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TMI Blog2025 (2) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the Finance Act, 2012 by the insertion of note 14 under Chapter 48 and held that the same cannot have retrospective operation. In Sai Security Printers Ltd. Vs. Commissioner of C. Ex., Faridabad [2006 (2) TMI 23 - APPELLATE TRIBUNAL, NEW DELHI] the Tribunal held that the Thermal papers that were imported printed, cut and slit to size were products of the printing industry. In Kayen Print Process (P) Ltd. Vs Commissioner of C. Ex., Bangalore [2006 (7) TMI 87 - CESTAT, BANGALORE], the Tribunal held that printing on paper sheet and paper board would come within the category of the printing industry. In the present case, in addition to the black bar code, details of transactions, the sheet also contains instructions on keeping the ATM premises clean, instructions on use of ATM cards safely etc. This further strengthens the point that the product is not merely of incidental use but it is of primary use. The thermal paper cut rolls, printing of paper with logos / marks of customers are not merely incidental but essential to primary use, i.e. providing information of bank statements and receipts. The pre-printed matter and the matter to be printed by ATM are inter connected and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess under Section11A of Central Excise Act (ACT) along with applicable interest and proposing to impose penalty under Rule 25 of Central Excise Rules,2002(CER). The Ld. Adjudicating Authority have ordered for re-classificaton of "ATM Rolls" under CETH 4811 9099 of CETA, confirmed the demands proposed and imposed penalty on the Appellant, besides appropriating amounts paid by the Appellant towards duty. The appeal wise details of the demands are as tabulated below : - Appeal No. SCN No./Date Period involved Duty &Cess demanded (Rs.) OIO NO./Date Penalty Imposed (Rs.) E/42141/14 12/2010 January 2010- November 2010 4,59,616 04/2011 dt.24.06.2011 1,00,000/- E/42810/14 126/2012 dt.07.12.2012 01.12.2011- 16.03.2012 8,57,271 1&2/2013 dt.31.01.2013 50,000/- E/42811/14 14A/2012 dated 09.03.2012 February 2011- November 2011 20,40,184 1,00,000/- Aggrieved, the Appellant filed above appeals before the lower Appellate authority who had while confirming the demands set aside the penalties imposed. Hence the present appeals filed by the Appellant before this forum. 3.1 The Ld. Counsel Ms. Akshaya Benjamin representing the Appellant reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser is not the concern of the assessee and cannot be the consideration for classifying the goods in question.... 6. The aforesaid description of the work done by the assessee makes it clear that it is the printing which it is undertaking and, therefore, it is rightly classified under the heading 49.01. Merely because the thermal paper rolls are the raw material used which is imported or which is cut to different sizes, would not be the relevant factor in determination of the classification. These aspects are covered by the judgement of this Court in 'Headway Lithographic Company vs. CCE, Kolkata [2015 (321) E.L.T. 394 (S.C.)] and "Holostick India Ltd. Vs CCE, Noida [2015 (318) E.L.T. 529 (S.C)]" 3.4 It was averred that the thermal paper roll pre- printed with logo and other marks of customers were to be classified under Chapter 49 only, because printing in this case was not merely incidental but very much related to the primary use i.e. further printing by the machine. It was submitted that the pre-printed matter and the matter to be printed by ATM were interconnected and constituted a single matter. Further, it was pointed out that the existence of blank portions in printe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y whereas the impugned orders while confirming demands set aside the penalties imposed. 8. We find that the issue which arise for consideration is whether a printed thermal paper would merit classification under heading 48119099 or 49019900. During the relevant period Tariff Item 48119099 read as follows: - "Paper, paperboard, cellulose wadding and webs of Cellulose fibres, coated, impregnated, covered, surface- coloured, surface decorated or printed, in rolls or rectangular (including square) sheets, of any size, other than goods of the kind described in Heading 4803, 4809 or 4810" Tariff Item 4901 reads as follows : "Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets." 9. The Ld. Counsel for the Appellant has vehemently contended that the subject product is not classifiable under Chapter 48 in view of the amendments brought in Budget 2012. In this context it is relevant to look at Chapter Note 12 to Chapter 48 to appreciate the position of law before 17.03.2012. The Chapter Note is reproduced herein below for ready reference: - "Except for the goods of heading No. 48.14 or 48.21, paper, paperboard, cellulose wadding and article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r board. The Hon'ble Supreme Court in Moorco (India) Ltd. vs. CCE, Madras [1994 (74) ELT 5 (S.C.)] has specifically held that specific entry in tariff excludes residuary entry. Therefore, as per Note 12, except for heading 48.14 or 48.21, paper, paperboard and articles thereof, printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the goods fall in Chapter 49. 