TMI Blog1998 (3) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... printed cigarette shells and slides as also hinged lid blanks (H.L. Blanks) and clearing the same to manufacturers of cigarettes for packing purpose, filed two classification lists dated 9-3-1982 and 22-3-1982 seeking classification under erstwhile T.I. 68 and claiming exemption under Notification 104/82. Respondent was informed that the goods will attract duty under erstwhile T.I. 17(4). In the course of his submission before the Assistant Collector, the respondent pleaded alternatively that in case erstwhile T.I. 17(4) was applicable, the benefit of exemption Notification 66/82 would be available. The Assistant Collector passed an order overruling these contentions and classifying the goods under erstwhile T.I. 17(4) and denying the benefit of exemption. In appeal, the Collector (Appeals) held, following the decision of Government of India in the case of Golden Tobacco Co. - 1979 (4) E.L.T. (J 561A) that the goods were classifiable not under T.I. 17(4) or 17(3) but were classifiable under T.I. 68 and without deciding whether the benefit of Notification 104/82 would be available. Department, being aggrieved, has filed the present appeal. 4.The parties reiterated their respectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings :- 48.18 OTHER ARTICLES OF PAPER PULP, PAPER, PAPERBOARD - cartons, boxes, containers and cases (including flattened or folded boxes and flattened or folded cartons), whether in assembled or unassembled condition : 4818.12 - Printed cartons, boxes, containers and cases, made wholly out of paper or paperboard of heading No. or sub-heading Nos. as the case may be. 4818.13 - Other printed cartons, boxes and cases. 4818.19 - Other. 4818.90 - Other. 8.In the case which led to the decision in I.T.C. Ltd. - 1994 (71) E.L.T. 547 (T) the assessee who produced printed outer shells, printed outer shells with slides and printed H.L. cutouts and inner frames filed classification list under T.I. 17(4) and claimed the benefit of Notification No. 66/82. The lower authorities agreed with the classification but denied benefit of the notification on the ground that the articles are printed boxes and hence taken out of the scope of the Notification by the proviso to the Notification. The departmental representative conceded the non-dutiability of outer shell before the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was common practice for cigarette manufacturers to acquire packets and parts thereof from parties engaged in the manufacture of such packets and parts. Accordingly the Tribunal held that Slides are marketable and liable to duty under sub-heading 4818.90. 10.In Avadhoot Printers - 1994 (71) E.L.T. 829 (T), the appellant filed classification list for the product "Slides for cigarette packets" under sub-heading 4818.19 read with Notification No. 63/82. The lower authorities held sub-heading applicable to be 4818.90. Following the decision of the same Bench in I.T.C. Ltd. - 1994 (71) E.L.T. 478 (Tribunal) the appeal filed by the assessee was dismissed. 11.The referring three-Member Bench was of the view that the question of excisability of outer shells and H.L. Blanks, was not an issue for decision in the cases of Zupiter Printery - 1991 (34) ECR 7 (Delhi H.C.) and Asia Tobacco Company - 1992 (58) E.L.T. 418 (Madras H.C.). The Bench observed :- "The High Courts were not called upon to determine whether the two items fall for classification under any other entry in the Schedule to the erstwhile Central Excise Tariff while in this case we are called upon to decide the classificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact more like a shelter wherein other articles in itself ....... ..............This is neither an encasement nor a receptacle which can hold the thing in itself. Even if we do not give much importance to the dictionary meaning of the word "box" still the correct guide in such a case is the context and the trade meaning....... In commercial and in cigarette trade, the container in which cigarettes are packed is known as a packet of cigarettes and not as a box or carton. Therefore, even for the sake of argument, if it is presumed that the "outer shell" is a packet, still it cannot be called a box. That packet consists of both the components, the shell and the slide. But in the absence of the slide, by no stretch of imagination it can be called a box." [Emphasis supplied] The High Court further held that "outer shell" not being box as contemplated in T.I. 17(4), the entry was not applicable. The necessary inference would be that even if entry T.I. 17(4) applied, Notification No. 66/82 would apply. The High Court also held :- "The definition of "goods" makes it clear that to become "goods" an article must be something which can ordinarily come to the market to be sold and bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Entry 17(4) as it is not a box or(2) container or the like. (The High Court cannot also be regarded as having decided that outer shell and slide together constitute a box) The dismissal by the Supreme Court of Appeal No. 5436A/92 filed by the Department only means that the Court did not find any error in the above ratio. 