1999 (11) TMI 828 - AT - Central Excise

Summary

Issues Involved:
1. Classification of 'printed wrappers' and 'printed sleeves'.

Detailed Analysis:

Issue 1: Classification of 'printed wrappers' and 'printed sleeves'

The appeal arises from an order dated 10-10-1990 by the Collector (Appeals), Bombay, concerning the classification of 'printed wrappers' and 'printed sleeves'. The Assistant Collector classified these items under sub-heading 4818.90 of the Central Excise Tariff, attracting a basic excise duty of 12% ad valorem. The rationale was that the 'wrapper' is used for packing goods, and any printing (such as name, brand name, and information) is merely incidental. The Assistant Collector relied on the Explanatory Note C(11) of the Harmonized Commodity Description and Coding System, which includes confectionary wrappers, food wrappers, and other wrappers cut to size under Chapter 48 of the HSN.

The appellants contended that these items are products of the printing industry and should be classified under sub-heading 4901.90 of the CET Act, 1985. They argued that the primary purpose of the printing is to indicate the identification of goods and serve as an advertisement, thus making them products of the printing industry. They cited the Supreme Court ruling in Metagraphs Pvt. Ltd. v. Collector of Central Excise, Bombay (1996 (88) E.L.T. 630 (S.C.)), which held that printed aluminum labels are products of the printing industry because the printing communicates essential information to the customer.

The respondent's representative countered that the articles are already wrappers and sleeves, meant for packing, and thus fall under the packaging industry, as supported by the Supreme Court judgment in Rollatainers Ltd. v. Union of India (1994 (72) E.L.T. 793 (S.C.)), which stated that printed cartons are products of the packaging industry, not the printing industry.

Upon considering both sides, the Tribunal found the judgment in Rollatainers Ltd. more appropriate, concluding that printing on packaging material does not make it a product of the printing industry. The Tribunal noted that the product had emerged as packing material and as an article of paper/paperboard, and the printing was incidental. Therefore, the appeal was dismissed, affirming the classification under sub-heading 4818.90.

Separate Judgment by Vice President:

The Vice President observed that the Supreme Court in Metagraph Pvt. Ltd. noted that not all printed products are products of the printing industry; it depends on the nature of the products and other circumstances. He emphasized the need to examine whether the products came into existence prior to printing or if printing was essential. He proposed remanding the matter to the Assistant Collector to examine the samples and determine the facts, considering the Supreme Court's observations in Metagraph Pvt. Ltd.

Resolution of Difference of Opinion:

The matter was referred to a third member due to a difference of opinion. The third member agreed with the initial judgment that the products in question are used for packing and can serve their purpose even without printing. The third member cited the Tribunal's decision in New Jack Printing Works P. Ltd. (1997 (93) E.L.T. 78), which classified printed wrapping paper under sub-heading 4818.90, not 4901.90, as it serves the purpose of wrapping even without printing.

Majority Order:

The majority concluded that the products are indeed products of the packaging industry, and the appeal was dismissed, confirming the classification under sub-heading 4818.90.