TaxTMI 
TaxTMI 
2024 (4) TMI 1328
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...., in their premises at Bangerghatta Road, Bangalore. The Preventive Officers of the Department visited the said premises of the appellant and on investigation, it came to their notice that the appellants are engaged in the manufacture of display /storage material which are used as display devices for trade advertisement by industrial houses and their major customers include GSK Asia Pvt. Ltd., Procter & Gamble Home Products Ltd., Britannia Industries Ltd., Pedelite, etc. However, the appellant had not registered with the department and not discharged excise duty at appropriate rate on the value of the clearance of excisable goods. Consequently, goods lying in the said premises in ready for dispatch condition have been seized under Mahazar dated 06.03.2014 and investigation commence by recording statements retrieving records, etc. On completion of investigation, show-cause notice was issued to the appellant on 27.10.2014 with a proposal to consider the process undertaken to manufacture display/storage materials be held as amounting to manufacture under Section 2(f) of the Central Excise Act, 1944 and proposed classification of the goods manufactured mentioned above under Chapter 940....
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....ays for products change seasonally and the promotions of such display range from one week to about 8 weeks. The said activities of the appellant were earlier investigated by the department on the issue of excisability in August 2004 and later dropped by the department. 3.1 The learned advocate has submitted that in response to the investigation by the department, it has been informed that the appellants are engaged in the segment of printing and providing printed "Trade Advertising Material" at the point of sale to FMCG Companies which is classifiable under Chapter Subheading 4901 of the CETA, 1985 attracting 'Nil' rate of duty. The activities carried out by them briefly are as below: (i) They employ about 30 persons at their Head Office (HO) in Koramangala who are engaged in conceptualization, design and creative work for preparing the Trade Advertising Material; (ii) Such customized or adopted designs are made suitable for printing and sent to their Hulimavu facility where the said designs are printed on vinyl sheets or paper; (iii) The designs printed on vinyl sheets and/or paper are then pasted on paper board, plastic boards, MDF sheets, etc.; ....
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....Kept in shelves with description of product 13 Parasite Metal or MDF with ads pasted Clipped to the side of shelves for display of products advertised 3.2 In support of their submission that the display stands were received in fully manufactured condition, the process of printing and pasting of the advertisement material on different types of stands, the appellant had enclosed necessary photographs and supply of the same to various customers. Also, they have relied upon the statements of Shri Avinash, Senior Manager (Finance) dated 14th February 2014 and Shri Thomas Joseph, Director dated 28th February 2014. 3.3 The appellant further submitted that from the photographic evidence and other documents placed on record, it is clear that the appellants have received the display stands as per the approved designs and specifications in fully manufactured condition. There is indeed no scope for any further processing of such already finished products. The appellants neither have any machineries nor facilities and skills to undertake any process to complete the manufacture of the display stands. Thus, the findings of the Commissioner in the impugned order that the appellan....
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....rk for advertisement or promotion of the products and brands in consultations with and as required by the customers. The designs and customised or artwork for advertising the products or brands is made suitable for digital printing on vinyl sheets, PVC foam board sheets, acrylic sheets, HIPS Sheets etc. The printed sheets are laminated, cut to required size and shape and pasted on the display stands received from the manufacturers by using super glue or a fixed by using split pins in case of hanging boards. The display stands contain the printed advertisements or promotional material in respect of the brand and product explaining their virtues, use advantage price discounts offered etc.. These stands are used as 'point of sale Advertising Material' by the customers at the retail outlets/showrooms for increasing the visibility of the Brand and Products to the customers and enhance sale of the products as explained by the customers in their statements furnished to the Department. 3.6 Further they have submitted that the display stands are displayed in the showrooms for a period of one week to about eight weeks and are removed thereafter from the showrooms and disposed of as scrap ....
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.... for the retail sale and not for just advertising. If such a finding is accepted, then the customers could have brought tracks, cabinet with shelves, etc., from the furniture manufacturers rather than placing orders on the appellants. Therefore, the conclusion of the Commissioner classifying the goods as 'other furniture' is baseless, illogical, contrary to the facts of the case and hence not sustainable. In the impugned order no specific adding has been assigned to each of the products. 3.10 The appellants have further submitted that it is a general principle of law that the classification of the goods is based on the common parlance test, commercial uses test, functionality Utility and Predominant use of the commodity. In support they referred to the following judgements: (i) CCE vs. Wockhardt Life Sciences Ltd: 2012 (277) ETL 299 (SC) (ii) Okay Play (India) Ltd vs. CCE, Delhi-III: 2005 (180) ELT 300 (SC) 3.11 On the issue of limitation, the learned advocate for the appellant submitted that all the facts are within the knowledge of the Department. The factory was visited by the preventive officers in August 2004 and statement of the Manager was recorded on....
