TaxTMI 
TaxTMI 
2011 (9) TMI 921
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....pany manufactured and cleared various dutiable goods during the years 2004-2005, 2005-2006 and 2006-2007, due to which their value of clearances exceeded the limit prescribed in Notification No. 8/2003. After coming to such a conclusion, the visiting officers were of the view the benefit of Notification No. 8/2003 is not eligible to appellant company. They recorded a statement of Director of the Company as regards goods which were cleared and whose value was not considered for calculating the aggregate value for the purpose of SSI exemption. Based on these allegations, a Show Cause Notice dated 10-9-2008 was issued, proposing recovery of Central Excise duty of Rs. 33,79,777/- (Rs. Thirty Three Lakhs, Seventy Nine Thousand, Seven Hundred and Seventy Seven only) under first proviso of Section 11A of Central Excise Act, 1944, interest on the said amount under Section 11AB of Central Excise Act, 1944, penalty under Section 11AC of Central Excise Act, 1944 read with Rule 5 of Central Excise Rules, 2002, personal penalty on Shri Mukesh Shah, (second appellant of this case). Both the appellants contested the Show Cause Notice on merit as well as on limitation. The adjudicating authority d....
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....manufactured by the appellant will not fall under category of items which would have motifs, character or pictorial representation which are not merely incidental to the primary use of the goods. It is his submission that the products which are manufactured by the appellant which are listed out are types of forms like pre-printed Excise invoice, etc. and various other forms, wherein the details have to be filled up by the purchaser of the form to make it complete. He reads the HSN explanatory note annexed at Page 574 as regards products that would get covered under Chapter 48 and exclusions thereof. He would also draw our attention to the inclusions in Chapter 49.11 of HSN for the purpose of pointing out the difference between two Chapter Headings, and how their products would not get covered under Chapter 48. He also read C.B.E. & C. Circular dated 15-10-1991 for the purpose of showing clarity on the classification of the product like cheques, forms, stock certificates, bills of lading, documents of title rail tickets etc. and submits that the Board itself has clarified that these products would get classified under CH 49. He would submit that an identical issue arose and was deci....
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....e articles of the type manufactured would get covered under Chapter 48. He would also submit that exclusion given in the HSN explanatory notes to Chapter 48 are specific and cannot be said to include the items manufactured by appellant company. He would emphasize that for the product in question, the appellant has pre-printed the entire details e.g. Excise Invoice form, the name and date, details of goods, value thereof, duty liability, sales tax liability, etc., are pre-printed. It is his submission that filling up of the information in Excise invoice would not mean that only minor details are filled. It is his submission that identical issue was raised in the case of Surya Offset before this Bench and this Bench vide Final Order No. A/223/WZB/AHD/2011, dated 4-2-2011 [2011 (267) E.L.T. 516 (Tri.)] in Paras 9 & 10 has categorically held that the items which are under dispute would fall under Chapter Heading 48 and more specifically 48.20. It is his submission that this judgment was delivered recently i.e. on 4-2-2011. He would submit that the issue involved in other cases which have been cited by ld. Sr. Advocate can be distinguished on facts as the products were different in thos....
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....sp; Pre-printed Press label Forms 13. Pre-printed Purchase Order Forms 14. Pre-printed C&S Credit Note & Invoice Forms 15. Pre-printed Excise & Export Invoice Forms 16. Pre-printed Tax Invoice Forms 17. Pre-printed Retail Invoice Forms 18. Pre-printed Retail/Tax Invoice Forms 19. Pre-printed Bank Payment Voucher Forms 20. Pre-printed Form No. 402 Forms 21. Pre-printed Stock Transfer Forms 22. Pre-printed Pay Slips Forms 23. Pre-printed Restaurant Bill Forms 24. Pre-printed Letter Head Forms 25. Pre-printed Goods Inward-cum-Inspection Report Forms 26. Pre-printed Pay Roll Outer Forms 27. Pre-printed Invoice Forms on Carbonless Paper Forms 28. Pre-printed Repair Order Forms 29. Pre-printed Credit/Cash Memo Forms 30. Pre-printed Debit Memo Forms 31. Pre-printed Test Report Forms 32. Pre-printed Job Order Forms ....
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....aterial, commercial catalogues and the like : Kg. Nil 4911 10 10 Posters, printed Kg. Nil 4911 10 20 Commercial catalogues Kg. Nil 4911 10 30 Printed inlay crds Kg. Nil 4911 10 90 Other Kg. Nil Other : Kg. Nil 4911 91 00 Pictures, designs and photographs Kg. Nil 4911 99 Other: Kg. Nil 4911 99 10 Hard copy (printed) of computer software Kg. Nil 4911 99 20 Plan and drawings for architectural engineering, industrial, commercial, topographical or similar purposes reproduced with the aid of computer or any other devices Kg. Nil 4911 90 Other Kg. Nil 11. The main contention of the ld. Sr. Advocate appearing on behalf of the appellants is that by reading Chapter Note No. 12 of Chapter 48, the products in question would get classified under Chapter 49. In order to appreciate the said claim, it is necessary to produce Chapter Note No. 12 to Chapter 48. "12. Except for the goods of heading 4814 or 4821, paper, paperboard, cellulose wadding and articles thereof, printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the goods, fall in Chapter 49." 12. It is not dispu....
