1998 (3) TMI 159 - AT - Central Excise

Summary

Issues Involved:
1. Classification of printed cigarette shells, slides, and hinged lid blanks (H.L. Blanks) under erstwhile T.I. 68 or T.I. 17(4).
2. Applicability of exemption Notifications 104/82 and 66/82.
3. Determination of whether the printed outer shells, slides, and H.L. Blanks are "goods" under the Central Excise Act, 1944.

Detailed Analysis:

1. Classification Under Erstwhile T.I. 68 or T.I. 17(4):
The respondent, engaged in the production of printed cigarette shells, slides, and H.L. Blanks, initially sought classification under T.I. 68 and claimed exemption under Notification 104/82. The Assistant Collector classified the goods under T.I. 17(4) and denied the exemption. The Collector (Appeals) reclassified the goods under T.I. 68, following the decision in Golden Tobacco Co. The Tribunal was tasked with determining the correct classification.

The referring Bench noted that printed outer shells and slides are parts of cigarette packets, marketable, and thus excisable. The Bench also found merit in the Department's contention that H.L. Blanks could be classified under T.I. 17(4) as cartons or boxes in a flattened/unassembled form. However, the final judgment held that outer shells, slides, and H.L. Blanks are not boxes or containers under T.I. 17(4) due to their specific characteristics and usage in the cigarette industry. Consequently, these items were classified under T.I. 68.

2. Applicability of Exemption Notifications 104/82 and 66/82:
The respondent claimed exemption under Notification 104/82 for goods classified under T.I. 68. The Tribunal examined whether the goods fell under the exemption list in the notification. The Supreme Court's decision in Rollatainers Ltd. clarified that printed cartons are products of the packaging industry, not the printing industry, and thus not eligible for exemption under Notification 104/82.

The Tribunal concluded that outer shells, slides, and H.L. Blanks, although classified under T.I. 68, did not qualify for exemption under Notification 104/82 since they are not products of the printing industry. If the goods were classified under T.I. 17(4), they would attract the benefit of Notification 66/82, which exempts certain articles of paper and paperboard, excluding printed boxes and cartons.

3. Determination of "Goods":
The respondent contended that the printed outer shells, slides, and H.L. Blanks are not "goods" within the meaning of the Central Excise Act, 1944, as they are not marketable in their form. The Tribunal reviewed relevant case law, including decisions in Zupiter Printery and Asia Tobacco Co., which held that outer shells and slides are not boxes or containers and thus not excisable under T.I. 17(4).

The Tribunal noted that outer shells and slides are distinct products with specific names, known to the trade, and marketable. The conversion of printed paperboard into these items constitutes "manufacture" under Section 2(f) of the Act. Therefore, these items are "goods" and excisable under T.I. 68.

Separate Judgment by S.L. Peeran, Member (J):
S.L. Peeran dissented, arguing that the printed shells and H.L. Blanks are not "goods" as defined under the Central Excise Act, 1944. He emphasized the judgments in Zupiter Printery and Asia Tobacco Co., which ruled that these items are not boxes or containers and are not excisable under T.I. 17(4). Peeran contended that these items should not be classified as products of the packaging industry and should be eligible for exemption under Notification 66/82.

Conclusion:
The Tribunal held that:
- Outer shells, slides, and H.L. Blanks made from printed paperboard fall under erstwhile T.I. 68, not T.I. 17(4).
- These articles do not qualify for exemption under Notification 104/82.
- If classified under T.I. 17(4), they would attract the benefit of Notification 66/82.
- The respondent's classification lists are approved subject to these findings.

The appeal by the Department was dismissed accordingly.