1997 (1) TMI 252 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product under the Central Excise Tariff Act.
2. Applicability of Supreme Court judgments in Rollatainers Ltd. v. Union of India and Metagraphs Pvt. Ltd. v. Collector of Central Excise, Bombay.
3. Determination of whether the product is a packaging material or a printing industry product.

Issue-wise Detailed Analysis:

1. Classification of the Product under the Central Excise Tariff Act:
The primary issue revolves around the classification of the printed wrappers used for Cadbury's Dairy Milk under the Central Excise Tariff Act. The Department contended that the product should be classified under Tariff Heading 4818.90, while the assessee argued for classification under sub-heading 4901.90, claiming it as a product of the printing industry. The Assistant Collector initially classified the product under sub-heading 4818.90, attracting a 12% duty, which was contested by the assessee. The Commissioner of Central Excise (Appeals) then reclassified it under sub-heading 4818.12 or 4818.13, depending on the constitution of the product. Both parties challenged this decision.

2. Applicability of Supreme Court Judgments:
The Department relied on the Supreme Court judgment in Rollatainers Ltd. v. Union of India, which held that materials used for packaging purposes, even if printed, are not products of the printing industry but of the packaging industry. The assessee attempted to distinguish this case, arguing that the printed paper in question should be considered a product of the printing industry. However, the Tribunal referenced the Supreme Court judgment in Collector of Central Excise Bombay v. Paper Print Product Co., which clarified that the Rollatainers case applies to both cartons and packaging materials, reaffirming that packaging products, even if printed, are not classified under the printing industry.

3. Determination of Whether the Product is a Packaging Material or a Printing Industry Product:
The Tribunal examined the nature and function of the printed wrapper. It was noted that the wrapper is primarily used for wrapping the chocolate, with the printed information being incidental. The Tribunal emphasized that the essential characteristic of the product is its use as a wrapper, not the printed matter. This aligns with the reasoning in Rollatainers, where the Supreme Court held that the primary function of a product determines its classification, not the incidental printing. The Tribunal also referenced the Supreme Court judgment in Metagraphs Pvt. Ltd., distinguishing it from the current case as Metagraphs involved labels fixed to other products, whereas the current case involved a wrapper used for packaging.

Conclusion:
The Tribunal concluded that the printed wrapper for Cadbury's Dairy Milk should be classified under sub-heading 4818.90 as an article of paper, not under sub-heading 4901.90 as a product of the printing industry. The appeal by the Department was allowed, and the cross-objection by the assessee was dismissed. The Tribunal's decision was based on the Supreme Court's interpretation in Rollatainers and Paper Print Product Co., which established that packaging materials, even if printed, are not products of the printing industry.