating was merely in relation to such use and not more than that. In my view, even without being subjected to printing and coating, the plain coated paper could be converted into carton/such packing material and be put to the use in the same manner, as a printed carton is used. In such circumstances, it can be said that the act of printing was merely incidental to the primary use and hence the resultant product obtained after the act of printing remained covered by Chapter 48 . Thus even per the Commissioner s findings, even after the process of printing and plastic/varnish coating of paperboard, the basic character and use of the product has not changed and paperboard, whether plain or printed and coated is used for the same purpose, i.e. making of carton for packaging. 8 . Hon ble Supreme Court, in the case of Union of India v. J.G. Glass Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered arguments from both sides as well as the case laws cited before us. As we have observed earlier, it is well-settled that mere change of tariff classification from one heading to another, in this case, from 48.05 to 48.11, would not make the product excisable unless the process meets the test of manufacture. We find that there are decisions of the Tribunal cited by the learned DR, which have held similar goods such as wrappers for soap, wrappers for biri and printed PVC sheets to be manufactured goods on account of printing. However, the decisions cited by the learned Advocate mainly the decision of the Hon ble Supreme Court in the case of J.G. Glass (cited supra), and decision in the case of Printorium (cited supra), which has been uphold by the Hon'ble Supreme Court and decision in the case of ITC Ltd. reported in 2004 (166) E.L.T. 426 (Tri) upheld by the Hon ble Supreme Court hold that printing of glass bottles, aluminium foils, paperboard respectively do not result in manufacture of new commodity. We have also kept in view arguments from both sides in the context of classification of the impugned product that the printing is incidental and primary use of GI printe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Paxwell Printers v. CCE, Bangalore (supra) and in the case of CCE v. Reliance Printers (supra), we hold that the classification of the printed paper board in any event if it is held to be goods would fall under Chapter Heading 4901.90. The judgment cited by learned SDR in the case of Headway Lithographic Co. v. CCE, Kolkata-I (supra) pertains to wrapper for biri which is a different product and the classification therein is different. 10 . We also uphold the claim of appellant that in the event of printed coated paper board being considered as goods, they are entitled for the claim of Modvat. The Modvat claim is available in the facts and circumstances of the case. Further the plea that the demands are barred by time as all the facts had been furnished and classification list had been approved is required to be upheld in the matter. However, we have already given a finding that the process of printing on the coated paper board does not amount to manufacture, and if so, the alternative claim that it is required to be classified under 4901.90 is upheld. 14. After appreciating the evidence placed before us and following the decisions cited supra, we are of the view that the activ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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