2015 (10) TMI 443 - SC - Central Excise

Classification of printed thermal paper rolls under Central Excise Tariff Act upheld by court

The case involved the classification of 'printed thermal paper rolls' under the Central Excise Tariff Act, 1985. The dispute centered on whether the ... Classification of goods - product of the printing industry - tariff classification - manufacturing process as determinative factor - end-use not relevant for classification - Chapter Heading 49.01 - printed books, newspapers, pictures and other products of the printing industry - Chapter Heading 48.11 - paper, paperboard ... printed, in rolls or sheetsClassification of goods - product of the printing industry - manufacturing process as determinative factor - end-use not relevant for classification - Printed thermal paper rolls manufactured and cleared by the assessee are classifiable under Chapter Heading 49.01 as products of the printing industry and not under Head 4811.90. - HELD THAT: - The Court accepted the factual description in the show cause notice of the manufacturing process undertaken by the assessee: imported one side coated thermal jumbo rolls were loaded on a printing machine and particulars (including logos) were printed on the uncoated or, in some cases, on the coated side; thereafter the rolls were cut/slitted and packed. The Court held that the activity undertaken by the respondent was essentially printing and that classification must follow the nature of the operation performed by the manufacturer. The end use of the printed rolls by purchasers is immaterial for tariff classification. Mere use of imported thermal paper as raw material or subsequent cutting and slitting does not convert the product into an item falling under Head 4811.90 where the decisive character is imparted by the printing operation. The Court applied its earlier rulings to hold that printing carried out by the assessee makes the product a product of the printing industry falling under Chapter Heading 49.01.The appeal is dismissed; the printed thermal paper rolls are classifiable under Chapter Heading 49.01.Classification of goods - product of the printing industry - manufacturing process as determinative factor - Printed ordinary paper rolls (non thermal) produced by similar printing operations are likewise classifiable under Chapter Heading 49.01. - HELD THAT: - In Civil Appeal Nos. 808-809 of 2013 the manufacturing process was the same save that the paper was ordinary (non thermal) and printing was performed on it. Applying the reasoning in the earlier part of the order, the Court held that where the essential operation performed by the assessee is printing, the goods are products of the printing industry and fall under Chapter Heading 49.01. The appeals were disposed of by applying the same principle.The appeals are dismissed and the goods are held classifiable under Chapter Heading 49.01.Final Conclusion: All appeals are dismissed; printed paper rolls (thermal and ordinary) manufactured by the respondent are products of the printing industry and are classifiable under Chapter Heading 49.01, with the manufacturing process being determinative and end use irrelevant for classification. Issues involved: Classification of 'printed thermal paper rolls' under Chapter Heading 49.01 or 48.11 of the Central Excise Tariff Act, 1985.Analysis:In the case at hand, the primary issue revolves around the classification of the product 'printed thermal paper rolls' manufactured and cleared by the respondent. The respondent asserts that the correct classification is under Chapter Heading 49.01, which pertains to printed books and products of the printing industry. On the other hand, the Department argues that the proper classification should be under Head 4811.90, which covers paper and paperboard coated, impregnated, or printed. The critical contention is whether the process undertaken by the assessee primarily involves printing work, as claimed by the respondent, or if other factors should determine the classification.Upon examining the manufacturing process described by the Company's Director, it is evident that the main raw material used is one side coated thermal paper, which is then subjected to printing as per the buyers' requirements. The process involves printing on the uncoated side of the thermal paper, with the coated side remaining blank or having the buyer's monogram printed as background. The rolls are subsequently cut, slit into smaller rolls, and packed for sale. The key aspect highlighted is that the assessee is primarily engaged in printing activities and supplies the printed rolls to customers based on their orders. The end use of the product by the purchaser is deemed irrelevant for classification purposes, emphasizing that the focus should be on the manufacturing process undertaken by the respondent.The description of the work carried out by the assessee underscores the printing nature of the activities, leading to the rightful classification under Chapter Heading 49.01. The fact that thermal paper rolls are utilized as raw material or undergo size modifications does not alter the classification criteria. The judgment cites precedents such as 'Headway Lithographic Company v. CCE, Kolkata' and 'Holostick India Ltd. v. CCE, Noida' to support the classification based on the nature of the manufacturing process. Consequently, the appeal is dismissed, affirming the classification under Chapter Heading 49.01.In a related matter encompassing appeals concerning the manufacturing process involving printing on ordinary paper, the decision in Civil Appeal No. 285 of 2007 is upheld, resulting in the dismissal of these appeals as well. This reaffirms the importance of the printing process in determining the classification of products under the Central Excise Tariff Act, 1985.