1980 (10) TMI 69 - CGOVT - Central Excise

Printed cartons - Quasi-judicial proceedings - Interpretation - Classification - Criteria for

Summary

Issues:
1. Classification of printed cartons under Central Excise Tariff and eligibility for exemption under Notification No. 55/75.

Analysis:
The judgment involves a common issue regarding the classification of printed cartons under Tariff Item 68 of the Central Excise Tariff and their eligibility for exemption under Notification No. 55/75. The Appellate Collector initially exempted the printed cartons based on a previous decision but later, the Government of India issued show cause notices to reconsider this decision. The assessees argued that the Appellate Collector's decision should not be reviewed as it was based on a valid precedent. They contended that printed cartons are products of the printing industry and should be exempted. The Government observed that a later decision reversed the earlier stance, classifying printed cartons as products of the packaging industry rather than the printing industry. The Government emphasized that exemption notifications must be strictly construed, and the primary purpose of printed cartons being containers limits their classification as products of the printing industry.

The assessees further argued that printed cartons can only be manufactured by recognized printers with technical expertise, holding licenses for printing presses. They claimed that printing is the dominant activity in the manufacturing process, with other processes being ancillary. They highlighted the Ministry of Information and Broadcasting's national award for excellence in printing design, which includes printed paper containers, to support their position. However, the Government maintained that the essential function of a carton is as a container, and the printing process is not the culminating process in their manufacture. They cited examples of other packaging products involving printing, like metal containers, to illustrate that printing alone does not define a product as belonging to the printing industry.

Furthermore, the judgment referenced Order No. 466 of 1980 in the case of Vijay Flexible Containers, where the functions of packaging were outlined to emphasize that the scope of "product of printing industry" in the exemption notification is limited to items primarily serving communication purposes, such as books and periodicals. Consequently, the Government concluded that the decision in the Vijay Flexible Containers case applied to the present cases. Therefore, exercising their powers under Section 36(2), the Government set aside the previous orders-in-appeal and classified the printed cartons as products of the packaging industry, rendering them ineligible for exemption under Notification No. 55/75. The Government also declined the request for a stay on recoveries, emphasizing the need to exhaust remedies under the Central Excise Act before seeking writ remedies.