Manufacture and tariff classification of printed paper wallets: mere printing did not create a new product, so excise duty failed.

Printing instructions and particulars on buyer-supplied paper, followed by cutting, folding and creasing into paper wallets, did not amount to manufacture because mere printing did not bring about a new product. The paper wallets were treated as printed paper articles classifiable under Chapter Sub-Heading 4901.90, not Chapter Sub-Heading 4823.90, in line with Chapter Note 11 of Chapter 48. On that basis, the central excise duty demand was unsustainable.

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Issues: Whether printing on paper wallets supplied with raw materials by the buyer amounted to manufacture and attracted central excise duty, and whether the goods were classifiable under Chapter Sub-Heading 4823.90 or Chapter Sub-Heading 4901.90.

Analysis: The process involved printing instructions and particulars on paper supplied by the buyer, followed by cutting, folding, creasing and similar operations to produce paper wallets used as packing material. The prior adjudication had treated the activity as manufacture and demanded duty under the proviso to Section 11A of the Central Excise Act, 1944, but the appellate authority found that mere printing of information did not bring about any change in the product so as to amount to manufacture. It also relied on Chapter Note 11 of Chapter 48 of the Central Excise Tariff Act, 1985, under which printed paper articles not merely incidental to the primary use fall in Chapter 49, and held that the goods were correctly classifiable as printed paper wallets under Chapter Sub-Heading 4901.90.

Conclusion: The activity did not amount to manufacture and the printed paper wallets were classifiable under Chapter Sub-Heading 4901.90, not under Chapter Sub-Heading 4823.90; the duty demand was unsustainable.

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