2016 (8) TMI 39 - AT - Central Excise

Classification of pictures, graphics and images printed on selected material like vinyl coated fabric and films which are non-adhesive and which are used on bill boards and hoardings in outdoor advertisements - classifiable under Chapter 4901.90 or 9405 of CETA - Held that - In the case of Tanzi Screen Arts Vs. CCE, Mumbai reported in 2001 (3) TMI 149 - CEGAT, MUMBAI , it was observed that, texts, graphics, etc printed on the translucent plastic sheets by means of screen printing to advertise goods and services are classifiable under 49.01 as product of printing industry and not under heading 94.05 as part of illuminated signs not elsewhere specified. - The product in question are to be classified under 49.01 - Decided against the revenue.

Issues: Classification of goods under Central Excise Tariff Act 1985

Analysis:
1. The appeal was filed by the Revenue against the Commissioner (Appeals) order, which classified the product manufactured by the respondent under Chapter 4901.90 instead of Chapter sub-heading 9405.90 of the Central Excise Tariff Act 1985. The appellant, engaged in manufacturing products like pictures and graphics printed on selected materials, classified their product under Chapter 4901 as goods of the printing industry. However, the department classified it under Chapter 9405 and imposed duty at the rate of 16%. The dispute arose regarding the correct classification of the product.

2. The Revenue argued that the product should be classified under Chapter 9405.90 as parts of illuminated sign boards, emphasizing that the goods were glossy and had a photographic effect, serving as an essential part of illuminated signage in outdoor advertising. They contended that the specific nature of the printed text, images, and pictures conveyed a particular message, distinguishing them from general printing industry products. The Revenue also challenged the reliance on Note 2 of Chapter 49 for classification and emphasized that the end result of the manufacturing process should determine the classification.

3. Upon analyzing the material, the Tribunal found that the appellant classified the product under Chapter sub-heading 4901.90, while the department proposed classification under Chapter sub-heading 9405.90. To classify the product under Tariff Entry 9405, it was essential for the goods to be illuminated with a permanent light source and not specified elsewhere in the Excise Tariff. The Tribunal compared the Tariff Entries for 4901.90 and 9405.90 to determine the correct classification.

4. The Commissioner (Appeals) considered the manufacturing process, where the appellant received art works from clients, adjusted them as per specifications, and produced full-size images on selected material using state-of-the-art printing techniques. The final product was a printed product cleared to customers. The Commissioner also relied on a precedent where it was held that printed graphics on plastic sheets for advertising were classified under Chapter 49 as a product of the printing industry, not under Chapter 94 as illuminated signs.

5. The Tribunal referred to a Supreme Court decision where a similar case was remanded, and subsequently, the Tribunal allowed the appeal of the assessee. The Revenue did not challenge this decision. Based on the precedents and considering the facts and circumstances, the Tribunal found no irregularity in the impugned order and dismissed the appeal of the Revenue.

This detailed analysis highlights the classification dispute, arguments presented by the parties, examination of relevant tariff entries, consideration of manufacturing process, reliance on precedents, and the final decision of the Tribunal based on legal principles and previous judgments.

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