TaxTMI 
TaxTMI 
2026 (3) TMI 102
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....scription application forms, etc. On the basis of the intelligence, the respondents were not discharging Central Excise duty on clearance of certain products viz., bank passbooks, university answer booklets, bank account opening forms, etc., investigation was initiated by DGCEI and on completion of the investigation, show-cause notice was issued to them on 06.07.2016 demanding central excise duty of Rs.2,22,17,004/- for clearances of excisable goods during the period 01.06.2011 to 30.11.2015 with interest and penalty. On adjudication, demand was dropped. Hence, Revenue is in appeal. 3. At the outset, the learned Authorised Representative (AR) for the Revenue reiterating the grounds of appeal has submitted that on investigation against the respondent, it came to the knowledge of the department that even though the respondents are registered with Central Excise Department and discharged duty on certain goods viz., printed labels and cartons but failed to discharge duty on other products viz., printed passbooks, university answer booklets, bank account opening forms, etc., claiming its classification under Chapter 4910 of Central Excise Tariff Act, 1985 even thoug....
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....eading 4820. The only exception from Chapter 4820 are loose sheets, cut to size and printed with motifs or pictorial matter not merely incidental to their use, which is not the case here. The 'security' or 'special' features as held in the Order-in-Original as the source of 'essential character' are irrelevant for the purpose of classification; it has to be understood from the products primary function which is stationery. No fiduciary value attaches to these items; a passbook is not a negotiable instrument, nor is an answer booklet a certificate of title. Answering the question of 'printing bringing the product into existence', he has submitted that this test is circular and inapposite; all printed stationery is produced with the client's requirements, but the presence of blank spaces and preprinted formats does not convert an article of stationery into an article of printing industry under Chapter 49. Indeed, notebooks and diaries (explicitly cited in heading 4820) as well as various forms are invariable preprinted. 4. Further, he has submitted that an essential aspect of determining classification of printed product is to understand whether the product possess a 'fiduci....
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....lly and legally distinguishable since based on different goods (printed aluminium labels, lottery tickets, etc.) and delivered prior to insertion of Note 14 to Chapter 48 which the adjudicating authority failed to appreciate. 6. Further, he has submitted that clearance of paper scrap arising during the manufacture of such excisable goods attracts duty. 7. Per contra, Learned Senior Advocate for the respondent has submitted that the department seeks to rely on Note 14 to Chapter 48 which has been introduced with effect from 01.04.2012. The proposed heading 4820 under which the department seeks to classify the goods in question covers items of stationery which are generally available in the market like registers, account books, diaries and similar articles, exercise books and other articles of stationery, etc. It is his contention that Chapter Note 12 has an exception for Heading 4814 and Heading 4821 wherein the printing even if elaborate, the product continues to fall under Chapter 48 only. These two headings cover wallpaper and similar wall coverings (4814) and paper or paperboard labels of all kinds whether or not printed (4821). The Chapter Note 12 provides that othe....
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....merely incidental to the use of the product and such security printing prevents any mala fide attempt in the conduct of examinations. Since answer books are customized for the students, they are not sold as items of stationery but are issued by the respective universities to the respective students during examination. 9. Further, explaining the scope of Note 14, he has submitted that it only lays down that notwithstanding anything contained in Note 12, products of Chapter Heading 4820, if and where such products are printed with any character, logo, motif or format shall remain classified under this heading as long as such products are intended to be used for further printing or writing. He has submitted that firstly pictorial representations are not mentioned in Note 14 which are the bar code features in regard to answer sheets. Secondly, if products of Chapter Heading 4820 are printed with character, name, logo, motif or format they would not go out of Chapter Heading 4820, but that is not to say that where printing is not merely incidental to the use of the product and is substantial such products would will remain in Chapter 4820. Referring to the Explanatory Memorandu....
