TaxTMI 
TaxTMI 
2015 (10) TMI 42
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....,514/- under proviso to Section 11A(1) and also proposed for penalty under Section 11AC. Penalty was also proposed on the co-noticees under Rule 26. Adjudicating authority in his impugned order dt. 12.12.2014 by relying Tribunal s order in the appellant s own case i.e. Holostick India Ltd. Vs CCE Meerut-II - 2004 (167) ELT 301 (Tri.-Del.) classified the goods under 3919 of CET along with interest and confirmed the demand and also imposed equal penalty under Section 11A and imposed penalty of Rs. 5 crores on Shri U.K. Gupta, Chairman of appellant company (Appeal No.E/40500/15) and Rs. 2 crores on Shri S.K. Garg, Technical Director (E/40501/2015) and Rs. 2 crores on Shri M. Manoranjan Mahapatra, Senior Manager (E/40503/15). Hence appellants filed the respective appeals before Tribunal. 3. Ld. Counsel, Dr. G.K. Sarkar appearing for the appellant submits that the appellant had a manufacturing unit at Noida. He explained that they are exclusively supplying security holograms to the Government of Tamil Nadu to State Excise & Prohibition Wing. He drew our attention to the agreement dt. 6.9.2011 enclosed at page 145 of the paper book signed between Commissioner of Prohibition and Ex....
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....han what was manufactured in Chennai. At Noida unit, they have produced Holograms out of polyester film which is classified under 39. He submits that they have used stamping foil at Chennai for making Holograms supplied to Govt of Tamil Nadu which is classified under chapter 32121000. He further submits that against the Tribunal s order of Noida unit, they preferred appeal before the Hon ble Supreme Court and the Hon ble Supreme Court in their order reported in 2015 (318) ELT 529 (SC) set aside the Tribunal s order. and Hon ble Supreme Court has settled the issue finally and also set aside the Board s circular dt. 21.6.96. The Hon'ble Supreme Court categorically held that the primary use of the product (hologram) is security and not the quality of being adhesive and classified under 4901. 3.2 He drew attention to chapter note 2 of chapter 49 of HSN Explanatory Notes and the general exclusion of Headings 3918, 3919, 4814 or 4821 which are excluded from this chapter heading 39 even if they are printed with motifs, characters or pictorial representations which are not merely incidental to the primary use of the goods. He further submits that their product is not covered under exc....
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....e Board s circular No.35/96-Cus. dt. 21.6.96 and proceeded to classify the Hologram under chapter heading 39199090 as self-adhesive plates, sheets, film, foil , tape strip and other flat shapes, of plastics whether printed or otherwise. 7. In this regard, the Tribunal co-ordinate Bench of Mumbai in the case of Holographic Security Marking Systems Pvt. Ltd. Vs CCE Mumbai - 2003 (151) ELT 470 (Tri.-Mumbai) on an identical issue of hologram produced from stamping foils as base material has allowed the appeal of the appellant and classified the holograms under chapter 4901. The relevant para 8 of the Tribunal's order is reproduced as under:- "8. The material upon which the appellant began its work is stamping foil, with a supporting sheet of plastic. Unless the process to which the appellant subjects the material alters it to such extent that it is no longer classifiable in Heading 32.12, it will not lead to Heading 39.19. The only possible way that a stamping foil can become plastic, that we can conceive of is, to remove the metal of pigment which is deposited on the stamping foil. The fact that the stamping foil become self-adhesive will not by itself result in its ceasi....
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.... original coated metallised film that has been used by the appellant has already been classified under sub-heading 3920.36 as a flexible metallised film of plastic. The fact that it got laminated later would not take it out of this particular sub-Heading. The only question which arises is, after such classification, which is not disputed by the appellant, whether the relevant Tariff Entry would be 39.19 or 49.01. 9. On a cursory reading of Entry 39.19, it becomes clear that it is part of a general scheme dealing with various items of plastics and must be read together with 39.20 as 39.20 begins with the expression Other plates.... . So read, it is clear that what is important is that various sheets, films, etc., of plastic should become self-adhesive in order to attract 39.19. If, in addition, there is printed matter on such sheets, films, etc., the question is whether the end product is properly classifiable under 49.01 which refers to other products of the printing industry or whether it falls within self-adhesive sheets, films, etc. 10. The first thing to be noticed about Tariff Entry 49.01 is that it refers to printed books, newspapers and pictures. Mr. K. Radhakrishnan sou....
