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TMI Blog1988 (4) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Item 68 of the Central Excise Tariff instead of Item 17(2) ibid. The value of clearances of Cinema Wall Posters should, therefore, be included in the aggregate value of clearances of excisable goods for the purpose of exemption under Notifications No. 71/78-C.E., dated 1-3-1978 and No. 80/80-C.E., dated 19.6.1980. As a result, the aggregate value of clearances of all excisable goods exceeded Rs. 20 lakhs during the preceding financial year. He, therefore, denied the benefit of exemption under Notifications No. 71/78-C.E. and No. 80/80-C.E. in respect of clearances of playing cards. The Collector of Central Excise (Appeals) has set aside the orders of the Assistant Collector and has held that the Cinema Wall Posters are assessable under Item 17(2) of Central Excise Tariff and not under Item 68 ibid as the production of the same does not involve manufacture and consequently, the value of clearances of cinema wall posters should not be included in the value of clearances for the-benefit of exemption Notifications No. 71/78-C.E., dated 1.3.1978 and No. 80/80-C.E., dated 19-6-1980 in respect of clearances of playing cards falling under Item 56. 3. Arguing for the appellant Shri Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oards which have been subjected to various treatment such as coating, impregnating, corrugating, creping and design printing) not elsewhere specified. Cinema wall poster is a design printed paper falling under Item 17(2) of the Tariff. It is printed out of duty paid paper falling under Item 17(2). Hence, printing of the cinema wall posters will not attract fresh duty under Item 17(2). There was no physical, mechanical or chemical change in cinema wall posters. There was only design printing, but no other activity or process like cutting, binding or stitching etc. was involved. It was colour printing and not ink printing. Products of printing industry are those which are not covered by Tariff Item 17(2). Cinema wall posters will not fall under Tariff Item 68. Converted paper was exempted from the whole of central excise duty under Notifications No. 68/76-C.E., dated 16-3-1976 and No. 63/82-C.E., dated 28-2-1982. As the paper falling under Tariff Item 17 was a "specified goods" in the Notifications No. 71/78-C.E., dated 1-3-1978 and 80/80-C.E., dated 19-6-1980 and the converted paper falling under Tariff Item 17(2) is fully exempted from duty by Notification issued under Rule 8(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Collector of Central Excise, Bombay - II. (vi) 1986 (25) E.L.T. 94 (Tribunal), Collector of Central Excise, Chandigarh v. Gurmukh Singh & Sons, Ludhiana (vii) 1981 E.L.T. 328 (Del.), J.K. Synthetics Ltd. and Another v. Union of India and Others. (viii) 1987 (10) E.T.R. 854 (Tribunal), AtuI Products Ltd., P.O. Atul v. Collector of Central Excise, Baroda. (ix) 1984 ECR 658 (CEGAT), M/s. Nuchem Plastics Ltd., Faridabad v. Collector of Central Excise, Delhi. 6. The learned advocate has stated that the demand for duty in one case was time-barred. The Collector (Appeals) has not dealt with the question of time-bar which was raised by the respondents before him and also before the Assistant Collector. 7. In paragraph 30 of the judgment of the Hon'ble Supreme Court in the case of Empire Industries Ltd., reported in 1985 (20) E.L.T.179 (S.C.), it was held that"the taxable event under Excise Law is "manufacture". The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes, "manufacture" takes place and liability to duty attracted." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact whether or not such paper is subsequently varnished or glazed by chemicals or embossed, and falling under sub-item (2)of the aforesaid item No. 17." Cinema wall paper is not converted paper firstly because we have already held above that it ceases to be paper falling under Item 17 of the Central Excise Tariff and secondly because it does not fall within the description given in the aforesaid notification. Consequently, cinema wall poster is not eligible for the exemption under the said notification. The learned consultant for the respondents has argued before us that after amendment of Item 17 of the Central Excise Tariff w.e.f. 1-3-1982 paper subjected to "design printing" fell under sub-item (2) of that Tariff Item. According to him, cinema wall poster is design printed and hence covered by this sub-item of the Tariff Item. We have already held that cinema wall poster is not "paper", but it is a product of printing industry. Unless the product remains "paper" it cannot fall under sub-item (2) of Tariff Item 17. The argument of the learned consultant is, therefore, not acceptable. Shri Dev has argued that printing does not amount to manufacture and he has relied upon a nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification shall not be applicable to a manufacturer :- (i) during the financial year 1978-79, if the aggregate value of the specified goods cleared if any, by him or on his behalf for home consumption, from one or more factories, during the period commencing on the 1st day of April, 1977 and ending on the 28th day of February, 1978, had exceeded Rs. 13.75 lakhs; (ii) during financial years subsequent to the financial year 1978-79, if such clearances, if any, of the specified goods, during the preceding financial year, had exceeded rupees fifteen lakhs; and (iii) who manufactures excisable