14.In Asia Tobacco Company Ltd. - 1992 (58) E.L.T. 418 (Madras H.C.), the writ petitioner engaged in the manufacture of cigarettes was also preparing outer shell and inner slide and using the same in packing cigarettes. The Department informed the petitioner that the articles fell under T.I. 17(4) and Notification No. 66/82 was not applicable as the outer shells are printed boxes. It appears, before the introduction of Item 17(4) in the Tariff in 1982, the outer shells and inner slides were regarded as classifiable under T.I. 68 and entitled to exemption under Notification No. 118/75 relating to goods intended to be used in the factory. The High Court held :- ".........it is seen that the packet is completed only after cigarettes have been put in it. Cigarettes are put first in the bundling paper and then placed in the slide. The slide along with the cig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seen supported by the decisions of the Supreme Court in G. Claridge Company - 1991 (52) E.L.T. 341 (S.C.) and Punjab Anand Lamps Industries - 1989 (43) E.L.T. 816 (S.C.). 16.In G. Claridge Company Ltd. - 1991 (52) E.L.T. 341 (S.C.), the Supreme Court examined the scope of the word "Container" occurring in T.I. 17(4), considered the dictionary meaning of the word and observed :- "In Item 17 of the old Tariff, the word "Containers" is preceded by the words "boxes, cartons, bags and other packing" and in Heading 48.18 of the new Tariff, the word "Containers" is preceded by the words `cartons, boxes' and is followed by the words "and cases". It is a well-accepted canon of statutory construction that when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. It is based on the principle that words take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general........ Considering the context in which it is used in the relevant tariff item, we are of the opinion that the said expression has to be construed to mean `packing containers' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the dictionary meaning of 'box' as a receptacle usually having a lid and held that "sleeves" produced by the assessee could not be called "box" or "carton" and will be covered by the Exemption Notification, even assuming that the product is a container. Sleeves do not have any lid and contain by themselves nothing because they are opened from both sides. They had no independent market as such and were utilised for captive consumption. The Supreme Court sustained the conclusion of the Tribunal in the absence of any positive and reliable evidence that there was either a market for these sleeves and these bulb sleeves were known and marketable as corrugated boxes and cartons. It may be noted that according to the Revenue, sleeve rolls consisting of 17.5 cm wide corrugated paper on one side and plain paper on the other side mounted on a packing machine and cut to necessary length to circumscribe lamps and the joint was automatically covered by gum tapes. The sleeves are conveyed automatically to a conveyor on which the lamps manually inserted and the ends are folded to prevent the lamp from falling out. For the Tubes, sleeves already cut to proper length are supplied by others. Tube ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed condition, as it is convenient for purpose of transport. It can thereafter be assembled or made to assume its proper shape. This is not factually true of outer shell and slide or H.L. Blank since as already pointed, when made to assume the form of a packet, it is not a mere packet, but a packet of cigarettes on which proper duty is paid. We are supported in this view by the decisions of the Supreme Court and High Courts of Delhi and Madras. It is therefore clear that T.I. 17(4) is not attracted to outer shell slide or H.L. Blank. If it is to be assumed that T.I. 17(4) is attracted treating the articles as "box" benefit of Notification No. 66/82 is not available since only printed boxes and printed cartons (flattened or not) (whether in assembled or unassembled condition) are taken out of the purview of the Notification. 