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....does not cover loose sheets, cut to size whether or not printed, embossed or perforated. The account opening forms and telecom subscription forms cannot fall under Heading 48201090 which is a residuary heading. If the items itself does not fall under Chapter 4820 then Chapter Note 14 cannot bring them under Chapter 4820. Moreover, Explanatory Note to Chapter 4901 itself lays down that 'printed forms' which require insertion of certain additional information for completion would fall under heading 4911. Further, applying Rule 3(c) of the General Rules of Interpretation of the Tariff where items are classifiable under two heading, it should be classified under the heading which occurs last i.e, in Chapter 49. Referring to the Board's Circular No.1052/1/2017 CX dated 23.02.2017, he has submitted that even educational workbooks with or without narrative texts which contain printed textual questions or exercises not incidental to the primary use of workbooks would all be classifiable under Chapter 49. So also printed forms which require insertion of additional information would fall under Chapter 4907. In support, he has referred to the judgment of the Hon'ble Supreme Court in the case ....
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....nery, of paper or paperboard; albums for samples or for collections and book covers, of paper or paperboard. -- Manifold business forms and interleaved carbon sets Kg. 16 10 0.30 10.300 Chapter sub-heading 49019900 Exim Code Item Description Unit Duty Rate Effect. Duty Cess Total Remarks (1) (2) (3) (4) (5) (6) (7) (8) 4901 4901 99 00 Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets -- Other Kg. Nil Nil 4911 OTHER PRINTED MATTER, INCLUDING PRINTED PICTURES AND PHOTOGRAPHS 4911 10 - Trade advertising material, commercial catalogues and the like : 4911 10 10 --- Posters, printed 4911 10 20 --- Commercial catalogues 4911 10 30 --- Printed inlay cards 4911 10 90 Other - Other 4911 9....
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....sification [Chapters 48/49] Circular No. 1052/1/2017-CX, dated 23-2-2017 F. No. 116/29/2015-CX.3 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Classification of articles of paper and printing industry - Regarding. Representations have been received from trade associations that consequent upon insertion of Chapter note 14 (w.e.f. 28-5-2012) to the Chapter 48 of Central Excise Tariff Act, 1985 disputes have cropped up in respect of classification of railway/bus/other tickets/passes, railway ticket rolls and bus ticket rolls, mark sheets/certificates, OMR Sheets/Answer Books with OMR, Answer booklets, inland letter cards, passbooks, applications forms, paper outer strip seal, Railway receipt (RR) and practical notebook. Also, reports received from field formations suggest that there is divergent practice of assessment of these goods. It is therefore, proposed to clarify the classification of these goods to ensure uniformity in practice of assessment across the country. 2. In this connection, statutory provisions are as under : ....
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....ue, by public or private bodies conferring ownership of, or entitlements to, certain financial interests, goods or benefits named therein. Apart from the certificates mentioned these documents include letters of credit, bills of exchange, travelers' cheques, bills of lading, title deeds and dividend coupons. They usually require completion and validation." (i) As per explanatory note to heading 49.11, "Certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms (e.g., magazine subscription forms), blank multicoupon travel (e.g., air, rail and coach) tickets, circulars, letters, identity documents and cards and other articles printed with messages, notices, etc., requiring only the insertion of particulars (e.g. dates and names) are classified in this heading........". The heading 4911 also includes 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. 3. Hon'ble Apex Court in the case of Holostick India Ltd. ....
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....nd such goods are intended to be used for further printing or writing. Answer books with or without OMR and answer booklets are intended for completion in manuscript while passbooks are intended for completion in manuscript or typescript. Provisions of Chapter note 12 and 14 of Chapter 48 and provisions of Rule 4 of General Interpretative Rules are applicable in the matter and therefore these are classifiable under heading 4820. (e) Inland letter cards - These are loose sheets or cards, cut to size and therefore are not covered under heading 4820 and also provision of Chapter note 14 is inapplicable in the matter. These Inland letter cards are printed with all particulars and shall not undergo any further printing or writing. They contain personal information like notices, reminders, etc. Sometimes these cards require only insertion of particulars like names and addresses. In the situation, where printing on inland letter cards is not merely incidental, goods are classifiable under heading 4911. However, plain letter cards are classifiable under heading 4817, which reads as "envelopes, letter cards, plain postcards and correspondence cards, of paper or paper boards..." ....
