Supreme Court rules printed cartons not exempt from excise duty

ROLLA TAINERS LTD. Versus UNION OF INDIA

ROLLA TAINERS LTD. Versus UNION OF INDIA - 1994 (72) E.L.T. 793 (SC), [1994] 95 STC 556 (SC), 1994 (1) Suppl. SCR 663, 1994 (3) Suppl. SCC 293, 1994 (4) ... Issues:
1. Interpretation of Exemption Notification No. 55/75 regarding duty of excise on printed cartons.
2. Classification of printed cartons as products of the Printing Industry or Packaging Industry.
3. Legal validity of the claim for exemption under the Notification.

Analysis:
1. The appeal before the Supreme Court revolved around whether printed cartons manufactured by the appellant were exempt from excise duty under Exemption Notification No. 55/75. The appellant claimed that printed cartons fell under the category of "products of the Printing Industry" as specified in the Notification, while the Union of India contended that they were products of the Packaging Industry and not eligible for the exemption.

2. The appellant argued that printed cartons were recognized in the trade as products of the Printing Industry due to the printing being the dominant activity in their manufacture. They emphasized the role of printed cartons in advertising and enhancing the sale value of goods. However, the Division Bench of the High Court rejected this argument, stating that a carton, whether plain or printed, remains a carton in common parlance and use. The court highlighted that the end-use of a carton is packing products for sale, and printing does not change its essential nature as a packaging material.

3. The Supreme Court concurred with the Division Bench's reasoning and dismissed the appeal. The court emphasized that the exemption under the Notification applied to the "product" of the Printing Industry, which in this case was the carton itself. The court clarified that the mere presence of printing on a carton does not transform it into a product of the Printing Industry. The process of manufacturing printed cartons involves various steps beyond printing, such as cutting and shaping the carton, making it a product of the Packaging Industry. Therefore, the court upheld the decision that printed cartons were not entitled to the exemption under the Notification.

In conclusion, the Supreme Court upheld the judgment of the Division Bench of the High Court, ruling that printed cartons were products of the Packaging Industry and not eligible for exemption from excise duty under Exemption Notification No. 55/75.