1995 (5) TMI 178 - AT - Central Excise

Tribunal Upholds Duty Liability on Printed PVC Leather Cloth

The Tribunal upheld duty liability on the process of printing and embossing on impregnated, coated, or laminated fabrics, specifically PVC Leather Cloth. ... Manufacture - Fabrics Issues:1. Duty liability on the process of printing on impregnated, coated, or laminated fabrics.2. Interpretation of the term 'manufacture' under the Central Excises & Salt Act, 1944.3. Applicability of duty on products undergoing additional processes after initial duty discharge.Analysis:Issue 1: Duty liability on the process of printing on impregnated, coated, or laminated fabricsThe dispute in this case revolves around whether the process of printing on impregnated, coated, or laminated fabrics, specifically PVC Leather Cloth, should attract duty liability. The appellants argue that printing does not transform the cloth into a different commercial commodity, thus no additional duty should be levied. On the other hand, the Respondent contends that printing is an ancillary process to the completion of the manufactured product and should be dutiable. The Tribunal observed that the printed/embossed product enhances the value and marketability of the fabric, making it a distinct commercial commodity. Therefore, the duty liability on the process of printing was upheld.Issue 2: Interpretation of the term 'manufacture' under the Central Excises & Salt Act, 1944The appellants relied on specific sub-clauses of Section 2(f) of the Central Excises & Salt Act, 1944, which define the term 'manufacture' for certain tariff items. They argued that the processes listed in these sub-clauses apply only to specific tariff items and not to the items in question. However, the Tribunal emphasized that the definition of 'manufacture' includes any process incidental or ancillary to the completion of a manufactured product. The Tribunal held that the processes of printing and embossing were integral to the manufacturing process, as they enhanced the value and marketability of the final product.Issue 3: Applicability of duty on products undergoing additional processes after initial duty dischargeThe appellants contended that since the PVC Leather Cloth had already discharged duty liability under specific tariff items, it should not be subjected to duty again for the process of printing. However, the Tribunal referenced a Supreme Court judgment that rejected a similar argument in a different case. The Tribunal reiterated that the duty paid on the initial product does not exempt it from further duty liability if additional processes enhance its value and marketability. Therefore, the Tribunal dismissed the appellants' argument on this aspect, upholding the duty liability on the printed/embossed PVC Leather Cloth.In conclusion, the Tribunal rejected the appeal and upheld the order imposing duty liability on the process of printing and embossing on impregnated, coated, or laminated fabrics, emphasizing that these processes are integral to the completion of the manufactured product and enhance its marketability.