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TMI Blog1999 (3) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... on 6 of the Central Excise Act, 1944 read with Rules 173B, 173C and 173F, 174G(1) read with Rules 9(1), 173G(2), read with Rule 52A and Rule 173G(4) read with Rules 53 and 226 and Rule 173G(3) read with Rule 54 of the Central Excise Rules in the manufacture of clearance of printed plastic films in roll form ready for use in manufacture of articles for conveyance or packaging without obtaining Central Excise L-4 Licence, without filing classification list and price list and without determining the proper Central Excise Duty. They were also called upon to show cause why action should not be taken for not accounting production, clearance and stock in the prescribed statutory records, such as RG-1 Register, Monthly Returns under RT-12 Returns, etc. Ms. Usha N. Mehta, Manager of Fitrite and Shri Sunil N. Dalal, Partner of M/s. Fitrite were also called upon to show cause why penalty should not be imposed on them under Rule 209A for deliberate suppression of the fact of manufacturing activity and thereby causing evasion of Central Excise duty. 3. On behalf of the appellants it was contended that what was printed were the designs, logos, etc. and the said designs, printed motifs, colour, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, there cannot be a further levy of excise, placing reliance on the Tribunal judgment of Parle Products Ltd. v. Union of India, [1991 (56) E.L.T. 52 (Bom.), since the impugned goods were correctly classifiable under sub-heading 4901.90 and, therefore, chargeable to nil rate of duty. Section Note 2 to Section VII was also relied upon. 5. Ld. Counsel for the appellants Shri D.B. Shroff contended that the impugned order had not correctly appreciated the various judgments brought to the notice of the Collector during the adjudication proceedings. The activity carried on by the appellants was not a manufacturing activity and it had been brought to the notice of the ld. Collector that neither printing nor cutting amount to manufacture. Ld. Collector had sought to distinguish the judgments referred to by the appellants by stating that the said judgment pertained to old Central Excise Tariff. This was obviously an incorrect reasoning since the validity of the ratio of the said decisions was not dependent on the fact that they pertain to old Tariff or to the new Tariff. Ld. Counsel explained that the only activity carried on by the appellants was to print/cut the films. If this act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer, etc. By itself such printing had no utility unless it was used along with the particular goods. Such printing has to be treated as merely incidential and, therefore, the product manufactured by the appellants, namely, printed plastic sheets/films in roll form ready to be used in manufacture of articles for conveyance or packaging cannot be classified as products of printing industry. Ld. Jt. CDR explained that in the present case all the items were clearly classifiable under Heading 3920.39 or 3920.32 in the case of BOPP and HMHD films and under Heading 3920.21/22 in the case of plain and lacquered cellophane film which after printing and slitting were converted to plastic films or sheets ready to be used in manufacture of articles for conveyance or packaging. 7. Ld. Jt. CDR referred to the impugned order and stated that three issues were decided by the Collector, namely, (i) whether the products manufactured by the appellants were classifiable under 3920.29 (with effect from 1-3-1986) or 3920.29 with effect from 1-3-1983; (ii) whether the extended period can be invoked for demanding duty; and (iii) penalties are imposable upon the manufacturers and other persons mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... printing of aluminium foil did not amount to manufacture as no new and distinct commercially known product had not come into existence. In the Andhra Pradesh High Court judgment in Badrachalam Paper Boards Ltd. v. C.C.E., [1984 (18) E.L.T. 229 (A.P.)] it was held that cutting of paper into convenient sizes did not amount to manufacture. In Union of India v. J.G. Glass Industries Ltd, [1998 (97) E.L.T. 5 (S.C.)] the Apex Court while considering the question whether printing/decoration of glass bottles would amount to manufacture under the old Tariff held that the test is whether the product would have served any purpose but for the printing. If the product could serve a purpose even without printing, there is no change in the commercial product after the printing is carried out. In such a case the process cannot be said to be one of manufacture for purposes of Section Note 2(f) of the Central Excise Act. In the instant case the admitted factual position is that the appellants are engaged in the activity of printing various designs, logos and details on cellophane/HMHD and BOPP films and sheets and slitting the same. The cellophane/HMHD, BOPP films, sheets etc. are supplied in rolls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the appellants that the decided cases, especially the Bombay High Court judgment in Parle Products Ltd. v. Union of India, supra, supports their contention that the printing and slitting etc. do not amount to manufacture in the facts and circumstances of the case. In the case of Parle Products (supra), it was held that the process of backing of aluminium foil with printed paper used for packing the products to make it more attractive was not manufacture. Hon ble High Court had held that the process of backing aluminium foils cannot be held to be a process amounting to manufacture. In the instant case it is not in dispute that the appellants are only printing the logo, colouring, trade marking, etc., on various reels and slitting and printing them in rolls for use by the manufacturers of other products. 11. Having regard to our analysis above, we are of the view that the three appeals deserve to be allowed and the impugned order set aside. We do so accordingly. 12. [Assent per : S.K. Bhatnagar, Vice President] - I observe that in the case of Union of India v. J.G. Glass Industries while deciding the issue as to whether printing was a process amounting to manufacture. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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