2000 (1) TMI 188 - AT - Central Excise

Summary

Issues: Classification of printed film under CET sub-heading 3920.39, whether the process of printing on film amounts to manufacture, duty implications, applicability of Supreme Court judgment.

In this case, the primary issue revolved around the classification of printed film under CET sub-heading 3920.39. The Respondents, engaged in manufacturing various goods falling under Chapter 39 of the Schedule to the CETA, 1985, sought classification of printed film under CET sub-heading 4901.90, attracting a nil rate of duty. Initially, the classification was provisionally approved under CET sub-heading 3920.31. However, a show cause notice was later issued proposing a change in classification to CET sub-heading 3920.39, asserting that the process of printing plain plastic film amounts to manufacture.

The Assistant Commissioner adjudicated the matter, concluding that the process of converting plain film into printed film constitutes manufacture, leading to the classification under CET sub-heading 3920.39 with duty implications. Subsequently, the lower appellate authority overturned this decision, stating that printing duty paid plain plastic film does not amount to manufacture. This prompted an appeal by the Revenue.

During the appellate proceedings, the learned DR argued that the process of printing on film transforms it into a different excisable commodity, thus constituting manufacture. In contrast, the Advocate for the Respondents cited a Supreme Court judgment outlining a two-fold test to determine if a process amounts to manufacture. The Supreme Court's ruling emphasized that if the original commodity retains its basic character even after the process, it does not amount to manufacture.

After considering the arguments and relevant legal precedents, the Appellate Tribunal referred to Chapter note 10 of the CETA, 1985, and previous decisions to conclude that printing on duty paid plain plastic film does not result in a new excisable commodity distinct from the original film. Citing the Supreme Court's decision in a similar context, the Tribunal upheld the lower appellate authority's ruling, stating that the activity of printing on duty paid plain plastic film does not amount to manufacture. Consequently, the impugned order was upheld, and the appeal by the Revenue was rejected.