2019 (3) TMI 608 - AT - Central Excise

Classification of goods - imported thermal paper - classified under chapter 48 or 49 of CEA - printing of the name of the bank and coding to read the end of statement transacted, is cut and slit and placed in ATMs in rolls. - Held that - with respect to the impugned goods viz., the thermal rolls, made to a pre-defined shape for being used in ATMs, there may well be some printing of the name of the bank, logo, etc., but that is merely incidental to the final use of the product, which is, spewing out in printed form the details of the transaction entered into by the bank customer. Printing on such ATM rolls is thus only a pre-printing for identification of the bank ATM concerned and is evidently incidental to their primary use. The decision in the case of M/s. ITC Ltd. Vs. Collector of Central Excise, Madras 1997 (12) TMI 115 - SUPREME COURT OF INDIA relied upon by the Ld. AR is fully applicable to the facts of this case. In the said judgement, the Hon ble Apex Court has held that paper/paper board articles for packaging of cigarettes, printed, the primary use of such articles being in connection with packaging of cigarettes and printing thereon being merely incidental to their primary use, are correctly classifiable under Chapter 48 - appeal allowed - decided in favor of Revenue.

Summary

Issues:
Classification of goods under Central Excise Tariff Act, Misclassification of products, Duty demands, Appeal against Orders-in-Original, Classification under CETA 4811, CETA 4901, Chapter Note 12 interpretation, Pre-printed goods classification, Case laws applicability, Printing on thermal paper rolls, Primary use of goods, Incidental printing.

Analysis:
The judgment revolves around the classification of goods under the Central Excise Tariff Act, focusing on the misclassification of thermal paper rolls by the respondent. The Department contended that the imported thermal paper, post-printing, should be classified under CETA 4811 9099, attracting specific duties. Show Cause Notices were issued, leading to duty demands and penalties confirmed in Orders-in-Original, subsequently appealed by the respondent.

The Commissioner (Appeals) set aside the original orders, asserting that the impugned goods are rightly classifiable as ATM rolls under CETA 4811, emphasizing the primary use of the goods in printing account statements. The Department argued that the printing on the thermal paper was incidental to its primary use, citing Chapter Note 12 of Chapter 48 of the Central Excise Tariff Act.

The Tribunal analyzed the case laws cited by both parties, distinguishing them based on the nature of goods involved. It emphasized that the printing on the thermal rolls was merely incidental to their primary use of spewing out printed transaction details, aligning with the precedent set in the case of M/s. ITC Ltd. Vs. Collector of Central Excise, Madras.

Ultimately, the Tribunal ruled in favor of the Revenue, setting aside the Commissioner (Appeals) order and upholding the duty demands, interest, and penalties confirmed by the Original Authorities. The judgment highlighted the importance of primary use and incidental printing in determining the classification of goods under the Central Excise Tariff Act, reaffirming the relevance of legal precedents in such matters.