Eligibility of High lighter Pens, Felt tipped pens, Porous tipped pens, marker pens falling under Chapter Heading 96.08 for exemption benefit under Notification No. 74/86 as amended - Central Excise - 30/88-CX.1

Eligibility of High lighter Pens, Felt tipped pens, Porous tipped pens, marker pens falling under Chapter Heading 96.08 for exemption benefit under Notification No. 74/86 as amended Circular No. 30/88-CX.1 Dated 18-11-1988 [From F. No. 13/9/88-CX.1 ] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Eligibility of High lighter Pens, Felt tipped pens, Porous tipped pens, marker pens falling under Chapter Heading 96.08 for exemption benefit under Notification No. 74/86 as amended. A doubt has been raised whether the products such as Permanent Ink Marker, Colour marker, Water Based Markers, Dual Marker, Hi-lighter/Up-liner and Magic Tric Colour Pens are covered under the exemption Notification No. 74/86-C.E., dated 10-2-1986 as amended. In some Collectorates, it was felt that in the Central Excise Tariff, the Heading 9608.00 indicates pens and markers as different items and whereas the pens have been exempted from payment of Central Excise duty under Notification No. 74/86 as amended. The legislature by not including marker pens within the ambit of the said notification intended to levy Central Excise duty on the marker pens. 2. Representations were received from the trade manufacturing the said products pointing out that they are manufacturing various types of pens as per details below :- (i) Water Colour Sketch Pens (ii) Fluorescent Hi-lighter Pens (iii) Ball Point Pens (iv) Fine Liner Pens (v) Porous tip Pens (vi) Marker Pens and that by virtue of Notification No. 74/86 further amended by Notification Nos. 163/86 and by 21/88, all these pens are exempted from levy of excise duty. 3. They have further pointed out that all these pens are of different designs and are used for different purposes like drawing, sketching, hi-lightering, marking etc. They are therefore, used only as pens, the description and uses of these products are given in more details in the printed price lists. This printed price list is supplied with these items to the dealers for their information. Also printed materials for the information of the consumer are submitted with this, according to which it is claimed that these are known amongst those who deal with these and use these as "PENS" only. 4. On the above grounds it is pointed out that the said products are only felt tipped or porous tipped pens and are exempted from excise duty under Notification No. 74/86 as amended. 5. Hi-lighter pens are used to help emphasise a single word or lines of text in vivid, read through colours. These Hi-liter pens and Marker pens are known as special purpose pens in the International market. In support of this they have enclosed catalogues of similar products available in the International market describing various types of high-liter pens, marking pens with round tip or chisel tip etc. as special purpose pens. Marker pens are also described as felt pens. 6. This matter was further examined in the Board. Chapter sub-heading 96.08 of Central Excise Tariff reads as Ball Point Pens, Felt tipped and other porous tipped pens and markers; fountain pens, stylograph pens and other pens. Similarly, in the HSN, 9608.20 read as - Felt tipped and other porous tipped pens and markers. Fountain pens, stylograph pens and other pens. 7. As can be seen from Central Excise Tariff heading and also in HSN felt tipped and other porous tipped pens and markers are of a particular category of pens. It was also noticed from the samples provided by the party that materially and constitutionally there is basically no difference among fibre tipped, felt tipped or other porous tipped pens and markers. In fibre tipped pens the tips are from acrylic fibre or polyester fibre or nylon fibre. Felt tipped pens will have tips from acrylic fibre, polyester fibre, nylon fibre and wool Porous tipped pens will have acrylic fibre, polyester or nylon fibre or hydro carbons. Similarly, the markers will also have either acrylic fibre, polyester fibre, nylon fibre etc. The size of the tip for all different types of pens will very depending upon the requirements whether it is for drawings or markings purpose etc. In all these different varieties of pens i.e. fibre tipped or felt tipped porous tipped, marker, it will have an inside filter for holding the ink. These filters can be of polyester fibre, or acrylic fibre or acetate fibre or poly-propylene fibre. All these pens depend upon ink. It may be water based ink or permanent ink with glycol base or water based fluorescent colour-ink. The use of ink will vary as per the purpose to which these pens are put. In case the pens are used for drawing, sketching etc. water based ink can be used. In case of marker pens as the markings have to be visible for a longer period, permanent ink with glycol base are used and in these cases the pens are known as markers. Hi-lighter/upliner/markers belong to the same class of pens as fibre tipped pen or felt tipped pen or porous tipped pens. Only the difference will arise from the size of the tip and ink used. In some cases tip may be narrow and pointed when it is required for drawing and sketching. In other cases tip may be broader whenever it is used for putting some marks like the markers. In case of drawing pens or hi-lighter etc. the ink used in water based but in case of markers permanent ink with glycol base is used. So from all these, it can be inferred that all these felt tipped and porous tipped pens and marker pens belong to the category of pens. The only difference being the ink used and the size of the tip. It is also seen from the literature that similar kind of hi-liters, upliners, markers are manufactured by Scripto Company, U.S.A. by Tombow Co. Ltd., Japan, Nikko Pen Company, Japan, by Pental Pen Company, Tokyo and from their catalogues it is seen that all these varieties of hi-liters/markers are known as pens or special purpose pens. So in the international market and in the trade parlance the said products are known as Hi-liter pens/marker pens etc. From the literature supplied by the trade, it is observed that markers are referred to as marker pens. These markers serve the same purpose as pens namely writing on certain surfaces. 8. So on the basis of grounds discussed above, the Board is of the view that markers/hi-liters/upliners are all a category of pens and hence are eligible for exemption as pens under Notification No. 74/86.