1998 (1) TMI 182 - AT - Central Excise

Summary

Issues:
Manufacture of printed cartons, Classification under Tariff Headings, Demand of duty, Activity of folding and stapling, Pasting of printed labels, Burden of proof on Revenue, Limitation period.

Analysis:

Manufacture of Printed Cartons:
The case involved a dispute regarding whether the activity of folding, stapling, and pasting printed labels on plain cartons by the respondent constituted the manufacture of printed cartons. The Revenue contended that these activities led to the creation of a new commodity falling under a different tariff heading, justifying the imposition of duty. On the other hand, the respondent argued that no new commodity emerged from these activities, and thus, no duty liability should be imposed.

Classification under Tariff Headings:
The central issue was the correct classification of the cartons produced by the respondent, determining whether they qualified as printed cartons under specific tariff headings. The classification was crucial as it determined the duty liability applicable to the goods.

Demand of Duty and Limitation:
The Revenue issued a demand for duty alleging that the respondent had suppressed the fact of manufacturing printed cartons, leading to a demand for recovery. The question of whether the demand was sustainable depended on whether the activities of the respondent constituted the manufacture of printed cartons. Additionally, the issue of the limitation period for raising the demand was raised by both parties.

Activity of Folding and Stapling, Pasting of Printed Labels:
The core dispute revolved around the activities undertaken by the respondent after purchasing plain cartons, including folding, stapling, and pasting printed labels. The Revenue argued that these activities transformed the plain cartons into printed cartons, justifying duty imposition. Conversely, the respondent contended that these activities did not result in the creation of a new commodity.

Burden of Proof on Revenue:
The judgment highlighted that the burden of proof regarding the classification of goods and the imposition of duty lay with the Revenue. The lack of evidence presented by the Revenue to demonstrate that pasting printed labels on plain cartons constituted the manufacture of printed cartons worked in favor of the respondent.

Conclusion:
The Appellate Tribunal held that the activities of the respondent, including folding, stapling, and pasting printed labels on plain cartons, did not amount to the manufacture of printed cartons. The Tribunal emphasized that no new commodity emerged from these activities, and the burden of proof regarding the classification and duty liability rested with the Revenue. As a result, the appeal by the Revenue was dismissed, and the demand for duty was not upheld based on the lack of evidence provided by the Revenue to support their claims.