2013 (8) TMI 95 - AT - Central Excise

Classification - Appellant are printing various texts on the steel sheets received by them as per the design and the specifications of the sheet suppliers Held that - Printed sheets have to be treated as products of printing industry and hence, the process of printing would amount to manufacture Relying upon the Apex court judgment in the case of Metagraphs Pvt. Ltd. 1996 (11) TMI 68 - SUPREME COURT OF INDIA and Johnsons & Johnsons 1997 (7) TMI 138 - SUPREME COURT OF INDIA has held that printed aluminium labels, paper printed labels, plastic printed labels and cloth printed labels are the products of printing industry classifiable under Chapter 49 of the Tariff - Under Chapter 49 of the Tariff, the rate of duty is nil and as such, the duty demand by classifying the printed sheets under heading 7210.30 would not be sustainable Decided in favor of Assessee.

Summary

Issues:
1. Whether the activity of printing steel sheets amounts to manufacture?
2. Whether the printed sheets would attract central excise duty under Heading No. 7210.30 of the Tariff?

Issue 1: Activity of Printing Steel Sheets as Manufacture

The appellant, a manufacturer of tin containers and printed sheets, received tin plated steel sheets from customers for printing as per specifications. The department contended that printing steel sheets constitutes manufacturing, leading to a duty demand. The Addl. Commissioner confirmed the duty demand and imposed penalties. The Commissioner (Appeals) upheld this decision. The appellant argued that printing on cut-to-size sheets does not amount to manufacture, and the printed sheets should be classified under Chapter 49 with a nil duty rate, citing relevant case law. The Tribunal noted that the printing conveys information, making the printed sheets products of the printing industry. Referring to precedent cases, the Tribunal held that printed sheets fall under Chapter 49, not Heading 7210.30, where the duty rate is nil. Consequently, the printing activity qualifies as manufacture, and the duty demand under Heading 7210.30 was deemed unsustainable. Thus, the impugned order was set aside, and the appeal was allowed.

Issue 2: Central Excise Duty on Printed Sheets

The crucial question was whether the printed sheets would attract central excise duty under Heading No. 7210.30 of the Tariff. The Tribunal analyzed the nature of the printing activity, emphasizing that the printed sheets were products of the printing industry conveying information. Citing Supreme Court judgments, the Tribunal concluded that the printed sheets should be classified under Chapter 49 with a nil duty rate, not under Heading 7210.30. By classifying the printed sheets as a product of the printing industry, the duty demand under Heading 7210.30 was deemed unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed.

This judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Shri Rakesh Kumar, resolved the issues by determining that the activity of printing steel sheets constituted manufacture and that the printed sheets should be classified under Chapter 49 with a nil duty rate, not under Heading 7210.30. The decision was based on the nature of the printing activity and relevant case law, ultimately setting aside the duty demand and penalties imposed on the appellant.