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....products of the printing industry should be read ejusdem generis with the three expressions preceding these words, namely, printed books, newspapers, pictures . 14. We do not find any genus in any of these expressions. Indeed, it is clear that the expressions manuscripts, typescripts and plans which are also part of the Heading also do not reveal that there is any one genus to which all these items can be attributed. All these expressions speak of printed matter. 15. The other argument, namely, that the expression printing industry that is referred to hereinabove, which would refer to an industry which includes printing presses and nothing beyond, is also in our opinion not correct. A simple example will suffice. Newspapers, which are included within Entry 49.01 are obviously products of the newspaper industry and not of the printing industry as is contended by Shri Radhakrishnan in the narrow sense noted above. The printing industry would, therefore, refer to products of various industries other than the printing industry stricto senso, which has printed material on them. Thus, construed, it is clear, that Tariff Entry 49.01 would also be attracted on the facts of this case. O....
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....nclature was taken into account to reduce disputes on account of tariff classification . Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. This being the expressly acknowledged basis of the structure of Central Excise Tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. The ISI Glossary of Terms has a different purpose and, therefore, the specific purpose of tariff classification for which the internationally accepted nomenclature in HSN has been adopted, for enacting the Central Excise Tariff Act, 1985, must be preferred, in case of any difference between the meaning of the expression given in the HSN and the meaning of that term given in the Glossary of Terms of the ISI. 18. When one goes to the HSN Explanatory Notes to other printed matter , Item No. 10 which has already been referred to hereinabove states that self-adhesive printed stickers designed to be used, for example, for publicity, advertising or mere decoration, e.g. comic stickers and window ....
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.... computer, embossed, photographed, photo-copied, thermocopied or typewritten. Further, as per general explanatory notes to HSN - page 691, with the few exceptions as referred to in these notes, Chapter 49 covers all printed matter of which the essential nature and use is determined by the fact of its being printed with motifs, characters or pictorial representations. Keeping in view the distinctive character, process of 6. manufacture, relevant tariff headings, Section notes, Chapter notes and HSN notes, the Board is of the view that photo-identity cards and holograms merit classification under sub-heading 4901.90 of the Schedule to the Central Excise & Tariff Act, 1985. All pending disputes may be finalized in view of the above 7. guidelines. Field formations and trade may be informed accordingly. Circular No. 35/96-Cus., dated 21-6-1996 Subject : Classification of holograms under First Schedule, CTA, 1975 - Regarding. "Doubts have been raised regarding classification of embossed holograms under First Schedule to the Customs Tariff Act, 1975 (Customs Tariff), in the context of the Boards Circular No. 141/52/95-CX.4, dated 14-8-1995 stating the photo-identify cards and h....
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.... Notes of HSN below Heading 39.19 which reads as under : - It should be noted that this heading includes articles printed with motifs, character or pictorial representations which are not merely incidental to the primary use of the goods (See Note 2 to Section VII) . General Explanatory Notes of HSN below Chapter 49 clearly mentions that Goods of Headings 39.18, 39.19, 48.14 or 48.21 are also excluded from this Chapter, even if they are printed with motifs, characters or pictorial representations, which are merely incidental to the primary use of the goods. For this reason self-adhesive printed stickers designed to be used, for example, for publicity, advertising or mere decoration, e.g. comic stickers and window stickers mention in HSN Notes below Heading 49.11 would not cover the products of Heading 39.19. In view of this, the decisions relied upon by the learned Advocate are not applicable to the facts of the present matters. In Holographic Security Marking Systems case the product involved was stamping foils falling under Heading 32.12 of the Tariff which was classified under Heading 49.01 after the hologram was printed thereon. The Tribunal observed that until the pr....