1995 (8) TMI 281 - AT - Central Excise

Summary

Issues Involved:
1. Classification of printed racks, shells, and other printed components used in cigarette packaging.
2. Determination of whether these items fall under Chapter 48 or Chapter 49 of the Central Excise Tariff Act.
3. Consideration of the primary use of the printed items and whether the printing is merely incidental.
4. Marketability and classification of components of cigarette packets.

Detailed Analysis:

1. Classification of Printed Racks, Shells, and Other Printed Components:
The appellants, engaged in the manufacture of cigarettes, filed classification lists for various printed components used in cigarette packaging, claiming classification under sub-heading 4901.90, which covers printed products attracting nil duty. The Assistant Collector rejected this classification, holding that the items were primarily used for packaging and thus classifiable under sub-headings 4818.13 and 4819.12. This decision was upheld by the Collector Central Excise (Appeals).

2. Determination of Whether Items Fall Under Chapter 48 or Chapter 49:
The appellants contended that the printed items should be classified under Chapter 49 as "Products of Printing Industry" because the printing was not merely incidental but essential for statutory and marketing purposes. The Revenue argued that the primary function of these items was packaging, making the printing incidental. The Tribunal referred to Note 8 of Chapter 48, which states that printed articles primarily used for packaging fall under Chapter 48, not Chapter 49.

3. Consideration of Primary Use and Incidental Printing:
The Tribunal examined whether the primary use of the disputed items was for packaging and whether the printing was incidental. It referenced the Supreme Court's decision in the Rollatainers case, which held that the essential characteristic of a carton is its capacity to contain, not the printing. The Tribunal concluded that the primary use of the items was packaging, and the printing, regardless of its quality or statutory importance, was incidental.

4. Marketability and Classification of Components:
The Tribunal also considered the marketability of the items. It referred to previous judgments, including the ITC Ltd. case, which held that components like inner slides for cigarette packets are marketable and classifiable under sub-heading 4818.90. The Tribunal found that the disputed items, being components of cigarette packets, were similarly marketable and should be classified under sub-heading 4818.90 up to 29-2-88 and under sub-heading 4823.90 from 1-3-88 onwards.

Conclusion:
The Tribunal held that all disputed items were classifiable under sub-heading 4818.90 up to 29-2-88 and under sub-heading 4823.90 from 1-3-88 onwards. The appeal filed by the Revenue was rejected, and the impugned orders were modified accordingly. The appeals filed by the appellants were disposed of in these terms.