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....¢ Sanjay Industrial Corporation vs. CCE, Mumbai: 2015 (318) ELT 15 (SC) • Kiran Ispat Udyog vs. CCE, Rajkot: 2015 (321) ELT 182 (SC) • Jaiprakash Industries Ltd. vs. CCE, Chandigarh: 2002 (146) ELT 481 (SC) • Larsen & Toubro Ltd vs. CCE, Pune: 2007 (211) ELT 513 (SC) 3.13 Consequently, penalty also not imposable on the appellants. Further, it is submitted that the direction for confiscation of 782 Nos. of subject goods seized on 6.3.2004 with an option to redeem the same on payment of fine of Rs.1,50,000/- and penalty also cannot be sustained since the goods involved are classifiable as 'Trade Advertising Material' under Heading 49.11 of CETA, 1985. When the classification and levy of excise duty is the subject matter of dispute involving interpretation of law, there is no ground to order confiscation of the goods and impose personal penalty. 4. Per contra, learned Authorised Representative (AR) for the Revenue reiterating the order submitted that the appellants were engaged in manufacture of excisable goods viz., display/storage material for which they procured frames, hangers, skeletons, etc., made to the specifications of the appell....
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....d log visitor details for potential leads. They can also be used to display the company's promotional items and business cards. Counters come in number of shapes and sizes and can be customised with company's own brand name. Further, he has referred to meaning of plinths, tables and chairs, showcases, AV stands, iPad Holders, etc., in submitting that the right exhibition stand furniture is to complement once stand is an important part of exhibition preparation. These exhibition stand features can really help to stand out amongst the crowd at a trade show. 4.2 The learned AR further submitted that the activities of the appellant are plainly not designing or printing advertisement material, it is supply of finished furniture on which goods can be displayed/stored or in some cases only display of the posters is possible. It may be noted that the finished products which are marketable as display/storage are made by the appellants and the raw skeleton procured by them has no identity a such display/storage furniture. However, as explained in the meaning of the exhibition furniture, simple wall hangings are also called display furniture in the common parlance and are therefore, correc....
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....rocesses are carried out to printout the display units also as narrated in the above paragraphs. The pictorial presentation of the said process is mentioned as below: 9. The principal argument of the Revenue is that the primary function of the aforesaid display units is for stacking of the materials at the retail outlet and the secondary function is for advertisement of the materials placed for display, hence, classifiable under Chapter Heading 9403 as other furniture; no specific subheading has been assigned by the Revenue. 10. Before addressing the rival contention, the relevant tariff entry and corresponding HSN notes needs to be referred which are reproduced below for easy reference: Chapter Heading 49.11: Tariff Item Description of goods Unit Rate of duty 4911 OTHER PRINTED MATTER, INCLUDING PRINTED PICTURES AND PHOTOGRAPHS 4911 10 - Trade advertising material, commercial catalogues and the like: 4911 10 10 --- Posters, printed kg. Nil 4911 10 20 --- Commercial catalogues kg. Nil 4911 10 30 --- Printed inlay cards kg. Nil 4911 10 90 --- Other kg.....
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....ding posters), year books and similar publications devoted essentially to advertising, trade catalogues of all kinds (including book or music publishers' lists, and catalogues of works of art) and tourist propaganda. Newspapers, periodicals and journals, whether or not containing advertising material, are however excluded (heading 49.01 or 49.02, as appropriate). (2) Brochures containing the programme of a circus, sporting event, opera, play or similar presentation. (3) Printed calendar backs with or without illustrations. (4) Schematic maps. (5) Anatomical, botanical, etc., instructional charts and diagrams. (6) Tickets for admission to places of entertainment (e.g., cinemas, theatres and concerts), tickets for travel by public or private transport and other similar tickets. (7) Microcopies on opaque bases of the articles of this Chapter. (8) Screens made by printing a film of plastics with letters or symbols to be cut out for use in design work. Such screens simply printed with dots, lines or squares are excluded (Chapter 39). (9) Maximum cards and illustrated first-day covers not bearing postage....