11. We find that the Ld. Counsel has placed reliance on various judgements, and we find it expedient to examine the relevant cases as follows: - 11.1 In Metagraphs Pvt. Ltd vs. Collector of Central Excise, Bombay supra, the Hon'ble Apex Court had the occasion to examine on the question of whether a process is incidental or primary and it was held as follows: - "12. The label announces to the customer that the product is or not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The printing of the label is not incidental to its primary use but primary in the sense that it communicates to the customer about the product and this serves a definite purpose. This Court in Rollatainers held that "what is exempt under n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t printed rolls and bus ticket printed rolls would merit classification under Chapter 49 as "products of the printing industry". The decision of this Tribunal in the case of Gopsons Papers Ltd. and Sai Security Printers Ltd. (cited supra) also clearly held that lottery tickets, bus tickets, cheque books, etc. printed on thermal paper rolls and cut to size are classifiable under heading 4901.90 as products of the printing industry. In the case of Metagraphs Pvt. Ltd. the Hon'ble Apex Court held that if printing brings into existence a product, the resultant product would be a "product of printing industry". In the case before us, it is not in dispute that the printing on the thermal sheets/rolls of paper brought into existence, receipts for the ATM, lottery tickets and rolls for bus tickets. Therefore, printing is not merely incidental to the use of the product as such printing imparts a substantial character and quality to the product. It is true that while actually using, certain particulars are required to be entered in these rolls by the ATM or the lottery machine or in the bus ticket vending machine. Nevertheless the product is specifically meant to be used as ATM receipts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and cannot be the consideration for classifying the goods in question.... 6. The aforesaid description of the work done by the assessee makes it clear that it is the printing which it is undertaking and, therefore, it is rightly classified under the heading 49.01. Merely because the thermal paper rolls are the raw material used which is imported or which is cut to different sizes, would not be the relevant factor in determination of the classification. These aspects are covered by the judgement of this Court in 'Headway Lithographic Company vs. CCE, Kolkata [2015 (321) E.L.T. 394 (S.C.)] and "Holostick India Ltd. Vs CCE, Noida [2015 (318) E.L.T. 529 (S.C)]" 11.5 Further, in Mehra Computer System Vs. Commissioner C. Ex., [2017 SCC Online CESTAT 12781], the Tribunal affirmed that, "if the printing is carried out on the product, itself conveys a message e.g. details of the contractual terms, information of messages, received or sent, details of the supplier/manufacturer, advertisement of his products, then in all such cases, the printing cannot be merely incidental to the primary use." 12. The ATM rolls which are manufactured and cleared by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case not merely incidental but very much related to the primary use i.e. further printing by the machine. It is pertinent to note in this case that the process of cutting/slitting does not convert the product to the primary use but it is the process of printing that converts the product to the primary use. When the printed matter has given essential character they cannot be anything other than the product of the "Printing Industry". 14. The Ld. Authorized Representative Ms. Anandalakshmi Ganeshram has referred to the decision of the Tribunal Chennai in respect of the very same Appellant for prior periods vide Final Orders Nos. 40423 - 40424 of 2019 dated 07.03.2019, have set aside the order of the Commissioner (Appeals) on the same issue and confirmed the duty demands with interest and Penalty. The relevant part of the Tribunal Order is extracted below for ease of reference: - " 6. After going through the facts on record, we find merit in the assertions of the Ld. AR for the Department. CETA 4901 inter alia covers "printed books, brochures, leaflets and other similar matter ...". CETA 4811 inter alia covers "paper, paperboard ... ... or printed, in rolls or rectangular (incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification of the disputed articles under Chapter 48 of the Customs Tariff Act, 1985 would be ruled out in terms of Note 8 to Chapter 48 on account of printing on the said items being not merely incidental to their primary use. We hold that on account of the primary use of the articles in question being in connection with the packaging of cigarettes and the printing there being merely incidental to their primary use that would be correctly classifiable under Chapter 48 of the Customs Tariff Act, 1985 and their classification under sub-heading 4901.90 as claimed by the applicants would be ruled out." 9. In view of our discussions hereinabove, we find the case in favour of the Revenue. The impugned order of the Commissioner (Appeals) cannot then be sustained and requires to be set aside and therefore, the duty demands with interest and penalty confirmed by the Original Authorities will require to be sustained, which we hereby do. This will have the effect of restoring the adjudication Order No. 98/2010, dated 3-5-2010 and adjudication Order No. 132/2010, dated 23-12-2010 passed by the Original Authorities. The Cross-Objection Nos. E/CO/2/2012 and E/CO/3/2012, being in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied to the facts of the present case. Similarly, in the present cases, the printed Thermal paper requires to be considered for classification either under Chapter 48 or under 49 depending upon the nature and scope of printing. Therefore, the decision of the Hon'ble Supreme Court in ITC Ltd. case cannot be applied to the facts of the present case. Further, we note that the Ld. Counsel for the Appellant has vehemently put forth that the Chennai Tribunal's order vide Final Orders Nos. 40423 - 40424 of 2019 dated 07.03.2019 is per in curium as the same was issued without considering the binding precedent of the order of the Hon'ble Supreme Court in Commissioner of Central Excise Vs. Gopsons Papers Ltd. [2015 (324) E.L.T. 5 (S.C.)] cited supra in para 3.3. The ratio of the Hon'ble Apex Court judgment in the case of Gopsons Papers Ltd. supra is applicable to the facts obtained in this appeal. The Hon'ble Supreme Court decision is binding on all subordinate Courts and Tribunals being the law of the land. Printed Thermal Papers cannot be put to any other use as the printing carried out indicates its primary use and so is rightly classifiable under Chapter Heading 4901 of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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