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TMI Blog2011 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the intermediary products are marketable or not - there is enough evidence available on record to show that not only the intermediary products in the present case are capable of being bought and sold in the market but they are in fact sold and purchased in the open market - Appeal is allowed - 4077 of 2003 - - - Dated:- 30-8-2011 - Mukundakam Sharma and Anil R. Dave, JJ JUDGEMENT Mukundakam Sharma, J:- 1. The present appeal arises out of the judgment and order dated 14.5.2002 of Customs, Excise and Gold [Control] Appellate Tribunal, New Delhi [for short "the Tribunal"] allowing the appeal filed by the Respondent-assessee and setting aside the order dated 28.12.2000 of the Commissioner, Central Excise, Meerut-II, U.P. 2. In order to decide the issues arising in the present case in proper perspective, basic facts leading to filing of the present appeal are being recapitulated hereunder. 3. Respondent is a firm engaged in the manufacture of computer stationery, business forms, etc., [carbonless or with carbon]. The respondent claims that the goods produced by them, namely, computer stationery, business forms and other allied products fall under sub-Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly printing and perforation, etc., for the manufacture of the stationery. 8. The Commissioner, Central Excise, Meerut-II issued a show cause notice dated 30.04.1998 wherein it was alleged that the respondents were engaged in evasion of duty on carbonless paper which emerged at the intermediate stage during the course of manufacture of carbonless stationery from the plain paper. Therefore, they were asked to show cause as to why duty amounting to Rs. 49,05,335.00 which was allegedly not paid on the carbonless paper manufactured and removed from their factory during the period from 1993-94 to 1997-98 [upto 12/97] should not be recovered from them under Rule 9(2) of the Central Excise Rules, 1944 read with provisions of Section 11A(1) of the Central Excise Act, 1944 invoking extended period of 5 years and also to show cause as to why penalty and interest on the evaded duty should not be imposed upon it. The said notice proposed to charge duty on the said carbonless paper emerging at the intermediate stage under sub-heading No. 4816.00 to the Schedule to the Central Excise Tariff Act, 1985. 9. Simultaneously, proceedings were initiated against MD and Deputy MD of the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter, the Commissioner in its Order-In-Original dated 28.12.2000 confirmed the demand of the department and imposed penalty of Rs. 50 lakhs on the respondent-assessee. 13. Aggrieved by the same the respondent-assessee filed an appeal before the Customs, Excise and Gold [Control] Appellate Tribunal, New Delhi which vide its order dated 14.05.2002 held that the impugned product is not classifiable under heading 48.16 as carbonless paper and allowed the appeal of the respondent. 14. Being aggrieved by the said order of the Tribunal, the Department has filed the present appeal, on which we heard learned counsel appearing for the parties, who have taken us through all the materials available in the record. 15. There are two specific issues which arise for our consideration in the present appeal and the same were also argued extensively by the counsel appearing for the parties. The first issue, relates to under which particular heading the intermediary product would fall or is it to be treated as a final or end product, under heading 4820.00 of the Schedule to the Central Excise Tariff Act. The second issue arising for our consideration is as to whether or not the interm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows:- Rate of Duty "48.16 4816.00 Carbon paper, self-copy paper and other copying or transfer papers (other than those of heading No. 48.09), duplicator stencils and offset plates, of paper, whether or not put in boxes. 20%" 20. The respondent, however, submitted that they manufacture Registers, account books, note books and other allied products for which Nil duty is prescribed under Heading 49.01 of the Schedule, where the description of goods is printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans. According to the counsel appearing for the respondent the products manufactured by them should be treated falling under Heading No. 49.01. Reference was also drawn to the opinion of the Institute of Paper Technology, Saharanpur, U.P. 21. The said opinion clearly indicates that computer stationery is different from carbonless paper and self copying paper. It was also indicated therein that carbonless papers or self copying papers are fully coated throughout and are available in reel/sheet form. 22. There is a set of Interpretative Rules f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs, who has passed the Order-In-Original was conscious of the aforesaid fact. According to him, the carbonless paper/self copying paper, which is an intermediary product is classifiable under Headings 48.09 and 48.16 depending upon the size of the papers manufactured by the respondent company whereas the end product i.e. the computer stationery is classifiable under Heading 48.20, which attracts NIL rate of duty. According to him although the final product is not dutiable, as the same is classifiable under Heading 48.20, where NIL rate of duty is prescribed, but so far as intermediary product is concerned it is to be classifiable under Heading 48.16 and the duty payable for such intermediary goods is prescribed as 20%. 26. The Commissioner has given cogent reasons as to why the carbonless paper emerging at intermediate stage would be classifiable under heading 48.16. According to him goods covered under Headings 48.09 and 48.16 are of same kind except that in latter heading the goods, other than in roll form or in rectangular sheet with at least one side exceeding 36 cm fall and that applying the principle of ejusdem generis, the carbonless paper whether printed or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on noticing rules of interpretation of the Schedule to the Central Excise Tariff Act, we are of the considered opinion that although the respondent company may be registered for newspapers, etc., but it cannot be said that either the end product or the intermediary product would fall under Chapter 49, heading 49.01. End product here is admittedly computer stationery which would specifically fall under Chapter 48, heading 48.20, sub heading 4820.00. 32. When we read heading 48.16 with sub heading 4816.00, we find that it includes within its extent carbon paper, self-copy paper and other copying or transfer papers but other than those articles included in heading 48.09 which is specifically relatable to a particular size of paper and therefore we are in agreement with the findings recorded by the Commissioner that the intermediary products in the present case would fall and are classifiable under heading 48.16. 33. The next issue that is required to be decided is as to whether the intermediary products are marketable or not. 34. Evidence in the nature of documents and statements recorded in that regard indicates that such intermediary products are available in the market ..... X X X X Extracts X X X X X X X X Extracts X X X X
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