1991 (2) TMI 112 - SC - Central Excise

Whether egg trays and other similar products manufactured by the appellant can be regarded as containers under the relevant entries in the Central Excise Tariff? Held that - The Glossary of Packaging Terms (USA) also shows that moulded pulp egg trays are put in a standard case which indicates that the egg trays containing the eggs are put in a case for the purpose of transport. In other words, the case in which the egg trays are put are container and not the egg tray itself. The Appellate Tribunal was right in taking the view that the egg trays and other similar products manufactured by the appellant cannot be regarded as containers under the relevant items of the Excise Tariff. Appeal dismissed..

Issues Involved:
1. Classification of egg trays and similar products under the Central Excise Tariff.
2. Applicability of exemption from central excise duty under specific tariff items.
3. Interpretation of the term "container" within the context of the Excise Tariff.

Detailed Analysis:

1. Classification of Egg Trays and Similar Products under the Central Excise Tariff:

The primary issue is whether egg trays and similar products manufactured by the appellant can be classified as "containers" under the relevant entries of the Central Excise Tariff. The old Tariff (First Schedule to the Central Excises and Salt Act, 1944) and the new Tariff (Schedule to the Central Excise Tariff Act, 1985) were considered. Under the old Tariff, Item 17(4) covered "Boxes, cartons, bags and other packing containers." The new Tariff under Heading 48.18 included "Cartons, boxes, containers, and cases."

The appellant initially classified its products under Item 68 (residuary entry) of the old Tariff but later sought classification under Item 17(4) to claim full exemption from excise duty. The Assistant Collector and the Appellate Tribunal held that the products were not "containers" but "articles of pulp," classifiable under Item 68 and sub-heading 4818.90 of the new Tariff, respectively.

2. Applicability of Exemption from Central Excise Duty:

By Notification No. 66/82-C.E., dated February 28, 1982, the Central Government exempted articles of paper or paper-board falling under sub-item (4) of Item 17 from the whole of the duty of excise, except printed boxes and cartons. The appellant's revised classification list sought exemption under this notification for its products. The Assistant Collector's re-examination led to a show cause notice and subsequent order classifying the products under Item 68, thus denying the exemption. This order was initially reversed by the Collector (Appeals) but later upheld by the Appellate Tribunal.

3. Interpretation of the Term "Container":

The crux of the judgment lies in the interpretation of the term "container." The appellant argued that their products are "containers" based on dictionary definitions and industry glossaries, which broadly define a container as any receptacle that holds, restrains, or encloses items. The appellant contended that egg trays are receptacles designed to protect eggs during storage and transport, thus qualifying as containers.

However, the judgment emphasized the context in which the term "container" is used in the tariff entries. The term "container" in Item 17 of the old Tariff and Heading 48.18 of the new Tariff is preceded and followed by terms like "boxes," "cartons," and "cases," suggesting a narrower interpretation. The court applied the principle of ejusdem generis, which means that general words following specific words should be interpreted in the context of the specific words.

The judgment concluded that "container" in the tariff context refers to enclosed receptacles analogous to boxes and cartons, used for storage and transportation. Since egg trays are open receptacles and not enclosed, they do not qualify as "containers" under the relevant tariff entries.

Conclusion:

The Supreme Court upheld the Appellate Tribunal's view that egg trays and similar products are not "containers" under the relevant items of the Excise Tariff. Consequently, the products are classifiable under sub-heading 4818.90 of the new Tariff, subject to a 12% excise duty, and not eligible for the exemption claimed under Item 17(4) of the old Tariff. The appeals were dismissed with no orders as to costs.

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