Printing & cutting paper for Biri wrappers deemed manufacturing under Central Excise law

The court held that the activity of printing on plain paper and cutting them to size amounts to manufacturing Biri wrappers, attracting Central Excise duty. The appellant's argument that they were merely printers was rejected, with the Commissioner ruling that the conversion of printed wrappers from paper constituted manufacture. The Tribunal concurred, emphasizing that the printed wrappers served a specific purpose and constituted a new product. Despite a dissenting opinion, the majority concluded that the activity resulted in the creation of commercially identifiable Biri wrappers, thus constituting manufacture under Central Excise law.

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Issues Involved:
1. Whether the activity of printing on plain paper and cutting them to size amounts to manufacture.
2. Classification of the printed Biri wrappers under the Central Excise Tariff.

Summary:

1. Whether the activity of printing on plain paper and cutting them to size amounts to manufacture:

The appellant contended that they are a printer, not a manufacturer, and their activity of printing on paper supplied by Biri manufacturers does not amount to manufacturing excisable goods. They argued that the printed papers are labels falling under Chapter Sub-heading 4821.00, which attracts a "NIL" rate of duty. The Commissioner, however, held that the printed Biri wrappers cut to size are liable to Central Excise duty under Chapter sub-heading 4823.19, as the conversion of printed wrappers from paper constitutes manufacture. The Commissioner cited various case laws to support this view, emphasizing that the printed wrappers are used for protection and identification of Biris, thus constituting a new product.

2. Classification of the printed Biri wrappers under the Central Excise Tariff:

The appellant argued that their activity should be classified under Chapter 49 as a product of the printing industry, relying on the Supreme Court's decision in CCE, Madras v. Paper Products Ltd., which held that printing does not bring into existence any excisable goods. The Tribunal, however, noted that the printed wrappers are used specifically for wrapping Biris and contain mandatory information required by law, thus constituting a new product. The Tribunal referred to the Supreme Court's decision in Union of India v. J.G. Glass Industries Ltd., which held that a process amounts to manufacture if it brings into existence a new and different commodity. The Tribunal concluded that the appellant's activity of printing and cutting paper to size results in the manufacture of Biri wrappers, attracting Central Excise duty.

Separate Judgments:

Member (T): Held that the appellant's activity does not amount to manufacture, relying on the Supreme Court's decision in Paper Products Ltd. and emphasizing that the appellant only carried out printing, which does not bring into existence any new product.

Member (J): Differed, holding that the activity amounts to manufacture as the printed and cut paper serves a specific purpose of wrapping Biris, thus constituting a new product. Cited various case laws to support this view.

Third Member (T): Agreed with Member (J), concluding that the activity results in a new commercially identifiable product known as Biri wrappers, thus amounting to manufacture under Central Excise law.

Final Order:

In view of the majority order, it was held that printing of plain paper and cutting them to size amounts to manufacture resulting in the manufacture of Biri wrappers. The issue of classification was not decided and the appeal was listed for considering other issues raised.

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