Printed vinyl advertising sheets classifiable under Chapter 49 when printing gives them commercial identity and no new product emerges.

Printed vinyl adhesive sheets used for advertising were treated as products of the printing industry and classifiable under Chapter 49, because their commercial identity was derived from the printing and the process did not create a new product. Chapter Note 2 of Section VII was applied to distinguish vinyl goods under Chapter 39 from printed articles whose character depends on printing. The printing activity was therefore not regarded as manufacture. The classification under Chapter 49 was upheld and the challenge to Chapter 39 classification failed in favour of the assessee.

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Issues: Whether vinyl adhesive sheets printed for advertising purposes were classifiable under Chapter 39 or Chapter 49 of the Central Excise Tariff, and whether the printing activity amounted to manufacture.

Analysis: Chapter Note 2 of Section VII excludes goods of headings 39.18 and 39.19 from Chapter 49, but where the raw material used is vinyl classified under Chapter 39.21, the note applies and printed articles whose character is derived from the printing fall under Chapter 49. The final product in the present case was an electrostatic print on vinyl used for advertising, and no new product emerged from the printing process. On that basis, the classification adopted by the Commissioner was held to be correct, and the printing activity was not treated as manufacture.

Conclusion: The goods were held classifiable under Chapter 49, the printing process was not manufacture, and the Revenue's challenge to the classification under Chapter 39 failed, in favour of the assessee.

Ratio Decidendi: Where printed vinyl sheets derive their commercial identity from the printing process and the process does not bring into existence a new product, the goods are classifiable as products of the printing industry under Chapter 49 rather than under Chapter 39.

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