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....oducing the un-disputed and factual position, we now address ourselves to Chapter Note 12 which is reproduced in Paragraph 11 hereinabove. 18. On plain reading of Chapter Note, it can be seen that motifs, character or pictorial representation which are not merely incidental to the primary use of the goods, fall in Chapter 49. From the list of the products in dispute, it can be seen that pre-printed forms which carry the name and address and other details as required in particular form, are not merely incidental to the primary use of the said form, e.g. the pre-printed form of Excise Invoice is having details printed for particular assessee giving all the details. The primary use of the said form is as an Excise Invoice Form and the name of the company preparing such invoices with its house mark or pictorial representation of the company indicates that the excise form is from a specific company and is merely incidental to the primary use of the goods. The HSN General clarificatory notes which are included in Chapter 49 read as under : "With the few exceptions referred to below, this Chapter covers all printed matter of which the essential nature and use is determined by the f....
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....ed view, entire issue needs to be read in context of Chapter Note 12 of Chapter 48, which clearly defines the scope and purport of Chapter Heading 48.20. A plain reading would mean that even if a product falls under the general description of Tariff Heading 48.20, it would not get classified thereunder if the printed motifs, characters or pictorial representations are not merely incidental to the primary use of goods. The products with motifs, characters or pictorial representation may get covered under Chapter Heading 48.20, however by virtue of Chapter Note 12, if the printing is incidental to its primary use, it will fall under Chapter 49. Hence, in our considered view, if the printing that is carried out on the product, itself conveys a message e.g. details of the contractual terms, information of messages received or sent, details of the supplier/manufacturer, advertisement of his products, then in all such cases, the printing cannot be merely incidental to the primary use. 20. It can be seen that for classification of a product under Chapter Heading 49.11, HSN explanatory notes has the following notes : "This heading covers all printed matter (including photographs and....
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....els are put on slitters to obtain different width; slit paper remaining in reel form is put on the said two machines where printing is done in different colours on the first three towers; Paper then moves to fourth tower in the continuous form where, if required, the spot coating of ink is done at the respective selected spots on the printed paper; thereafter paper moves on to the punching part of the machine and then for perforation, to fan-folding portion of the machine; that in this continuous processing of the paper it is impossible to remove the paper in between." 24. After considering the rival headings under 48.16 and 49.01, the Bench in Paragraph 9 of that case has recorded the following findings : "9. ...........The Central Board of Excise and Customs itself in Circular No. 11/91-CX. 4, dated 15-10-1991, considered the correct classification of paper printed with a format of air line tickets or embarkation/disembarkation cards which have ink/carbon deposed at appropriate places on reverse side. The Central Board of Excise and Customs after referring to the Explanatory Notes of HSN, observed that the tickets, printed circulars, letters, forms etc. which ar....
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....g this product in roll form so that the same could be used by various users straightway as in online lottery. We are, therefore of the view that the product in question can be rightly classified under sub-heading 4901.90 as it can be treated as the product of the printing industry. While arriving at this conclusion, we also rely upon the ratio arrived at by the Hon'ble Supreme Court in their judgment in the case of Metagraphs Pvt. Ltd. and this Tribunal's decision in the case of VST Industries Ltd. (supra). Further it has also been brought to our notice that in the Explanatory Notes relating to Harmonized Commodity Description and Coding System article such as lottery tickets, raffle tickets, tambola tickets, scratch cards etc. stand classified under Chapter 49 which also goes to indicate that the product in question is rightly classifiable under Chapter 49. The order of the Commissioner (Appeals) is therefore, set aside." 27. Yet in another case of Malti Arts Pvt. Ltd. (supra), the Tribunal was considering the issue of classification of printing of job work basis of paper and paperboards, the design on the materials given and as suggested by the purchaser of the appellant th....
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....l and printing makes the rolls blank lottery tickets and the paper has ceased to be thermal paper. Commissioner has found fault with this contention about the changed character by pointing out that, in the absence of specific ticket numbers, the printed rolls continue to be thermal paper. 10. The finding of the Commissioner is erroenous and is contrary to normal commercial practices. In the very nature of selling tickets, printed formats cannot have all the particulars. As already noticed in para 7 of this order, HSN Explanatory Notes under Chapter 49 specifically recognizes this and clarifies that certain printed articles may be intended for completion at the time of use and still would remain in the heading 49.11 provided "they are essentially printed matter". The note goes on to clarify that printed forms (e.g. magazine subscription forms), blank multi-coupon travel tickets, circular letters, identity documents and cards etc. requiring only the insertion of particulars (e.g. dates and names) are classified in this heading. Thus, existence of blank portions in printed forms do not take them out of "other printed products or articles". Many are the items that readily come to....
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....t in the case of Metagraphs Pvt. Ltd. (supra), a ratio has been laid down which is guiding factor for coming to a conclusion whether the product will fall under the category of "product of Printing Industry" or otherwise. Their Lordship in Para 10 has laid down the ratio which is with respect reproduced. "10. The label announces to the customer that the product is or is not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The printing of the label is not incidental to its use but primary in the sense that it communicates to the customer about the product and this serves a definite purpose. This Court in Rollatainers case held that "what is exempt under the notification is the 'product' of the printing industry. The 'product' in this case is the carton. The printing industry by itself cannot bring the carton into existence". Let us apply this above formula to the facts of this case. The 'product' in this case is the aluminium printed label. The printing industry has brought the label into existence. That being the position and further the test of trade having understood this label as the product of printing industry, there is....