2014 (2) TMI 589 - AT - Central Excise

Tribunal upholds classification of printed rolls as products of the printing industry

COMMR. OF C. EX., BELAPUR Versus ALPHA CARBONLESS PAPER MFG. CO. PVT. LTD.

The Tribunal upheld the classification of printed ATM rolls, lottery ticket rolls, and bus ticket rolls under Chapter 49 as 'products of the printing ... Classification of goods - Manufacture of printed ATM Rolls, printed lottery ticket rolls and printed bus ticket rolls - Classification under CETH 49019900 or 48234000 - Adjudicating authority dropped proceedings against assessee - Held that:- From the HSN explanatory notes, it is seen that heading 4823 excludes products like lottery tickets, scratch cards, raffle tickets and tombolo tickets. Similarly, HSN explanatory notes to heading 4901 clearly shows that 'certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms, travel tickets, circular letters, identity documents and cards printed with messages, notices, etc. requiring only the insertion of particulars, eg. Dates and names are classified in this heading. The said notes further say that tickets for admission to places of entertainment, tickets for travel by public or private transport or other similar tickets are also included in Chapter 49. Therefore, printing is not merely incidental to the use of the product as such printing imparts a substantial character and quality to the product. It is true that while actually using, certain particulars are required to be entered in these rolls by the ATM or the lottery machine or in the bus ticket vending machine. Nevertheless the product is specifically meant to be used as ATM receipts, lottery tickets and bus ticket. It is the printing done on the thermal paper which has imparted these characteristics and therefore, it has to be held that printing is not merely incidental to the use of the products - impugned goods prior to enactment of Finance Bills 2012 merit classification as 'products of the printing industry' - The said amendment introduced by way of Note 14 to Chapter 48, was only prospective and was not given any retrospective effect. This itself indicates that prior to the insertion of Note 14 to Chapter 48, the impugned products merit classification under Chapter 49 - Decided against Revenue. Issues Involved:1. Classification of printed ATM rolls, printed lottery ticket rolls, and printed bus ticket rolls.2. Applicability of Cenvat Credit Rules, 2004.3. Interpretation of Chapter Notes and Tariff Entries under the Central Excise Tariff Act.4. Retrospective application of Finance Act, 2012 amendments.Detailed Analysis:1. Classification of Printed ATM Rolls, Lottery Ticket Rolls, and Bus Ticket Rolls:The primary issue in the appeal is whether the printed ATM rolls, lottery ticket rolls, and bus ticket rolls should be classified under CETH 49019900 as 'products of the printing industry' attracting nil rate of duty or under CETH 48234000 as 'rolls, sheets and dials, printed for self-recording apparatus' attracting excise duty. The respondent classified these products under Chapter 49, while the Revenue argued for classification under Chapter 48.The Revenue contended that the primary use of these printed rolls is for recording transactions made by customers using various apparatus or machines, thus meriting classification under Chapter 48 in terms of Note 12 to Chapter 48. They argued that the printed rolls do not communicate anything until the transaction is recorded by the apparatus, making the primary use for recording transactions.The respondent relied on previous Tribunal decisions, including Gopsons Papers Ltd. and Sai Security Printers Ltd., which classified similar products under Chapter 49. The respondent also cited the Supreme Court decision in Metagraphs Pvt. Ltd., which held that if printing brings into existence a product, it is a 'product of the printing industry.'2. Applicability of Cenvat Credit Rules, 2004:The respondent availed Cenvat Credit on inputs used in manufacturing both dutiable and exempted products but did not maintain separate accounts as per Rule 6(3)(i) of Cenvat Credit Rules, 2004. The Revenue's appeal did not primarily focus on this issue but on the classification of the products.3. Interpretation of Chapter Notes and Tariff Entries:The Tribunal analyzed the competing tariff entries and HSN explanatory notes. It noted that heading 4823 excludes products like lottery tickets, scratch cards, and raffle tickets, which are classified under Chapter 49. The notes to heading 4901 state that printed articles intended for completion at the time of use remain in this heading if they are essentially printed matter.The Tribunal concluded that the impugned goods, namely ATM printed rolls, lottery ticket printed rolls, and bus ticket printed rolls, merit classification under Chapter 49 as 'products of the printing industry.' It emphasized that printing imparts substantial character and quality to the products, making it not merely incidental to their use.4. Retrospective Application of Finance Act, 2012 Amendments:The respondent argued that the Finance Act, 2012, amended the Central Excise Tariff to include certain printed products under Chapter 48 by inserting Note 14, which was prospective and not retrospective. The Tribunal agreed, stating that prior to the enactment of Finance Bill 2012, the impugned products merited classification under Chapter 49.Conclusion:The Tribunal upheld the classification of the printed ATM rolls, lottery ticket rolls, and bus ticket rolls under Chapter 49 as 'products of the printing industry.' It dismissed the Revenue's appeal, finding no infirmity in the impugned order. The Tribunal emphasized the significance of printing in imparting character to the products and the prospective nature of the Finance Act, 2012 amendments. The appeal filed by the Revenue was dismissed as devoid of merits.