TaxTMI 
TaxTMI 
2013 (5) TMI 33
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....ters, account books, excise books and note books, letter pads, diaries and similar articles falling under Chapter 48 and invoice books, printed sheets of paper and paperboard falling under sub-heading 4911 99 90 of the Central Excise Tariff. Some of the above items are dutiable and other items have nil rate of duty. The appellant also have a unit at Baddi, Himachal Pradesh, located in exempted area and that unit is availing duty exemption under Notification No. 49/2003-C.E., dated 10-6-2003. The goods manufactured at Baddi unit are cartons, wrappers, labels and leaflets. During April 2005 to March 2008 period, the Noida unit of the appellant-company to which this appeal pertains, received paperboard from Baddi unit under jobwork challans wh....
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....of the view that the goods were classifiable under sub-heading 4811 90 99/4811 59 00 and were chargeable to duty and the duty short paid was Rs. 23,62,623/-. 1.3 Based on the above, a show cause notice dated 25-3-2009 was issued to the appellant unit for - (a) classification of printed and coated paperboard under sub-heading 4811 59 00/4811 90 99 of the Tariff and on this basis recovery of duty amounting to Rs. 55,25,464/- from the appellant under proviso to Section 11A(1) along with interest on the duty under Section 11AB; (b) recovery of duty of Rs. 23,62,623/- in respect of clearances of printed sheets cleared at nil rate of duty during April 2008 to December 2008 period by reversing the Cenvat credit under Rule 6(3A) o....
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.... to manufacture, as this activity does not change the name, character and usage of the paperboard and hence no duty is chargeable on printed and coated paperboard cleared to Baddi unit, that in this regard, he relies upon Hon'ble Supreme Court's judgment in case of Metagraph Pvt. Ltd. v. CCE, Bombay reported in 1996 (88) E.L.T. 630 (S.C.), that printed sheets cleared to Baddi unit during April 2008 to December 2008 period, being classifiable under Heading 4911 were not chargeable to duty, that in any case, the bulk of the duty demand for April 2005 to December 2008 period, raised vide show cause notice dated 25-3-2009 is time-barred, as all the clearance having been declared in the ER-1 return, and extended period under proviso to Section 1....
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....inted paperboard for manufacture of packing cartons for their customers. According to Department, the printed and plastic/varnish coated paperboard cleared to duty was classifiable under Heading 4811, chargeable to duty and not exempt from Notification No. 214/86-C.E. as Baddi unit was not paying any duty on the final product - cartons, as the same was availing full duty exemption under Notification No. 50/2003-C.E. During the period from April 2008 to December 2008, the plain paperboards were being purchased by the appellant-unit and were being subjected/printing and varnish/plastic coating and cleared to Baddi unit at nil rate of duty by classifying the same under Heading 4911. Thus the main points of dispute which have to be decided are ....
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....us even per the Commissioner's findings, even after the process of printing and plastic/varnish coating of paperboard, the basic character and use of the product has not changed and paperboard, whether plain or printed and coated is used for the same purpose, i.e. making of carton for packaging. 8. Hon'ble Supreme Court, in the case of Union of India v. J.G. Glass Industries Ltd. reported in 1998 (97) E.L.T. 5 (S.C.) while holding that printing of plain glass bottles does not amount to manufacture, has in para 16 of the judgment observed as under - ''16. On an analysis of the aforesaid rulings, a two fold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commer....