1996 (2) TMI 315 - AT - Central Excise

Classification of Aluminium Printing Plates under Central Excise Act upheld by Tribunal

The Tribunal held that both Micro finished grained aluminium printing plates (MGA plates) and Pre-sensitised aluminium printing plates (PA plates) were ... Classification of printing plates - Photographic plates versus printing plates - Preparation for printing as classification criterion - Process of manufacture transforming base material - HSN Explanatory Notes interpretationClassification of printing plates - Process of manufacture transforming base material - Preparation for printing as classification criterion - Micro finished grained aluminium printing plates (MGA) are classifiable under Heading No. 84.42 of the Tariff and not under Heading No. 76.06. - HELD THAT: - The Tribunal examined the nature of the processes applied to aluminium coil/sheet - chemical cleaning, graining by grinding media, anodising and related steps - and accepted that these operations produce a grained surface which renders the plate suitable exclusively for printing. The court applied the test of manufacture that a new article emerges with its own name, character and use and held that the graining and allied treatments convert the base aluminium into a micro finished plate used in the printing industry. Technical aspects of offset lithography were considered and the Tribunal found that the preparatory processes undertaken by the appellant rendered the plates suitable for printing (offset lithography) without requiring engraving. On that basis the Tribunal concluded that the products fall within the scope of Heading No. 84.42 as 'plates... prepared for printing purposes' rather than being merely aluminium sheets classifiable under Heading No. 76.06. [Paras 6, 11, 12, 14]MGA plates held classifiable under Heading No. 84.42.Classification of printing plates - Photographic plates versus printing plates - HSN Explanatory Notes interpretation - Preparation for printing as classification criterion - Pre-sensitised aluminium printing plates (PA) are classifiable under Heading No. 84.42 of the Tariff and not under Heading No. 37.01. - HELD THAT: - The Tribunal considered the nature of pre-sensitised plates which the appellants described as plates subjected to graining, desmutting, anodising, silicating and, in some cases, coating with light-sensitive chemicals. The court noted that Heading No. 37.01 covers photographic plates and film that are sensitized and unexposed and that the HSN Explanatory Notes exclude from Heading No. 84.42 those plates coated with a sensitized photographic emulsion or consisting of photosensitive artificial plastic material. In the present case the plates were not coated with a sensitized photographic emulsion and, even where light-sensitive coating was applied, such coating did not convert the articles into photographic plates in the sense of Heading No. 37.01. Having regard to the preparatory processes and the intended use in offset lithography, the Tribunal held that these plates are 'prepared for printing purposes' within Heading No. 84.42 and that the involvement of photographic principles does not preclude classification as printing plates. [Paras 10, 11, 12, 14]PA plates held classifiable under Heading No. 84.42.Final Conclusion: Both the micro finished grained aluminium printing plates and the pre-sensitised aluminium printing plates were held to be properly classifiable under Heading No. 84.42 of the Tariff; both appeals are allowed accordingly. Issues Involved:1. Classification of Micro finished grained aluminium printing plates (MGA plates).2. Classification of Pre-sensitised aluminium printing plates (PA plates).3. Demand of duty and penalty due to the reclassification of the plates.Issue-wise Detailed Analysis:1. Classification of Micro finished grained aluminium printing plates (MGA plates):The appellants, M/s. Niraj Graphics (P) Ltd., argued that MGA plates should be classified under Heading No. 84.42 of the Central Excise Tariff Act, 1985, which pertains to machinery and equipment for preparing or making printing plates. The Revenue, however, classified MGA plates under sub-heading No. 7606.10, which covers aluminium plates and sheets. The appellants contended that after undergoing processes such as graining and anodizing, the aluminium plates were transformed into new articles specifically used for printing purposes, thus losing their identity as mere aluminium plates. They cited the Tribunal's decision in the case of Kasturi & Sons Ltd. v. Collector of Customs and the Supreme Court's decision in Govt. of India v. MRF Factory to support their claim.The Tribunal considered the processes described by the appellants, including chemical treatment, graining, and anodizing, which converted the basic aluminium plates into micro finished plates exclusively used for printing. The Tribunal noted that the plates had undergone a change in character and use, meeting the criteria of manufacture under Sec. 2(f) of the Central Excise and Salt Act, 1944. Consequently, the Tribunal held that MGA plates were correctly classifiable under Heading No. 84.42, as they were prepared for printing purposes.2. Classification of Pre-sensitised aluminium printing plates (PA plates):The appellants also claimed that PA plates should be classified under Heading No. 84.42. The Revenue classified PA plates under sub-heading No. 3701.90, which covers photographic plates and film. The appellants argued that PA plates, after undergoing processes such as graining, anodizing, and coating with light-sensitive chemicals, were used for printing purposes. They emphasized that the plates were ready for exposure and use in printing, regardless of whether the light-sensitive coating was applied at the manufacturer's end or the printer's end.The Tribunal examined the relevant aspects of printing and photographic technology, noting that PA plates were not coated with sensitized photographic emulsion but with chemicals sensitive to light. The Tribunal referred to the Explanatory Notes to the Harmonised System of Nomenclature (HSN) and the appellants' own case before the Collector of Central Excise, Aurangabad, which classified PA plates under Heading No. 84.42. The Tribunal concluded that PA plates were properly classifiable under Heading No. 84.42, as they were prepared for printing purposes and not merely photographic plates.3. Demand of duty and penalty due to the reclassification of the plates:The second appeal concerned the demand of Rs. 23,03,094.99 and a penalty of Rs. 5,000/- arising from the reclassification of the plates by the Assistant Collector of Central Excise, Nasik, and confirmed by the Collector of Central Excise (Appeals), Pune. Given the Tribunal's decision to classify both MGA and PA plates under Heading No. 84.42, the demand and penalty based on the earlier classification were rendered moot. The Tribunal's decision effectively nullified the basis for the duty demand and penalty, providing relief to the appellants.Conclusion:In summary, the Tribunal held that both MGA plates and PA plates were correctly classifiable under Heading No. 84.42 of the Central Excise Tariff Act, 1985, as they were prepared for printing purposes. This decision nullified the demand of Rs. 23,03,094.99 and the penalty of Rs. 5,000/- imposed on the appellants due to the reclassification. Both appeals were disposed of in favor of the appellants.