2005 (9) TMI 13 - AT - Central Excise

(1) Printing - designs and pictures on PVC sheets - amounts to manufacture (2) printing on plain sheets classifiable under heading 39.20

Summary

Issues:
Classification of printed PVC sheets under Central Excise Tariff Act, 1985 - Whether falls under Chapter 39 or Chapter 49.

Analysis:
The appeal involved a dispute over the correct classification of printed PVC sheets under the Central Excise Tariff Act, 1985. The Assistant Commissioner classified the sheets under sub-heading 3920.39, resulting in a duty demand of Rs. 50,44,584.50. However, the Commissioner (Appeals) accepted the assessee's argument that the sheets should be classified under Chapter 49 as a product of the printing industry, leading to the present appeal.

The Tribunal considered the manufacturing process where plain PVC sheets were printed with designs and pictorial representations. The assessee argued that the printing did not amount to manufacture, or if it did, it should be classified under Chapter 49 attracting a nil rate of duty. The Tribunal referred to a previous order involving a similar issue where it was held that printing on sheets constituted manufacturing as a new identifiable product emerged with its commercial identity.

The Tribunal agreed with the previous decision, stating that printing on plain sheets resulted in a new product with a different commercial identity, rejecting the assessee's argument. Regarding classification, the appellate authority applied Section Note (2) of Section VII, which specified that printed goods not incidental to their primary use fall under Chapter 49. The Tribunal observed that the printing on plain PVC sheets was incidental, enhancing their appearance for the same purpose, thus maintaining their classification under Chapter 39.

Additionally, the Tribunal noted Chapter Note (10) of Chapter 39, clarifying that printed sheets would still be classified under Heading 39.20 even when printed with pictorial representations. Consequently, the Original Adjudicating Authority's decision to classify the goods under Heading 39.20 was upheld. The Tribunal also addressed the duty payment on printed sheets, allowing the adjustment of duty already paid on plain PVC sheets against the final duty on printed sheets, remanding the matter for quantification by the Assistant Commissioner.

In conclusion, the Revenue's appeal was allowed, affirming the classification of printed PVC sheets under Heading 39.20 and permitting the adjustment of duty paid on plain sheets towards the duty on printed sheets.