Customs, Excise and Gold Tribunal - Delhi
M. Vadilal And Co. Pvt. Ltd. vs Collector Of Central Excise on 6 August, 1987
Equivalent citations: 1987(12)ECR1054(TRI.-DELHI), 1987(31)ELT773(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. The issue in this appeal is whether the "Printed Sample Folders" of the appellants M/s. M. Vadilal & Co. (P) Ltd. were not liable to pay excise duty by virtue of Notification No. 55/75-C.E., dated 1.3.1975. In the show cause notice dated 31.5.1979 duty had been demanded for the period 1.3.1975 to 31.3.1978 with reference to the said printed sample folders as well as printing blocks. Shri V.G. Shade, Consultant for the appellants confirmed that the issue in the present appeal relates to the printed sample folders only. Under his order dated 30.6.1982 the Additional Collector of Central Excise, Baroda held that the subject goods were not products of printing industry and hence were not entitled to exemption from payment of duty under item 13 of the Schedule to Notification No. 55/75. It is the appeal preferred by the appellants against the said order, to the Central Board of Excise and Customs that, on transfer, is the present deemed appeal.
2. We have heard Shri V.G. Bhade, Consultant for the appellants and Shri K.C. Sachar for the Department.
3. Under his order the Additional Collector held that since the samle printed folders were not used for any purpose of communication of knowledge etc. the same could not be held to be a product of the printing industry. Thus he held that though the product fell under Item 68 CET it was not entitled to benefit under Notification 55/75. Shri Bhade submits that the said conclusion is wrong and relies on various decisions including that in Collector of Central Excise v. RMDC Press (P) Ltd. reported in 1987 (29) ELT 957. All the earlier decisions have been considered by the Tribunal in the above cited decision. While conceding that the decision in the said case on this issue was that of one of the members only constituting that Bench (the other members not deeming it necessary to go into this issue in view of the other conclusion on the basis of which they agreed as to the nature of the disposal of the appeal), Shri Bhade submitted that his arguments were the same as had been accepted in the said order on this issue. He sibmitted that the sample printed folder (which is nrranufactured for the purpose of enabling manufacturers of textile fabrics to keep their sample fabric safe from wear and tear due to handling) would be a product of the printing industry since it is to a printer that the customers would go to have that product manufactured. He pointed out that depending upon the layout or design suggested by the printer and approved by the, customer, the product will be printed on paper board obtained from the market and then be supplied, suitably creased. Shri Bhade submitted that if the cost of the product is broken up the main ingredient would be found accounted for by the cost of printing, the cost of material being a small percentage only. Shri Sachar submitted that the cost element is irrelevant. He contended that the functional purpose of the product was to keep the sample textile fabric free of damage and hence the product would be more in the nature of a product of the packaging industry than the printing industry. He relied on the decision of the Supreme Court in the case of Atul Glass Industry Ltd. and Ors. v. C.C.E and Ors. (1986 Vol. 25 ELT 473) in support of this contention that it is the functional aspect of the product that will be relevant. In that case the Supreme Court took note of the circumstance that the main characteristic of the product (Glass Mirror) arose out of the silver backing and not out of the glass on which the silver backing was done. On that conclusion the Supreme Court held that the product would not be classifiable as glass since the essential characteristic of the product arose not out of the glass but out of the backing. It does not appear to us that the same conclusion would follow with reference to the product in issue where the question is not one of classification of the product but whether it could be held to be a product of the printing Industry or not.
4. As earlier mentioned, it is to a printer that the customer would go if he wants a sample printed folder either for being manufactured to his design or to purchase it as a ready made product since it is only the printer that would be manufacturing the product and not the card board manufacturer. As earlier mentioned it is the cost towards printing that would form the major component of the price of the product.
5. Shri Sachar further relied on the decision of this Tribunal in the case of Muthuvel Industries v. C.C.E., Madras (1985 (22) ELT 875). The product in issue in that case was office files. It does not appear to us that the said product would be similar to the product now in issue, which is a sample printed folder, and would therefore, in the normal circumstance be printed with eye catching designs suitable to the textile products and according to the design suggested or approved by the customer.
6. As earlier mentioned the Additional Collector refused benefit under the notification on the ground that the product was not used for any purpose of communication of knowledge. We are unable to appreciate the said contention that communication of knowledge would be a condition precedent for being called as a product of the printing industry. For instance, the decision in the RMDC case was with reference to printed cartons. In any event, it may with justification be said that the sample printed folder should communicate knowledge, since it would contain information as to the quality of the sample fabric contained therein and the other features thereof that may be of interest to the customer.
7. Thus, on a careful consideration of the submissions of both sides we are of the view that the denial of benefit claimed by the appellants under Notification No. 55/75 is not justified. This appeal is accordingly allowed and the impugned order is set aside with consequential relief, if any.