2015 (9) TMI 1210 - AT - Central Excise

Classification of goods - printing of gray wrappers which is used in the packaging of cigarette packs. - Classification under heading 4823.90 or under heading 4901.90 - Manufacturing of goods through job worker - held that - Goods were being manufactured through their job workers and they were not themselves manufacturing - As such we note that the classification under sub-heading 4901.90 of the Central Excise Tariff Act holding the goods to be products of printing industries and thus attracting NIL rate of duty in the case of Sri Kumar Agencies has almost reached finality even though the same stands appealed against by the Revenue before the Hon ble Supreme Court but there is no stay of operation of the same. - goods in question are properly classified under heading 4901.90 which attracts NIL rate of duty and no demands of duty can survive against the assessee. If that be so no penalties can be imposed against M/s. VST Industries Ltd. or the other appellants who are employees of M/s. VST Industries Ltd. Accordingly the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Classification of printed gray wrappers under Central Excise Tariff Act.

Analysis:
The case involved a dispute regarding the classification of printed gray wrappers used in packaging cigarette packs under the Central Excise Tariff Act. The Revenue alleged that the appellants, engaged in cigarette manufacturing, were also manufacturing these wrappers, classifying them under heading 4823.90. The appellants contended that they were not the actual manufacturers of the wrappers, and even if they were, the wrappers should be classified under heading 4901.90 with a NIL rate of duty. The original adjudicating authority rejected the appellant's plea, confirming the demand under heading 4823.90.

The Tribunal referred to similar disputes in other cases, notably the case of Sri Kumar Agencies, where the product was classified under heading 4901.90 with NIL duty. Another case, Web Impressions (India) Pvt. Ltd. Vs. CCE, Calcutta, was also challenged before the Supreme Court, leading to a remand order. The Tribunal, in the case of VST Industries Ltd., following previous decisions, held in favor of the assessee, classifying the wrappers under heading 4901.90 with NIL duty, setting aside the demands against the appellant.

The Revenue appealed the Tribunal's decision before the Supreme Court, which observed that since the earlier decision in the case of Web Impressions (India) Pvt. Ltd. was set aside and remanded, the present appeals were also allowed by remand. The advocate for the appellants argued that the remand order left all issues open for fresh decision, emphasizing that the goods were manufactured by job workers, and demands could not be directed towards them. She highlighted the Tribunal's decision in the case of Sri Kumar Agencies, where the goods were classified under heading 4901.90, supporting the appellants' stance.

The Tribunal, without delving into the manufacturing aspect, focused on the issue of classification. Considering the precedents and finality of decisions in similar cases, it held that the goods were properly classified under heading 4901.90, attracting NIL duty. The Tribunal noted that subsequent orders favored the assessee, and penalties could not be imposed. Consequently, the impugned order was set aside, and all appeals were allowed in favor of the appellants, providing consequential relief.

In conclusion, the Tribunal's decision in the case of VST Industries Ltd. highlighted the importance of correct classification under the Central Excise Tariff Act, emphasizing the significance of precedents and final decisions in resolving disputes related to duty rates and penalties.