1990 (2) TMI 164 - AT - Central Excise

Issues Involved:
1. Classification of printed paperboard sheets.
2. Applicability of Tariff Heading 4901.90.
3. Applicability of Tariff Heading 4818.90.
4. Applicability of Tariff Heading 4811.90.
5. Benefit under Notification No. 49/87-C.E.
6. Determination if printing and cutting amount to manufacture.

Detailed Analysis:

1. Classification of Printed Paperboard Sheets:
The appellants filed a classification list effective from 24-1-1987, seeking classification under Tariff Heading 4901.90 of the Central Excise Tariff Act, 1985, for "printing of paper board sheets as per customers size & specifications" at a nil rate of duty. The Assistant Collector classified the product under Heading 4818.90 at 12% ad valorem, stating that the product did not fall under Chapter 49 as the printing was done on duplex board and craft paper, not paper. The Collector (Appeals) overturned this, classifying it under Heading 4901.00, noting the products were printed sheets not subjected to further processes like cutting, creasing, and pasting.

2. Applicability of Tariff Heading 4901.90:
The Collector (Appeals) classified the printed sheets under Heading 4901.00, which covers "printed books, newspapers, pictures and other products of the paper printing industry." However, the Tribunal noted that Chapter Note 8 to Chapter 48 states that printed paper and paperboard, unless merely incidental to the primary use, fall under Chapter 49. The Tribunal found the printing on the duplex paperboard and craft paper sheets incidental to their primary use as cigarette boxes, thus not classifiable under Heading 4901.00.

3. Applicability of Tariff Heading 4818.90:
The Assistant Collector initially classified the printed sheets under Heading 4818.90, which covers "other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres." The Tribunal, however, observed that the printed sheets were not converted into flattened or folded cigarette slides, boxes, or cartons, thus not fitting under this heading.

4. Applicability of Tariff Heading 4811.90:
Both parties during the hearing agreed that the correct classification should be under Heading 4811.90, which includes "paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface-coloured, surface-decorated or printed, in rolls or sheets other than goods of Heading 48.03, 48.09, 48.10 or 48.18." The Tribunal agreed, noting that printed sheets of craft paper and duplex paperboard are correctly classifiable under Tariff Heading 4811.90, as they do not fall under the other specified headings.

5. Benefit under Notification No. 49/87-C.E.:
The respondents claimed the benefit of Notification No. 49/87-C.E., dated 1-3-1987, which relates to converted types of paper. This point was raised for the first time during the hearing before the Tribunal. The Tribunal remanded the matter to the jurisdictional Assistant Collector to examine this claim, considering the materials and previous decisions relied upon by the respondents.

6. Determination if Printing and Cutting Amount to Manufacture:
The respondents argued that the processes of printing and cutting do not amount to manufacture, citing judgments from the Gujarat High Court. The Tribunal noted that this point was also raised for the first time during the hearing and remanded the matter to the Assistant Collector for examination, providing an opportunity for personal hearing.

Conclusion:
The Tribunal concluded that the correct classification of the printed sheets of craft paper and duplex paperboard is under Heading 4811.90. The matter was remanded to the Assistant Collector to examine the applicability of Notification No. 49/87-C.E. and whether the processes of printing and cutting amount to manufacture.

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