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....e respective Chapter Note 10, 12 and 14 of Chapter 48 along with Explanatory Notes of relevant Headings 4820, 4901, 4907, 4911. Also, the Circular took note of the decision of the Hon'ble Supreme Court in the Holostick India Ltd. (supra) in understanding the correct classification of the products illustrated. 20. In the present case the process of manufacture of the disputed items as disclosed by Mr. M. C. Lokesha, Assistant General Manager in his statement dated 23.06.2015 has been narrated in the show-cause notice as below: Bank Pass Books - The paper is cut into the required sizes. As per the designs given by the customers the necessary printing is carried out in their factory on the paper. A single printed sheet contains 4 to 8 UPS (i.e. same sheet in the books) and the single printed sheet is further cut into different pages. Such pages are arranged together to the required no. of pages along with the cover page and are subjected to thread stitching. Further it is folded and edges are trimmed to make the passbook. Sometimes, the cover page of the pass book is laminated after printing. Further, the same is packed in polythene covers inside the factory. T....
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....gns given by the customers the necessary printing is carried out in their factory on the paper. A single printed sheet contains 2 UPS (i.e. same sheet in the books) and the single printed sheet is further cut into different pages. Each page is further folded 3 times. Further, the same is packed in polythene covers inside the factory. The subscription applications are supplied by M/s. Airtel to their customers and the customers write / fill the details in the said forms. passbooks are used by the respective banks for further printing / entering of the details of transactions of their account holders. Leaflets - The paper is cut into the required sizes. The necessary literature is printed on the same and the same is cut and folded. These leaflets are used by the customers like M/s. Micro Labs, etc. as a guide/instruction about the product to their customers. Further, the same is packed in polythene covers inside the factory." 21. On the issue of classification of University answer papers, it is the claim of the appellant that the security features such as barcodes, OMR fields, special threading and watermark of the university inserted into answer booklets are not commonly....
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....lassification". 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." 23. Applying the ratio of the aforesaid case, it cannot be denied that since the primary objective/ purpose of University answer booklets are for writing by the candidates in the examination in response to the question papers set, the security features to make the answer sheets damper proof being ancillary, therefore it is rightly classifiable under Chapter....
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....morandum pads, diaries and similar articles [exercise books], blotting pads, binders (loose-leaf or other), folders, file covers, manifold business forms interleaved carbon sets and other articles of stationery, of paper or paper board; albums for samples or for collections and book covers, of paper or paperboard 4820 10 - Registers, account books, note books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles. 4820 10 10 --- Registers, account books 4820 10 20 --- Letter pads 4820 10 90 --- Other 4820 20 00 - Exercise books 4820 30 00 - Binders (other than book covers), folders and file covers 4820 40 00 - Manifold business forms and interleaved carbon sets 4820 50 00 - Albums for samples or for collections 4820 90 - Other 4820 90 10 --- Blotting paper cut to size 4820 90 90 --- Other 16. As per provision of Act, 1971, that the Pattadar Pass Book cum Title Deed is a document containing the details of the land owned by a person. The entries in the Pattadar Pass Book are based on the Record of Rights which is prepared in terms of the provisi....
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....." 26. Further, reading the above CBEC Circular, we find that answer booklets and bank passbooks are specifically considered at Clause (d) of Para 4 of the said Circular and clarified that these items would fall under scope of Chapter Subheading 4820. As far as other manufactured items viz., University Passbooks, Bank Account Open Forms, Bank Deposit/Withdrawal Challans, Airtel Subscription Application, leaflets, etc., as per the said Circular cannot be considered to be classifiable under Chapter Subheading 4820; but the same are classified under Chapter 49. 27. This Circular has been considered by the Tribunal in the case of Nagpur Business Forms Pvt. Ltd. Vs. CCE, Nagpur [2020(2) TMI 283 - CESTAT, Mumbai] and M/s. Samanthu Business Forms Pvt. Ltd. vs. CCE, Bangalore: Final Order No.20032/2026 dated 16.01.2026 and followed in deciding the classification of the items referred therein. 28. On the issue of scrap paper which arise during the process of manufacturing of answer sheets, forms, cheque books, passbooks, etc., it is argued that appellant is not a manufacturer of paper from pulp, hence, there is no manufacturing process involved. The paper waste are all end-cu....