20.Respondent was classifying the outer shell sleeves and H.L. Blank under T.I. 68 till the present dispute arose in 1982. According to the appellant if T.I. 17(4) is held inapplicable, the articles fall under T.I. 68 and benefit of Notification No. 104/82 is not available. Besides resisting these contentions, Respondent contended before the referring Bench tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. - 1994 (72) E.L.T. 793 (S.C.), the Supreme Court held that printed carton manufactured by the appellant cannot be regarded as product of the printing industry, but is a product of the packaging industry. A carton remained a carton, in the trade and common parlance, whether it is plain carton or printed carton. This decision has been followed in the appellants' own case reported in 1997 (96) E.L.T. 9 (S.C.). In this view, we hold that the articles manufactured by the Respondent, though they attract T.I. 68, are not goods specified in the annexure to the Notification and the Respondent is not entitled to the benefit of the Notification for these articles. 22.For the reasons indicated above, we hold that - Outer shells, Sleeves and H.L. Blanks made by the Respondent(a) from printed paperboard fall under erstwhile T.I. 68, and not erstwhile T.I. 17(4) [or 17(3)]. These articles do not have the benefit of Notification No.(b) 104/82. If the articles fall under T.I. 17(4), they will attract the(c) benefit of Notification No. 66/82. The two classification lists filed by the Respondent shall be(d) treated as approved subject to the findings in clause (a) and (b). The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Pune as reported in 1991 (33) ECR 433; they held that the item in question cannot be considered as "boxes, cartons and packing containers". Thereby, overruling the revenue's contention that they are products of packaging industry. While coming to the conclusion that they are not goods, the Hon'ble High Court specifically referred to the judgments of Hon'ble Supreme Court rendered in the case of Indian Aluminium Cables Ltd. v. Union of India Others - 1985 (21) E.L.T. 3 and that of Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. - 1988 (37) E.L.T. 480 (S.C.). This was to overrule the contention that the shell is described as 'box' under the Indian Standard Guide for principle uses and styles of fibreboard containers. This contention of revenue was held to have no force because ISI guide is relevant for standardization and quality control and has nothing to do with the classification of the goods in terms of the tariff schedule. In this regard, the above noted Hon'ble Supreme Court judgments were relied. It was also held that in the cigarette trade the shell is not known as a `box' which is a relevant consideration to be taken as observed by the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a "box", if it assumes the shape after some other things are put into it i.e. the slide in this case. The outer shell to be described as a box must have a separate and independent existence from the slide, but that is not the case. For the reasons stated above, we hold that the "shells" of19. cigarette packets manufactured by the petitioner are not excisable under Entry 17(4) of the First Schedule as introduced by Finance Act, 1982. Impugned orders dated 7th April, 1982 and 30th April, 1982 are quashed and set aside". Thus, as can been seen from the reading of the ratio of the Hon'ble High Court, they have completely ruled out the item being a "box or a carton" as known in commercial and common parlance. They have also clearly held that the item is not "goods" and they have quoted the definition of "goods"; i.e. an article must be something which can ordinarily come to the market to be sold and bought. They have held that at the shell stage, it can neither be bought nor sold in the market. As can be seen from the above quoted paragraph 18, they have held that box had a definite meaning as understood in the common parlance. Therefore, it has been held that mere outer shell by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court has held that they are not articles of packaging industry, therefore, they have to be held as such in regard to this item also and the same ratio which pertains to "Printed Shells" clearly applies to "Printed HL Blanks", as they are not in the nature of 'packets, cartons, containers and articles of packaging industry'. Once, we hold that both the items are not articles of packaging industry, therefore, the judgment of Hon'ble Supreme Court rendered in the case of Rollatainers Ltd. v. Union of India as reported in 1994 (72) E.L.T. 793 would not apply and become distinguishable. Hon'ble Supreme Court had held that the Notification No. 55/75-C.E., dated 1-3-1975 did not apply the articles of packaging industry. The articles before us namely "Printed Shells" and "Printed HL Blanks" not being of packaging industry and being only Printed HL Blanks from Paperboard and being a product and article of printed industry, is eligible to the benefit of Notification. The view taken by Hon'ble Madras High Court in the case of Asia Tobacco Co. Ltd. v. Union of India as reported in 1992 (58) E.L.T. 418 is on the same lines as that of Hon'ble High Court in the case of Zupiter Printery A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