goods falling under more than one Item Number of the said First Schedule and the aggregate value of all excisable goods cleared by him or on his behalf for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees twenty lakhs; * * * * Explanation I - For the purposes of this notification, the expression "value means the value as determined in accordance with the provisions of Section 4 of the Central Excises and Salt Act, 1944 (1 of 1944) * * * * Explanation IV - For the purpose of computing the aggregate value of clearances under the Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... five per cent of such duty : * * * * * 2. Nothing contained in this notification shall apply to a manufacturer - (i) If the aggregate value of clearances of the specified goods, if any, by him or on his behalf, for home consumption, from one more factories, during the proceeding financial , had exceeded rupees fifteen lakhs; (ii) who manufactures excisable goods falling under more than one Item Number of the said First Schedule and the aggregate value of clearances of all excisable goods by him or on his behalf, for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees twenty-lakhs. * * * . * .* Explanation II. - For the purposes of calculating the aggregate value of clearances under clause (a) of paragraph 1 of this notification, during the financial year l980-81 the value of clearances in respect of which a manufacturer has availed of the exemption under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 71/78-Central Excises, dated the 1st March, 1978 shall be taken into account. Explanation III - For the purposes of this notification the expression "value" means either the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of playing cards falling under Tariff Item 56. We, therefore, hold that the decision of the Assistant Collector of Central Excise classifying cinema wall posters under Tariff Item 68 and denying the benefit of the above exemption notifications in respect of clearances of playing cards was in order, but the decision of the Collector (Appeals) was not correct. 10. Shri Dev for the respondents has argued that the Assistant Collector could not reopen the approved classification and has cited a number of decisions including the judgments of Delhi High Court reported in 1986 (23) E.L.T. 318 (Del.) and 1981 ELT. 328 (Delhi). Shri Sunder Rajan has argued that the classification list was approved provisionally, so far as the exemption under Notification No. 80/80-C.E., was concerned, subject to further investigation to classification of cinema wall poster. From the photo copies of the classification lists No. 1/79-80 dated 11-4-19797, No. 43/79-80, dated 15-3-1979, No. 1/79-80, dated 26-7-1979, No. 22/79-80, dated 14-12-1979, No. 49/79-80, dated 29-4-1980, No. 32/79-80, dated 29-4-1980, No. 32/79-80, dated 9-1-1980, No. 6/80-81, dated 10-7-1980, No. 49/80-81, dated 18-9-1980, No. 54/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 893/83-C, was accorded by the Assistant Collector of Central Excise, Vijayawada, after modification, in the speaking Order-in-original No. 2/83, dated 27-1 -1983. The question whether the classification approved by the Assistant Collector could be reopened by him, was considered by Karnataka High Court in the case of Shyam Sunder U. Nichani v. Assistant Collector of Central Excise, Bangalore and Another, decided on 20-9-1985 and reported in 1985 (22) E.L.T. 751 (Kar.). It was held by the Hon'ble High Court that withdrawal of approval of the classification list was not a review by the same officer and, therefore, a classification list approved by the Assistant Collector could be reopened and re-assessed under Section 11 A of the Central Excises and Salt Act, 1944. Section 11 A of the Central Excises and Salt Act is not only a recovery provision, but it enables the original authority to reopen the classification and reassess the goods. The Hon'ble High Court considered the judgment of Supreme Court reported in 1985 (20) E.L.T. 212 (S.C.) in the case of D.R. Kohli and Others v. Atul Products Ltd. (decided on 12-2-1985) and in paragraph 24 of the judgment observed that "In D.R. Kohli's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94732 dated 23-12-1981 was issued on 1-6-1982, i.e., within the time-limit of 6 months. In Appeal No. ED/SB/1893/83-CA show cause notice dated 1-10-1982 was issued proposing re-classification of cinema wall posters under Tariff Item 68 instead of Item 17(2) and consequential recovery of duty of Rs. 6,462.64 on playing cards cleared in March, 1982. On adjudication of the case, the Assistant Collector confirmed the demand and directed the respondents to pay the amount. In this case, the classification List No. 31/81-82, dated 5-3-1982 was approved provisionally on 19-3-1982. Final order on the classification list was passed on 27-1-1983. Hence, the demand for duty was not barred by limitation of time. Appeals No. ED/SB/16/84-C and ED/SB/17/84-C relate to dispute in classification of cinema wall posters and no demand for duty is involved. In the case covered by Appeal No. EP/SB/18/84-C demand for duty of Rs. 1,51,451.12 relating to the period from 1-8-1981 to 28-2-1982 was issued on 1-6-1982. As there was no allegation of suppression of facts etc.,warranting application of longer time-limit of 5 year for demanding duty, the demand for duty should be limited to 6 months only prior to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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