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.... --- Other kg. 12.5% 9403 40 00 - Wooden furniture of a kind used in the kitchen u 12.5% 9403 50 - Wooden furniture of a kind used in the bed room: 9403 50 10 --- Bed stead u 12.5% 9403 50 90 --- Other u 12.5% 9403 60 00 - Other wooden furniture u 12.5% 9403 70 00 - Furniture of plastics kg. 12.5% - Furniture of other materials, including cane, osier, bamboo or similar materials: 9403 81 00 -- Of bamboo or rattan u 12.5% 9403 89 00 -- Other u 12.5% 9403 90 00 - Parts kg. 12.5% HSN Explanatory Notes 9403 94.03 Other furniture and parts thereof. 9403.10 Metal furniture of a kind used in offices 9403.20 Other metal furniture 9403.30 Wooden furniture of a kind used in offices 9403:40 Wooden furniture of a kind used in the kitchen 9403.50 Wooden furniture of a kind used in the bedroom 9403.60 Other wooden furniture 9403.70 Furniture of plastics - Furniture of other materials, including cane, osier, bamboo o....
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....heading 44.18 if of wood). (d) Waste-paper baskets (of plastics, heading 39.26; of basket or wickerwork, heading 46.02; of base metal, headings 73.26, 74.19, etc.). (e) Hammocks (generally heading 56.08 or 63.06). (f) Mirrors designed for standing on the ground, such as cheval-glasses, swing-mirrors for shoe-shops, tailors, etc. (heading 70.09). (g) Armoured or reinforced safes (heading 83.03). On the other hand, containers specially designed to resist fire, impact and crushing and whose walls in particular do not offer any serious resistance to attempts at breaking them open by drilling or cutting are classified in this heading. (h) Refrigerators, ice cream machines, etc. (i.e., cabinets, etc., having the character of furniture but also equipped either with a refrigerating unit or with an evaporator of a refrigerating unit, or designed to receive such equipment) (heading 84.18) (see Note (1) (e) to this Chapter). However, ice-boxes, ice-chests and the like, and also insulated cabinets not equipped or designed to contain an active refrigerating element but insulated simply by glass fibre, cork, wool, etc., remain classified in this headi....
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....n the impugned order, the Commissioner while confirming the classification under Chapter 9403 observed that the primary function of the impugned goods manufactured and cleared by the appellant is for storing, stacking/display of products which are intended for sale in various retail outlets. Even though such a finding has been recorded by the learned Commissioner, however, not supported by any materials indicating that such are the primary function of the display units. 13. On the other hand, we find, the learned appellant in support of their contention that they are engaged in the service of conceptualisation and advertisement for their clients emphasised that in this process, they prepare the design of the advertising material depending on the circumstances in which the products are to be advertised by the clients in the retail outlets, then place orders with a fabricators to fabricate and supply the frames necessary for such advertisement. In support of their argument, they have placed on record purchase orders of the clients, wherein the requirement is mentioned as display units (page 82 of the paper-book); also they have placed evidence in the form Bills/ invoices issued by....
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....nother or for that matter food and medicine trolleys used in hospitals. Even though several characteristics of these above articles may be similar to a household furniture or may have trappings of the furniture, yet such articles which are specially manufactured to suit a particular purpose and use cannot be used in the household ordinarily and therefore cannot be termed as furniture." Applying the meaning of 'Furniture' as explained by the Hon'ble Supreme Court to the case in hand, it cannot be construed that the display material which has been supplied by the appellant after procuring skeleton- fabricated frames and affixing/pasting the printed material on the same in their premises would result into 'manufacture' of furniture. On the other hand, the purpose and object of the supply of the said printed materials on the procured frames by the appellant would safely be considered as for the primary purpose of advertisement and covered under the scope of Tariff Subheading 4911 1090 as 'Trading Advertising material'. 15.2 This is further clear from the judgment of the Hon'ble Supreme Court in Metagraphs Pvt. Ltd. (supra) case explaining what is the product of a printing industr....
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....erefore that the goods are products of the printing industry. In that case, they would not be classifiable under heading 94.05, since there are included elsewhere in the tariff." This view has been upheld by the Hon'ble Supreme Court as reported at 2015 (318) ELT 20 (SC), holding as follows: "4. It is abundantly clear from the aforesaid details that the process of manufacturing undertaken by the respondent i.e. printing is done by using thermocopied machine and therefore, it would fall under the Head 49.01. By no stretch of imagination, such goods can be classified under the Head 94.05 as no lamps and lighting fittings or search lights or spotlights are used by the respondent for the purpose of illuminated signs or illuminated name plates and sign boards. We, therefore, agree with the finding of the Tribunal. On the facts of these cases, we find no merit in these appeals and the same are dismissed." 16. Similarly, consistent views have been adopted by the Tribunals in explaining the scope of printing material in the context of classification of goods under Chapter 4911. In the present case, the appellant explained the process of manufacture carried out in their ....